Megatrends Transforming Africa’s Agrifood System
F. Kwame Yeboah, T.S. Jayne, Milu Muyanga, Ayala Wineman, Lulama Traub
Presentation at the First Evidence to Action Conference for West Africa University of Ghana, Legon, Accra, Ghana
July 25-‐26, 2017
Africa’s Changing Economic Landscape1984 1992
• Impressive economic growth since 2000 • Six of 10 fastest growing economies in Africa (Kearney, 2014)• Several countries with GDP growth above 5% (IMF, 2013)
• Growth prospects remain favorable despite changes in external environment• Commodity price slum• Slow down in world’s economy (China)• Rise of US interest rates
Africa’s Changing Economic Landscape
2011
Salient “mega-‐trends” affecting Africa’s AFS
• SSA undergoing rapid transformation in response to key megatrends with implications for the demand and supply of agricultural and food products • Rapid population growth and labor force expansion• Rapid growth in food demand/reliance on food import• Rise of investor farmers/Changing farm sizes• Land scarcity and land degradation• Labor exit from farming• Climate change
• Megatrends often couched as inevitable transformation
Main Argument
• Most “megatrends” shaping the future of AFS are less certain and are neither irreversible nor inevitable• dependent on the time path of other trends that are highly uncertain• Policy can influence future trajectory of some trends
Objectives
Figure 1: Classification of Megatrends According to Predictability and Potential influence via Policy
Likelihood of arising
Potential for influence via policy
High
Low
High Low
Rising world food prices
Youth bulge / labor force expansion
Increased demand for
land in Africa Land
degradation
Climate change
Rapid/broad-based income growth
Moderate
Moderate
Potential impact on food system
• Investigate “mega-‐trends” shaping African Food System (AFS)
• Consider how policy can influence the trends
• Recognizing • variation across countries• The trends we highlight are not
the only ones
Trend # 1. Rapid population growth and labor force expansion (Youth bulge)
04 AFRICA AGRICULTURE STATUS REPORT 2016
Figure 1.1: Population projections for sub-Saharan Africa and the rest of world
and changing food diets associated with income growth. This chapter highlights the evidence behind these major trends, which generally indicate that agricultural transformation and broader economic transformation are now underway in much of the region. At the same time, major challenges are looming on the horizon. Subsequent chapters of the 2016 AASR examine these trends and challenges in detail. This chapter ends with a discussion of potential implications for African governments, the private sector, civil society and international development partners seeking to achieve their sustainable development goals through encouraging the region’s nascent agricultural transformation processes.
Salient Trends
This section highlights 10 major trends: (i) Africa’s mushrooming population growth; (ii) urbanization and urban population growth; (iii) shifts in the labor force toward non-farm employment; (iv) generally positive agricultural productivity growth rates and associated poverty reduction; (v) land degradation; (vi) rising land prices; (vii) increasing climate variability; (viii) the region’s increasing dependence on imported staple foods; (ix) improved market access conditions for smallholder farmers; and (x) changing farmland ownership and farm size distributions. These trends present both challenges and opportunities, as summarized in this chapter and addressed in more depth in the various chapters.
Africa’s population explosion
Today, SSA accounts for 950 million people, roughly 12 percent of the world’s population. This share will rise to 31 percent by 2050 and to 34 percent by the end of this century as the region’s population is projected to quadruple to roughly 4 billion people (Figure 1.1). As Africa comprises an increasing share of the world’s population, African affairs will increasingly affect other areas of the world—economically, politically, demographically, and culturally.
The region’s rapid population growth is due to rising life expectancy, declines in death rates, particularly of children, and more recently to lower fertility rates, especially among educated urban women. But compared to other regions of the world, Africa is experiencing a slow decline in fertility. While child mortality rates have declined, fertility rates have remained high, leading to the “youth bulge” that the region is now experiencing (Filmer & Fox, 2014). Today, 62 percent of Africa’s population is below the age of 25 years. Africa is the only region of the world where the population of under 15s is continuing to grow (Figure 1.2).
Notes: The estimated population for SSA was 12.3 percent of the world’s population in 2015, and is projected to com-prise 21.7 percent in 2050 and 34.0 percent in 2100.
