Transformational Investment in Agri-food Systems and Youth Employment

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1 Transformational Investment in Agri-food Systems and Youth Employment Lulama Ndibongo Traub Co-Director: Bureau of Food and Agricultural Policy (BFAP), Stellenbosch University South Africa Dr. Felix Kwame Yeboah Assistant Professor, Michigan State University (MSU) USA

2 Africa in the 21 st Century Africa is beyond bemoaning the past for its problems. The task of undoing that past is ours, with the support of those willing to join us in a continental renewal. We have a new generation of leaders who know that we must take responsibility for our own destiny, that we will uplift ourselves only by our own efforts in partnership with those who wish us well. -- Nelson Mandela

3 Seven Megatrends Trend #1: Demographics Trend #2: Global food & energy prices Trend #3: Rapid Changes in Land Distribution: Rise of the medium-scale farmer Trend #4: Land Degradation Trend #5: Income growth & distribution Trend #6: Climate Change Trend #7: Big data & Disruptive Technology

4 Seven Megatrends Trend #1: Demographics Rapid population growth Youth bulge Trend #2: Global food & energy prices Trend #3: Rapid Changes in Land Distribution: Rise of the medium-scale farmer Trend #4: Land Degradation Trend #5: Income growth & distribution Trend #6: Climate Change Trend #7: Big data & Disruptive Technology

5 Trend #1: Rapid Population Growth

6 SSA population growth projections Billions of people Rest of world Sub-Saharan Africa Source: World Bank Development Group, 2015

7 Implication?

8 Source: OECD/FAO (2017), OECD-FAO Agricultural Outlook, OECD Agriculture statistics (database), Regional shares in commodity consumption growth: % 90% 80% Rest of World OECD Southeast Asia Sub-Saharan Africa China India 70% 60% % 40% 30% % % 0% Wheat Rice Maize Other coarse grains Fresh dairy Meat Fish Roots and tubers Sugar Vegetable oil

9 SSA Total Food Imports from 7 to 38 billion USD ( ) % USD Billions Total Food Importsl_SSA Total Food Imports_nonSSA Total value food imports as % value of domestic agriculture production Source: ITC Trade Map

10 Can Africa Feed Itself?

11 SSA Total Food Imports from 7 to 38 billion USD ( ) % USD Billions Total Food Importsl_SSA Total Food Imports_nonSSA Total value food imports as % value of domestic agriculture production Source: ITC Trade Map

12 Is this cause for concern?

13 Food Import Growth and Employment: Manufacturing employment shares declined more rapidly for food import reliant countries Average annual % change in share of labor force engaged in manufacturing Senegal Malawi Tanzania Nigeria Kenya Botswana Ghana avg_g_imp_value Average annual import value growth rate (%) d_man_em_share Fitted values Mauritius Source: GGDC and World Bank

14 Source: Yeobahand Jayne, 2017 Off-farm Agri-food System jobs largely in commerce and less in agro-processing

15 Source: Yeobahand Jayne, 2017 Off-farm Agri-food System jobs largely in commerce and less in agro-processing

16 Are we exporting our jobs?

17 Strategies When the solution is simple, God is answering Albert Einstein

18 Strategies Primary Agricultural Level: Implement policies that promote broad-based agricultural growth Growth driven by efficiency

19 Agricultural Output Growth Decomposition: % 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% SSA, Central SSA, Eastern SSA, Horn SSA, Sahel SSA, Southern SSA, Western SSA, Nigeria SSA TOTAL, without South Africa Irrigation Land expansion Input Intensification TFP Source: Jayne, T. S., World bank data

20 Strategies Primary Agricultural Level: Implement policies that promote broad-based agricultural growth Improved efficiency innovation Innovation increase in public expenditure in R&D and extension services

21 Strategies Agriculture budget allocation by categories (%) Source: MAFAP, 2017 Burkina Faso Burundi Ghana Kenya Malawi Mali Mozambique Senegal Tanzania Uganda Benin R&D Extension & Training % 9.2% % 6.3% % 1.9% % 11.0% % 12.0% % 8.3% % 16.9% % 26.8% % 3.3% % 3.6% % 3.3% % 1.2% % 7.6% % 7.6% % 4.1% % 5.0% % 14.8% % 16.2% % 16.1% % 23.0% % 13.2% % 7.3%

22 Strategies Agriculture budget allocation by programs (%) Country Year R&D Extension & Training Burkina Faso Burundi Ghana Kenya Malawi Mali Mozambique Senegal Tanzania Uganda Benin % 9.2% % 6.3% % 1.9% % 11.0% % 12.0% % 8.3% % 16.9% % 26.8% % 3.3% % 3.6% % 3.3% % 1.2% % 7.6% % 7.6% % 4.1% % 5.0% % 14.8% % 16.2% % 16.1% % 23.0% % 13.2% % 7.3%

23 Strategies Agriculture budget allocation by programs (%) Country Year R&D Extension & Training Burkina Faso Burundi Ghana Kenya Malawi Mali Mozambique Senegal Tanzania Uganda Benin % 9.2% % 6.3% % 1.9% % 11.0% % 12.0% % 8.3% % 16.9% % 26.8% % 3.3% % 3.6% % 3.3% % 1.2% % 7.6% % 7.6% % 4.1% % 5.0% % 14.8% % 16.2% % 16.1% % 23.0% % 13.2% % 7.3%

24 Strategies Agro-Processing Level: Develop and implement industrial policy aimed at reducing costs, improving competitiveness and diversifying the economic base

25 Strategies Reducing the cost of doing business Improvements in physical infrastructure (cold chain development) Low-cost reliable energy

26 Source: Meyer, Ferdi (2017) 30,000 broilers (ZAR 1 million) lost in one night!

27 0.4 Stylized Facts of Structural Transformation Mauritius Sectoral Shares of Employment: ag_emp_share man_emp_share service_emp_share Source: World Bank Development Group, 2015

28 Ease of Doing Business Index: Mauritius Kenya Botswana South Africa Zambia Malawi Ghana Tanzania Senegal Nigeria Ethiopia Ease of Doing Business Rank Getting Electricity Source: World bank data

29 We need to get it right

30 Youth Bulge & Employment 30 Source: United Nations, Department of Economic and Social Affairs, Population Division (2013).

31 Thank You