Strategies and Priorities for African Agriculture Economywide Perspectives from Country Studies
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AND PRIORITIES FOR AFRICAN AGRICULTURE economywide perspectives from country studies EDITED BY XINSHEN DIAO | JAMES THURLOW | SAMUEL BENIN | SHENGGEN FAN About IFPRI The International Food Policy Research Institute (IFPRI®) was established in 1975 to identify and analyze alternative national and international strategies and policies for meeting food needs of the developing world on a sustainable basis, with particu- lar emphasis on low-income countries and on the poorer groups in those countries. While the research effort is geared to the precise objective of contributing to the reduction of hunger and malnutrition, the factors involved are many and wide- ranging, requiring analysis of underlying processes and extending beyond a narrowly defi ned food sector. The Institute’s research program refl ects worldwide collabora- tion with governments and private and public institutions interested in increasing food production and improving the equity of its distribution. Research results are disseminated to policymakers, opinion formers, administrators, policy analysts, researchers, and others concerned with national and international food and agricul- tural policy. IFPRI is a member of the CGIAR Consortium. Strategies and Priorities for African Agriculture Economywide Perspectives from Country Studies Strategies and Priorities for African Agriculture Economywide Perspectives from Country Studies Edited by Xinshen Diao, James Thurlow, Samuel Benin, and Shenggen Fan International Food Policy Research Institute Washington, D.C. Copyright © 2012 International Food Policy Research Institute. All rights reserved. Contact [email protected] for permission to republish. International Food Policy Research Institute 2033 K Street, NW Washington, DC 20006-1002, USA Telephone +1-202-862-5600 www.ifpri.org DOI: http://dx.doi.org/10.2499/9780896291959 Library of Congress Cataloging-in-Publication Data Strategies and priorities for African agriculture : economywide perspectives from country studies / edited by Xinshen Diao . [et al.]. p. cm. Includes bibliographical references and index. ISBN 978-0-89629-195-9 (alk. paper) 1. Agriculture—Economic aspects—Africa. 2. Agriculture— Economic aspects—Africa—Case studies. 3. Rural development— Africa. 4. Poverty—Africa. 5. Agriculture and state—Africa. I. Diao, Xinshen. HD2117.S75 2012 338.1096—dc23 2011043673 Contents Preface ix Acknowledgments xi Chapter 1 African Agriculture and Development 1 Joanna Brzeska, Xinshen Diao, Shenggen Fan, and James Thurlow Chapter 2 A Recursive Dynamic Computable General Equilibrium Model 17 Xinshen Diao and James Thurlow Chapter 3 Estimating Public Agricultural Expenditure Requirements 51 Samuel Benin, Shenggen Fan, and Michael Johnson Chapter 4 Kenya 71 James Thurlow, Jane Kiringai, and Madhur Gautam Chapter 5 Ethiopia 107 Xinshen Diao, Alemayehu Seyoum Taffesse, Paul Dorosh, James Thurlow, Alejandro Nin Pratt, and Bingxin Yu Chapter 6 Ghana 141 Clemens Breisinger, Xinshen Diao, James Thurlow, Samuel Benin, and Shashidhara Kolavalli Chapter 7 Rwanda 165 Xinshen Diao, Shenggen Fan, Sam Kanyarukiga, and Bingxin Yu viii CONTENTS Chapter 8 Nigeria 211 Xinshen Diao, Manson Nwafor, Vida Alpuerto, Kamiljon T. Akramov, Valerie Rhoe, and Sheu Salau Chapter 9 Malawi 245 Samuel Benin, James Thurlow, Xinshen Diao, Christen McCool, and Franklin Simtowe Chapter 10 Uganda 281 Samuel Benin, James Thurlow, Xinshen Diao, Allen Kebba, and Nelson Ofwono Chapter 11 Zambia 317 James Thurlow, Samuel Benin, Xinshen Diao, Henrietta Kalinda, and Thomson Kalinda Chapter 12 Mozambique 349 James Thurlow Chapter 13 Tanzania 371 Karl Pauw and James Thurlow Chapter 14 Lessons Learned and Remaining Challenges 399 Xinshen Diao and James Thurlow Contributors 415 Index 419 Preface or the first time in many years, Africa has enjoyed a period of strong and sus- tained economic growth. The agricultural sector has also grown at a moderate Frate, and this growth has contributed to significant reductions in poverty in many African countries. This improved agricultural performance is consistent with continentwide initiatives—one of the most important being the Comprehensive Africa Agriculture Development Programme—which aim to raise rural incomes, reduce poverty, and increase food and nutrition security through agricultural invest- ment and growth. This book examines the potential of agriculture to contribute to national growth and poverty reduction. It also evaluates the fi nancial costs of accelerating agricultural growth. The analysis is based on ten country case studies that apply similar economywide approaches to linking growth, poverty, and investment. The fi ndings indicate that, in most African countries, improving