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AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICA IN THE CONTEXT OF GLOBAL CRISES

AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICA IN THE CONTEXT OF GLOBAL CRISES. OUSMANE BADIANE Director for Africa International Food Policy Research Institute. OVERVIEW OF RECENT GROWTH TRENDS IN AFRICA. THE IMPLICATIONS OF CHANGING GLOBAL FOOD MARKETS. 1. 2.

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AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICA IN THE CONTEXT OF GLOBAL CRISES

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  1. AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES OUSMANE BADIANE Director for Africa International Food Policy Research Institute

  2. OVERVIEW OF RECENT GROWTH TRENDS IN AFRICA THE IMPLICATIONS OF CHANGING GLOBAL FOOD MARKETS 1 2 THE IMPACT OF CHANGING GLOBAL FINANCIAL MARKETS EMERGING AGRICULTURAL POLICY DEVELOPMENTS SUSTAINING AND ACCELERATING THE RECOVERY PROCESS 3 4 5 AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES

  3. OVERVIEW OF RECENT GROWTH TRENDS IN AFRICA THE IMPLICATIONS OF CHANGING GLOBAL FOOD MARKETS 1 2 THE IMPACT OF CHANGING GLOBAL FINANCIAL MARKETS EMERGING AGRICULTURAL POLICY DEVELOPMENTS SUSTAINING AND ACCELERATING THE RECOVERY PROCESS 3 4 5 AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES

  4. PRE-CRISIS ERA COINCIDED WITHLONGEST PERIOD OF SUSTAINED GROWTH SINCE 60S SOURCE: Badiane 2008: IFPRI Policy Brief No. 9

  5. THE GROWTH IS ACCELERATINGAS WELL AS SPREADING GEOGRAPHICALLY SOURCE: IFPRI / Badiane and Ulimwengu Data from national account s / UN database: http://data.un.org/Explorer.aspx?d=SNAAMA

  6. THIS IS REFLECTED IN BETTER PRODUCTIVITY AND TRADE PERFORMANCE AFRICAN VS WORLD EXPORTS (VOLUME) AGRICULTURAL PRODUCTIVITY AFRICA AGRICULTURAL PRODUCTIVITY WORLD AFRICAN VS WORLD EXPORTS (VALUE)

  7. POVERTY LEVELS HAVE STARTED TO DECLINE BUT NOT FAST ENOUGH TO MEET MDG1 POVERTY HEAD COUNT; $1/DAY SOURCE: IFPRI/Fan. 2007H

  8. OVERVIEW OF RECENT GROWTH TRENDS IN AFRICA THE IMPLICATIONS OF CHANGING GLOBAL FOOD MARKETS 1 2 THE IMPACT OF CHANGING GLOBAL FINANCIAL MARKETS EMERGING AGRICULTURAL POLICY DEVELOPMENTS SUSTAINING AND ACCELERATING THE RECOVERY PROCESS 3 4 5 AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES

  9. THE GLOBAL FOOD PRICE CRISIS OF 2007-08 Source: J. von Braun; Data from FAO 2009 and IMF 2009.

  10. WAS THERE A FOOD PRICE CRISIS IN AFRICA?ECOWAS Countries Source: ReSAKSS West Africa Node

  11. WAS THERE A FOOD PRICE CRISIS IN AFRICA?COMESA Countries Source: ReSAKSS East Africa Node

  12. LONG TERM WORLD FOOD PRICE TRENDS AND GROWTH RECOVERY IN AFRICA US$/ton Source: IFPRI / M. Rosegrant (prelim. results with IMPACT-WATER).

  13. FACTORS BEHIND FOOD PRICE TRENDS INCOME & POPULATION GROWTH, MEAT AND DAIRY CONSUMPTION 2005/1990 ratios of per capita consumption Source: IFPRI/ v. Braun - Data from FAO 2007.

  14. FACTORS BEHIND FOOD PRICE TRENDS VERY SLOW GROWTH IN FOOD PRODUCTION OVER THE LAST DECADE Million tons Total Million tons Source: IFPRI / v. Braun - Data from FAO 2003, 2005-08. * Forecast.

