Transforming African Economies for Sustained Growth with Rising Employment and Incomes

1. O. BADIANE
Director for Africa
IFPRI

2. KEY TOPICS
1. Tracking CAADP indicators
Since Maputo en route to Malabo
2. Mutual Accountability
Improved JSR Processes
Setting up Country SAKSS
3. Featured Topic: Background
4. Featured Topic: Key Findings
Major global and domestic trends
Key Drivers of Economic Recovery
Growth and Structural Change
Transformation of Ag. Value Chains
The challenge of industrialization
Infrastructure Gaps and Future

3. TRACKING INDICATORS: 2014 COMPARED TO PRE-CAADP (95-03)
 AGRIC. EXPENDITURE (US$2005) + 86%
 GROWTH between + 23 and 64%
o PER CAPITA GDP (US$2005)
o AG. VALUE ADDED (US$2005)
o AG. LABOR PRODUCTIVITY (US$2005)
o CEREAL YIELDS
 POVERTY REDUCTION between - 23 and - 36%
o POVERTY GAP -
o POVERTY HEADCOUNT (%POP)
 NUTRITION IMPROVEMENT between -20 and 43%
o MALNUTRITION (%POP)
o LOW WEIGHT FOR AGE (%UNDER 5)
o LOW HEIGHT FOR AGE (%UNDER 5)

4. ENHANCING MUTUAL ACCOUNTABILITY (# OF COUNTRIES)
IMPROVED JSR 17 going to 18
SAKSS PLATFORMS 9 going to 15
eATLAS TOOL 13 going to 21
NEW ALLIANCE 10
GROW AFRICA 12

5. 2014 FEATURE TOPIC: BACKGROUND
Africa is second fastest growing region in the World
• GDP growth rate: 5.2% (3.9 Pre-CAADP)
• Per capita GDP growth: 2.3% (1.3 Pre-CAADP)
Overall GDP doubled from the 1990s
Per capita GDP rose by 35%
Factors behind growth recovery
• Improvements in macro and sector policies
• Increased investments
• Favorable commodities prices

6. FEATURE TOPIC: BACKGROUND
Key areas of concerns
• Economic stagnation / decline prior to growth recovery
- Continued population growth
- Sharp increase in poverty rates in the past
• Recovery not long / strong enough to make up for lost
ground
• MDG1 not achieved by many countries despite good
progress
• Can recovery be sustained or even accelerated?
• How to avoid trap of growth with low employment creation
and slow income generation?

7. FEATURE TOPIC: KEY FINDINGS
Major global and domestic trends
• Most African countries will achieve middle income
status by 2030
• Production for most crops will double by 2050
• Africa’s production shares will increase for most crops
• Demand will double for some crops and triple for others
• Africa will remain a net importer
• Effect of climate change varies by crops
• But it will raise prices for all crops
1

8. FEATURE TOPIC: KEY FINDINGS
Major global and domestic trends (Continued)
• Volatility of food and energy prices will remain
• Urbanization will continue its rapid pace
• Rise in incomes and middle class will continue
• The youth population will continue to grow
1

9. FEATURE TOPIC: KEY FINDINGS
Current Economic Recovery and its drivers
• Length and geographic spread of current growth recovery is
unprecedented
• But it will take many more decades to make up for the loss
from 3 decades of stagnation and decline pre-recovery
• Key drivers of current and future growth
- Quality macro and sector policies
- Quality of governance
- Increase in savings, investments, FDI, ODA
• They made it possible for economies to respond to rising
commodity prices
2

10. FEATURE TOPIC: KEY FINDINGS
Growth and structural change performance
 Structural change reduced overall labor productivity prior
to recovery
o It moved labor out of stagnating agriculture into fast
growing, lower productivity informal goods and
services (IGS) sector
 IGS is now by far the largest sector in African economies,
with consequences for future growth strategies
 During recovery, structural change has started to raise labor
productivity
o Higher productivity in IGS and manufacturing is pulling
labor out of growing agriculture
3

11. FEATURE TOPIC: KEY FINDINGS
Transformation agricultural value chains
• Diets across Africa are changing due to rapid urbanization
and rising middle class
• Resulting in rapid changes in downstream segments of food
staples value chains, with implications for:
- Agribusiness enterprise creation and growth
- Employment creation for women and youth
- Income generation for local farmers
- Food safety, health, and nutrition
4

12. FEATURE TOPIC: KEY FINDINGS
The challenges of industrialization
• Africa has lacked strong and consistent industrialization
policies
• Manufacturing growth has been weak and contributed little
to recent growth recovery
• Renewed industrial development strategies are critical to
deepening and sustaining growth, which calls for:
- Continued improvement in economic governance
- Increased investment in infrastructure and S&T
- Adequate institutional infrastructure for expanded
management and technical training
5

13. FEATURE TOPIC: KEY FINDINGS
Infrastructure gaps and future growth: Rural telecom,
Electrification, Roads, and Water
• Infrastructure gap compared to other regions:
- Largest in the power sector
- Significant for roads
- Varies by type: none for mobile, large for broadband
• Serious handicap for future competitiveness and growth
• Key elements of strategy to fill infrastructure gap:
- Strong regulatory institutions
- Sound legal frameworks
- Market based, public private partnership
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14. OVERALL CONCLUSIONS
 ALL CORE CAADP INDICATORS SHOW GOOD PROGRESS
 RECENT GROWH DRIVEN BY BETTER GOVERNANCE, POLICIES, INVESTMENT
 ECONOMIC TRANSFORMATION IS UNDERWAY
 POSITIVE FUTURE OUTLOOK WITH POTENTIAL KEY CHALLENGES
 MAIN RISKS TO FUTURE GROWTH AND PROSPERITY
o REVERSAL OF IMPROVEMENTS IN POLICY AND GOVERNANCE
o ABSENCE OF SOUND INDUSTRIAL DEVELOPMENT STRATEGIES
o PERSISTENT AND SERIOUS INFRASTRUCTURE GAPS

15. OVERALL CONCLUSIONS
ATOR FINDINGS HIGHLIGHT RELEVANCE OF MALABO TARGETS
 SUSTAINED PROGRESS TO END HUNGER AND REDUCE POVERTY BY 2025
 GROWING AGRICULTURE TO FURTHER FUEL TRANSFORMATION
 IMPROVED GOVERNANCE THRU MUTUAL ACCOUNTABILITY
 INVESTMENTS TO FILL TECHNOLOGY AND INFRASTRUCTURE GAPS
 RAISE COMPETITIVENESS TO BOOST INTRA AND FOREIGN TRADE
 GREATER RESILIENCE AGAINST FUTURE RISKS AND SHOCKS

16. ATOR15 FEATURE TOPIC
« ACHIEVING NUTRITION REVOLUTION IN AFRICA:
THE ROAD TO HEALTHIER DIETS FOR ALL »