Source: United Nations (2016)
Another salient demographic trend, unlike any other continent or region, is that SSA is expected to experience expanding rural population between 2015 and 2050 (Figure 1.3). Rural Africa is expected to have nearly 60 percent more people in 2050 than it has today.
Rapid population growth, including in rural areas, may be projected to affect the region’s agricultural sectors in several important ways. First, rapid population growth will put rising pressure on African food systems to feed its fast growing cities. Second, we might expect to see rising land values and the growth of land markets, especially in areas of favorable market access, as more people seek land not only for farming but for housing and other non-farm purposes. Third, as finite land becomes more populated, it will be increasingly unlikely that young people can expect to inherit land, causing migration and demographic and labor market shifts that are already well underway in relatively densely populated areas, but not yet in others.
Urbanization and urban population growth
Population is growing especially rapidly in Africa’s urban areas as shown in Table 1.2. By 2050, the majority of the population in most African countries is likely to be in urban areas. But urbanization is proceeding at a highly variable pace (Bocquier, 2005; Potts, 2012). Over the past
Population projections for SSA and the rest of the world
Source: United Nations (2016)
• Only region of world where rural population continues to rise past 2050
• 53% more people in rural Africa by 2050 than there was in 2015
• Africa’s impact on world economy will amplify
• Pressure on African production system to feed growing population
8Source: UN 2013
ChinaIndia
Other South Asia
South-‐East Asia
Sub-‐Saharan Africa
0
100
200
300
400
500
600
700
800
900
1000
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
Total Rural Population (millions)
1. Rapid population growth and labor force expansion(Youth bulge)
Looming employment challenge
9-‐10% -‐5% 0% 5% 10%
[0-‐4]
[5-‐9]
[10-‐14]
[15-‐19]
[20-‐24]
[25-‐29]
[30-‐34]
[35-‐39]
[40-‐44]
[45-‐49]
[50-‐54]
[55-‐59]
[60-‐64]
[65-‐69]
[70-‐74]
[75-‐79]
[80+]
Male
Female
62% of people <25 years old
Source: UN Pop Council, 2013
• 3% growth in labor force per year
• 375 million young Africans to become of working age by 2035 but only a quarter may find wage jobs (Losch 2016)
• Agriculture will need to absorb a large share of new workers into gainful employment
• Little scope of policy to alter trajectory of Africa’s “youth bulge”• Over a 10-‐15 year period, family planning
policies can greatly reduce population growth rates (as in much of Asia)
Trend # 2Rising Food Demand and Reliance on Food Imports
• Growing demand for food • Population growth and urbanization
• Rising incomes and diet transformation (Tschirley et al., 2015; Hollinger and Staatz, 2015)
• Rising reliance on imported foods • SSA food import rose from US$ 6 billion to US$ 45 billion between 2001 and 2014
• Great potential for job creation if rising food consumption requirements can be satisfied by local production rather than imports.
• Future dependence on imports subject to public investment patterns
Source: RENAPRI (2017)
0
5
10
15
20
25
30
35
40
45
50
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
USD Billion
s
SSA Imports from non-‐SSA SSA's imports from SSA
Trend # 3 Labor exit from farming and corresponding rapid
percentage growth in off-‐farm jobs
44
22
6661
5761
34 34
5449 49 47
0
10
20
30
40
50
60
70
Ghana (2006-‐2013)
Nigeria (2004-‐2013)
Rwanda (2006-‐2011)
Tanzania (2009-‐2015)
Uganda (2006-‐2012)
Zambia (2006-‐2012)
% of total FTE jobs
Share of total FTE jobs in farming over time
Base year End year
Source: Groningen Growth and Development Center, 2014
# of people employed in farming still rising
34 34
54
48 4947
1923
9
1714
9
4743
3735
38
44
0
10
20
30
40
50
60
Ghana (2012/13)
Nigeria (2012/13)
Rwanda (2010/11)
Tanzania (2012/13)
Uganda (2011/12)
Zambia (2012)
% of total jo
bs in FTE
Sectoral employment shares of total jobs in FTE
Farming Off-‐farm AFS Non-‐farm
Farming remains single largest employer of workforce
Pace of labor exit from farming and off-‐farm job creation depends on public investments in agriculture
Farming employment share declining most rapidly among countries enjoying highest agricultural productivity growth
Ghana
Kenya
Malawi
Mali
Nigeria
Rwanda
TanzaniaUganda
Zambia-2.00
-1.00
0.00
1.00
2.00
Annu
al %
chan
ge in
share
of la
bor fo
rce en
gage
d in f
arming
-2 0 2 4 6 8Average annual TFP growth in agriculture(%)
Trend line
Source: Yeboah and Jayne, 2016
% of National Landholdings held by Urban Households
26.8%
22.0%
11.2%
18.3%
10.9% 11.8%
32.7%
16.8%
22.0%
0%
5%
10%
15%
20%
25%
30%
35%
2008
2009
2004
2010
2010
2004/2005
2010
2007
2013/2014
Ghana Kenya Malawi Rwanda Tanzania Zambia
Source: Demographic and Health Surveys, various years between 2004-2014.