  15. VULNERABILITY OF AGRICULTURE TO GLOBAL MARKET CHANGES RATIO VALUE AGRIC TRADE TO AGRIC GDP 2000 - 2006 DRC AFRICA CAR Individual Countries NOTES: Agricultural trade is the value of agricultural exports plus value of agricultural imports SOURCES: Agricultural trade: Food and Agriculture Organization, FOASTAT 2008 Agricultural value added: World Development Indicators, 2008

  16. OVERVIEW OF RECENT GROWTH TRENDS IN AFRICA THE IMPLICATIONS OF CHANGING GLOBAL FOOD MARKETS 1 2 THE IMPACT OF CHANGING GLOBAL FINANCIAL MARKETS EMERGING AGRICULTURAL POLICY DEVELOPMENTS SUSTAINING AND ACCELERATING THE RECOVERY PROCESS 3 4 5 AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES

  17. RECESSION – EXPORT DEMAND - TERMS OF TRADE AG. REVENUES LIQUIDITY TRAP – FDI – REMITTANCES -TRADE CREDIT AG. FINANCE 1 2 FOREX AND FISCAL DEFICITS AG EXPENDITURE / INVESTMENT DOMESTIC AND ASSISTANCE POLICY RESPONSES SECTOR RESPONSE 3 4 IMPACT OF THE FINANCIAL CRISIS ON AGRICULTURE THE IMPACT CHANNELS

  18. IMPLICATIONS OF THE FINANCIAL CRISIS DEMAND, PRICES, AND AFRICAN EXPORTS IMPACT ON AGRICULTURAL EXPORTS IMPACT ON OVERALL AFRICAN EXPORTS Source: IFPRI/Estrades and Laborde Price data from IMF World Economic Outlook

  19. Finance constraints (actual country estimates) Source: IFPRI/Estrades and Laborde Page 19

  20. FDI AND AGRICULTURAL SECTOR GROWTH IN AFRICA Source: IFPRI/Badiane and Ulimwengu Page 20

  21. FINANCIAL CRISIS, DEVELOPMENT ASSISTANCE AND AGRICULTURAL GROWTH 1970-1980 1981-1990 1991-1999 2000-2006 Source: IFPRI/Badiane and Ulimwengu Page 21

  22. MACROECONOMIC RAMIFICATIONS OF THE FINANCIAL CRISIS IN AFRICA Source: IMF World Economic Outlook Page 22

  23. THE IMPACT OF THE FINANCIAL CRISIS ON GROWTH TRENDS IN AFRICA Source: IMF World Economic Outlook Page 23

  24. OVERVIEW OF RECENT GROWTH TRENDS IN AFRICA THE IMPLICATIONS OF CHANGING GLOBAL FOOD MARKETS 1 2 THE IMPACT OF CHANGING GLOBAL FINANCIAL MARKETS EMERGING AGRICULTURAL POLICY DEVELOPMENTS SUSTAINING AND ACCELERATING THE RECOVERY PROCESS 3 4 5 AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES

  25. THE COMPREHENSIVE AFRICA AGRICULTURE DEVELOPMENT PROGRAMME (CAADP) PILLAR FRAMEWORKS SECTOR COMPACTS KNOWLEDGE SYSTEMS STRATEGIC ISSUES LT INVEST. OPTIONS BENCHMARKING SUCCESS FACTORS COMMITMENTS PEER REVIEW • SECTOR POLICIES • BUDGET POLICIES • DEV. ASSISTANCE • POLICY DIALOGUE BEST PRACTICES MUTUAL LEARNING POLICY ELEMENTS EVIDENCE/OUTCOME BASED PLANNING AND IMPLEMENTATION SHARED LT FRAMEWORK FOR ACTION DEVELOPMENT PARTNERSHIP AND ACCOUNTABILITY BETTER POLICY, GROWTH, POVERTY, AND FOOD SECURITY OUTCOMES Page 25

  26. OBJECTIVES AND OUTCOMES OF COUNTRY ROUND TABLE AND COMPACT OBJECTIVE OF ROUND TABLES 1. MAKE SURE THAT THE COUNTRY IS ON TRACK TO ACHIEVE THE CAADP GROWTH AND BUDGETARY OBJECTIVES, IF NOT 2. IDENTIFY EVENTUAL GAPS IN TERMS OF SECTOR POLICY, BUDGETARY, AND INVESTMENT MEASURES • ELABORATION OF A COUNTRY CAADP COMPACT TO GUIDE THE • IMPLEMENTATION OF CAADP IN THE LONG TERM , INCLUDING: • 1. COMMITMENTS IN TERMS OF SECTOR POLICIES, PUBLIC • EXPENDITURES, AND DEVELOPMENT ASSISTANCE • 2. ESTABLISHEMENT OF PARTNERSHIPS AND ALLIANCES • FOR SUCCESSFUL IMPLEMENTATION OF CAADP • 3. CREATION OF A MECHANISM FOR PEER REVIEW AND DIALOGUE • TO TRACK IMPEMENTATION PERFORMANCE AND THE PROGRESS • IN MEETING THE AGREED ON COMMITEMENTS OUTCOMES OF ROUND TABLES: CAADP COMPACT