agriculture’s performance is essential to achieving pro-poor growth. They also point to export agriculture having high growth potential and becoming a prominent part of agri- cultural strategies. The research shows that broad-based growth will be diffi cult to achieve without expanding staple-foodcrop production and livestock produc- tion, since only they have the scale and linkages to poor households needed to reduce national poverty within a reasonable period of time. Finally, the case stud- ies confi rm the need for greater investment in agriculture. However, the effi ciency of agricultural investments will have to improve if development targets are to remain attainable. This book provides a structured approach to evaluating agricultural develop- ment strategies at the country level. The case studies demonstrate the application of important analytical methods that can be adopted by governments and researchers x PREFACE in developing countries. Of course, not all challenges facing agricultural develop- ment can be addressed by the methods presented in this volume. For example, analysis of the political economy of investment decisionmaking is also important to promot- ing agricultural growth. Nevertheless, this book provides valuable practical insights and guidance and will contribute to strategic thinking and investment planning and implementation in many African countries. Acknowledgments everal people have made this book possible. We are grateful to Peter Hazell, who initiated the evidence-based debates on the role of agriculture in the Searly 2000s that led to the development and application of computable general equilibrium models for agricultural growth–poverty analysis in an economy- wide framework. Jeff Hill encouraged this approach but also challenged the IFPRI research team on how to use it to address agricultural strategic development issues. The Comprehensive Africa Agriculture Development Programme (CAADP) pro- vided the context for applying this economywide analytical framework in the countries studied. While doing our research, we interacted with and learned from so many individuals, organizations, and agencies that it would be impossible to attempt to list all of them without leaving some out. We thank Ousmane Badiane for his leadership of the IFPRI-CAADP agree- ment, through which part of the funding for this work was made available. Financial support was also provided by the Belgian Trust Funds, the Bill & Melinda Gates Foundation, the Canadian International Development Agency, the European Com- mission, the Swedish International Development Cooperation Agency, the U.K. Department for International Development, the U.S. Agency for International Development, and the World Bank. Chapter 1 African Agriculture and Development Joanna Brzeska, Xinshen Diao, Shenggen Fan, and James Thurlow fter decades of income divergence between Africa and the rest of the world, a new era appears to have begun in many African countries.1 The decade A since 2000 has been one of macroeconomic stability, sustained economic growth, and improved governance. Although this performance was disrupted by the global recession and food crises in 2008–10, Africa was one of the less affected of the world’s developing regions. In fact, not only did growth accelerate in Africa during the 2000s, but this was also the first decade since the 1970s when Africa was not the slowest growing developing region (World Bank 2010a).2 It therefore marks a historic break from decades of internal and external deficits, economic stagna- tion, and political turmoil. Moreover, a wide range of African countries performed well, including oil-exporting and resource-rich countries, large and middle-income countries, and coastal and low-income countries (Arbache et al. 2008). The new millennium has heralded Africa’s first “decade of growth.” What is not clear, however, is whether Africa’s stronger and sustained growth will successfully lay the foundations for longer term economic transformation and prosperity. Despite some positive trends, many problems and challenges still remain. High levels of poverty, poor health, and malnutrition continue to plague many African countries. As a developing region, Africa still experienced an increase in its number of poor people during 2000–05 (World Bank 2010a). Moreover, some of Africa’s fastest growing economies have not signifi cantly reduced poverty, such as Mozambique and Tanzania (Republic of Mozambique 2010; United Republic of Tanzania 2010). These disappointing social outcomes are due to weak institutional, policymaking, and research capacity and to insuffi cient public investments that are 2 JOANNA BRZESKA ET AL. often misallocated and ineffi cient (see Fan 2008). The important role of evidence- based research in formulating pro-poor development strategies means that the lack of research