Trend # 4Concentration of landholdings/Rise of “investor farmers”
• Rising interest in Africa’s arable land
• Meteoric rise of medium-‐scale farms (5-‐20 ha)
• A large and rising share of arable land owned by urban-‐based households
• Urban-‐based HHs own between 10-‐30% of national agricultural landholdings (DHS data)
Three sub-‐categories of medium scale farmers: Ghana, Kenya, Zambia
Riseofthemedium-scalefarmers
GINI coefficients in farm landholding rising: Much higher than green revolution Asia and approaching levels in Latifundia agric systemGINIcoefficientsinfarmlandholding
39
Period MovementinGinicoefficient:
Ghana(cult.area) 1992à 2013 0.54à 0.70
Kenya(cult.area) 1994à 2006 0.51à 0.55
Tanzania(landholdings) 2008à 2012 0.63à 0.69
Zambia(landholding) 2001à 2012 0.42à 0.49
Source:Jayneetal.2014(JIA)
• Anticipate
• Decline in the share of farms under 5 hectares
• Development of land markets in areas with favorable market access
• Rising land prices
• Increased pressure to convert customary land into statutory land
• Increasing land scarcity for rural-‐born Africans
• Pace of the changes in farmland structure depend on public policy on landownership
Trend #5Widespread Soil Degradation
• Land pressure è continuous cultivation of land èsoil degradation
• Extent of degradation • 65% of arable land• 30% of grazing land• 20% of forests
• Trend amenable to policy • Investment in sustainable agricultural intensification
• Soil and land degradation a huge concern
¾ Major conclusion of Montpellier Panel report
¾ Extent of already damaged land: ¾65% of arable land ¾30% of grazing land ¾20% of forests
¾ Burden disproportionately carried by smallholders
34
Trend # 6Climate Change
• SSA projected to suffer greater effects from climate change• Reductions in annual rainfall and higher temperature in arid regions (IPCC, 2007)• Benin, Burkina Faso, Ghana, Mauritania, Niger and Nigeria may face water scarcity by
2025
• Impact on agriculture uncertain and likely to vary spatially• Greater variability in agricultural production• Possible decline in crop productivity (Schlenker and Lobell, 2010)
• Effect of climate change largely exogenous• Possible influence through policies that affect land use
20
Potential impact on food system
Potential for influence via policy
High
Low
HighLow
Youth bulge
Moderate
Moderate
Growth in non-‐farm employment
Changes in farm structure/rise of emergent farmers
Classification of Trends
Soil degradationRising reliance on food imports
Climate change
Summary• Don’t accept all these trends as inevitable• Some trends are highly uncertain, and dependent on the time path of other trends• Policy can influence future trajectory of some trends
• Agriculture will remain extremely important for economic growth and livelihoods• dominant source of employment for the expanding labor force at least in the next few decades• Performance of agriculture will be critical to the off-‐farm job expansion
Recommendations• Invest to raise agricultural productivity throughout the AFS • re-‐capture the growing urban and regional markets for local farmers/producers• generate growth multipliers (e.g. Off-‐farm job creation)
• Invest in education and skill development to upgrade the skills of workforce and prepare them to take advantage of emerging opportunities• Need for regular updates to the content and educational approaches as required skills are likely to change over time
• Consider the effects of land policies on inclusive growth and poverty reduction • Promote land allocation patterns that will maximize agricultural productivity and efficiency
• Include resilience agenda in agricultural growth strategies• Growth highly vulnerable to shocks (natural and man-‐made disaster)
Thank You
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