  27. CREATING THE CONDITIONS FOR BETTER DEVELOPMENT OUTCOMES I. DEVELOPED COMPREHENSIVE AND OBJECTIVE DRIVEN STRATEGY FRAMEWORK WITH LIMITED SET OF CLEAR TARGETS II. EVALUATE COUNTRY EFFORTS AGAINST DEFINED TARGETS SHARED INVESTMENT AND PARTNERSHIP FRAMEWORK III. SPECIFY ALTERNATIVE ACTION SCENARIOS AND OUTCOMES BASELINES - MILESTONES - ACTION TARGETS - TOOLS IV. SET UP BENCHMARKING AND LEARNING MECHANISMS KNOWLEDGE SYSTEMS INFRASTRUCTURE V. ESTABLISH POLICY REVIEW AND DIALOGUE PLATFORM INCLUSIVE FORA AT COUNTRY LEVEL AND BEYOND

  28. OVERVIEW OF RECENT GROWTH TRENDS IN AFRICA THE IMPLICATIONS OF CHANGING GLOBAL FOOD MARKETS 1 2 THE IMPACT OF CHANGING GLOBAL FINANCIAL MARKETS EMERGING AGRICULTURAL POLICY DEVELOPMENTS SUSTAINING AND ACCELERATING THE RECOVERY PROCESS 3 4 5 AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES

  29. LONG TERM CHALLENGE NO. 1 BRIDGING THE GROWTH GAP TO ACCELERATE POVERTY REDUCTION Actual Poverty Rate in 1990

  30. LONG TERM CHALLENGE NO. 2 BRIDGING THE EXPENDITURE GAP TO ACCELERATE GROWTH Actual Poverty Rate in 1990 Source: Dollar a Day Poverty Rates from World Bank, PovCal Net, 2008 [poverty line $1.25]; Projected CAADP Poverty Rates from various IFPRI country CAADP Growth Simulation Studies

  31. THE EXPENDITURE CONVERGENCE AGENDA: MAXIMIZING SYNERGY BETWEEN GROWTH AND SOCIAL INVESTMENTS Sources: Government spending: Global database on public spending, DSGD, IFPRI, 2009; and ODA: OECD, 2008

  32. EFFECT OF 10% INCREASE IN SERVICES EXPENDITURE ON SOCIAL OUTCOMES, AGRICULTURAL EFFICIENCY, AND POVERTY HEALTH SERVICES EDUCATION SERVICES

  33. HOW TO MAXIMIZE LONG TERM GROWTH WHILE MEETING SHORT TERM SOCIAL NEEDS 1 MEETING THE DOUBLE CHALLENGEOF GROWTH ACCELERATION AND SOCIAL PROTECTION BASIC STRATEGIC QUESTIONS HOW TO MAXIMIZE SYNERGY BETWEEN SOCIAL SERVICES AND PRODUCTIVITY ENHANCING INVESTMENTS 2 HOW TO EXPLOIT GROWTH EXTERNALITIES OF SOCIAL SERVICES 3 HOW TO IMPROVE CONSIDERATION OF GROWTH SYNERGIES IN BUDGET PLANNING AND NEGOTIATIONS 4

  34. AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES CONCLUSIONS 1 • HAS REMARKABLE RECOVERY COMPENSATED FOR THE 2.5 DECADE ECON. STAGNATION? NO • STILL LARGE POCKETS OF POVERTY • PROGRESS TOWARDS POVERTY MDG PICKED UP PACE BUT NOT ENOUGH FOR MOST • NEED TO ACCELERATE AND BROADEN GROWTH TO REDUCE POVERTY FASTER Page 34

  35. AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES CONCLUSIONS 2 • GLOBAL CRISES ARE A THREAT BUT ALSO FULL OF OPPORTUNITIES FOR AFRICAN ECONOMIES • AFRICAN ECONOMIES HAVE SHOWN GREATER RESILIENCE THAN DURING PAST CRISES • AFRICAN AGRICULTURE IS WELL POSITIONED TO COMPETE AND BENEFIT FROM LONG TERM GLOBAL PRICE TRENDS • UNPRECEDENTED CONTINENT WIDE EFFORTS UNDER CAADP TO: • IMPROVE POLICY PLANNING / IMPLEMENTATION • RAISE GOVERNMENTS INVESTMENT IN AGRICULTURE. Page 35

  36. AGRICULTURAL AND ECONOMC GROWTH RECOVERY IN AFRICAIN THE CONTEXT OF GLOBAL CRISES CONCLUSIONS 3 • THE RECOVERY OF LAST 15 YEARS HAS CREATED A STRONG FOUNDATION TO BUILD UPON • BETTER CONDITIONS FOR HIGHER RETURNS TO INVESTMENTS IN AND ASSISTANCE TO AFRICA • UNPRECEDENTED CONTINENT WIDE EFFORTS UNDER CAADP TO: • IMPROVE POLICY PLANNING / IMPLEMENTATION • RAISE GOVERNMENTS INVESTMENT IN AGRICULTURE • AND SUSTAIN / DEEPENTHE RECOVERY PROCESS Page 36

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