Of the total US$15.4 billion pledged by the international community at the end of the first day of the meeting of the Consultative Group on Côte d’Ivoire held on May 17, 2016 in Paris, the World Bank Group (IDA, IFC, MIGA) will commit the sum of US$5 billion (CFAF 2500 billion) to finance Côte d’Ivoire’s Second National Development Plan (NDP) covering the period 2016-2020. This amount is double the sum allocated during the previous period (2012-2016), proof—if any were needed—that the World Bank is more than ever committed to helping Côte d’Ivoire achieve emerging country status. This new country partnership framework between the World Bank Group and Côte d’Ivoire is an important milestone.
Agriculture and Rural Development
L’Afrique est à la croisée des chemins. La croissance économique s’est consolidée sur la majeure partie du continent et, dans de nombreux pays, les exportations sont en pleine expansion, les investissements étrangers en hausse et l’aide extérieure moins nécessaire. Les réformes de gouvernance transforment le paysage politique. La démocratie, la transparence et la responsabilisation des pouvoirs publics progressent, donnant aux habitants de la région un plus grand poids dans les décisions qui touchent leur quotidien.
Africa stands at a crossroads. Economic growth has taken root across much of the region. In many countries, exports are booming, foreign investment is on the rise and dependence on aid is declining. Governance reforms are transforming the political landscape. Democracy, transparency and accountability have improved, giving Africa’s citizens a greater voice in decisions that affect their lives.
Challenges for African Agriculture was first published in 2008 in French by Karthala, and then in English by the World Bank in 2011 as part of the Africa Development Forum Series, in partnership with Agence Francaise de Developpement. The book deals with the challenges facing Sub-Saharan agriculture.
Since the work appeared, the rural development challenges analyzed at length in the book, whether demographic, economic, environmental, social, cultural or political, seem even more difficult to contend with. Many Sub-Saharan countries, the Sahel in particular, have yet to begin their demographic transition. The agricultural economy, still largely dominated by small family farms, is hindered in achieving its full potential by the lack of interest demonstrated by weak public authorities and scattered aid agencies.
Most of Sub-Saharan Africa’s (SSA) economies are dominated by the agriculture sector. On average, agriculture accounts for 32% of gross domestic product and employs 65% of the labor force. In some countries, it contributes over 80% of trade in value and more than 50% of raw materials to industries.
Labor productivity in Sub-Saharan Africa has been garnering attention recently. Development economists focus on labor productivity because it tends to be strongly associated with overall well-being measures, especially for the poor, who are reliably endowed with time, but often little else in the way of productive assets.
Cross-sector gaps in labor productivity are key indicators of structural change, which is the economy-wide process by which labor shifts from low-productivity industries such as agriculture, to those that are higher-productivity, such as industry and services. This process underpins development and is premised on large cross-sector gaps in productivity. Economists expect these gaps to be quite large in the poorest countries, and to get smaller as labor shifts out of agriculture. Recent evidence suggests these forces are indeed at work in Sub-Saharan Africa.
Inorganic fertilizer use is claimed to be low in sub-Saharan Africa, but it is unclear whether using higher rates of fertilizer would be profitable. My coauthors and I sought to explore the effect of nitrogen on maize in farms across Nigeria to find out. To do this, we took advantage of the recently available Living Standards Measurement Study - Integrated Surveys on Agriculture, or LSMS-ISA, a household survey project working to collect up to date agricultural data for the same household over time.
What did we find?
Low yield response and high transport costs reduce fertilizer profitability
We found that little extra maize production is expected from adding more nitrogen at the margin; that is, the marginal physical product (MPP) of applied nitrogen for maize production in Nigeria is quite low at 8kg. Though within the range found in peer-reviewed published works, often between 7 and 14 kg, it is much lower than the potential yield response from plots on which research management protocols are being followed. These range between 14 to 50 kg maize per kg nitrogen (N) and even higher in some cases (Snapp et al, 2014). This low yield response to nitrogen in Nigeria extends to other cereals such as rice (See figure 1).
Food price volatility remains a pressing challenge for many African countries (FAO, IMF, and UNCTAD, 2011). The vast majority of Africa’s population still derives a substantial share of their income from agriculture and low-income households allocate a large share of their budget to food (often more than 60 percent). As a result, large and unexpected swings in food prices cause substantial losses in welfare, and when adequate coping strategies are absent, it may even trap households permanently into poverty. It should thus not surprise that food price shocks still feature highly among the reported shocks by households in Sub-Saharan (Nikoloski, Christiaensen, Hill, 2015).
Among African policymakers, the main reasons for high food price volatility in the domestic markets is often thought to be external, i.e. “imported” from the world food markets. However, the sources may also be domestic, for example when markets are poorly integrated internally. Under the “Agriculture in Africa – Telling Facts from Myths” project, data collected by the Société Nationale de Gestion du Stock Alimentaire (SONAGESS) on maize prices in 28 markets from Burkina Faso during the 2000s (July 2004-Nov 2013) were analyzed to tease out the extent to which maize price volatility is driven by domestic rather than external factors. Over the past decades, maize has become the most marketed and exported cereal in Burkina Faso. It now accounts for 31% of grain production, against only 7% three decades ago, and represents the second source of income for farmers, after cotton.
Among them, 38 percent are projected to work in household enterprises, amounting to around 65 million people. Studies show that jobs generated in the sectors where the poor work and places where the poor live, i.e. in the rural areas, are more effective at lifting them out of poverty.
But is this justified? If only small numbers of rural inhabitants are entrepreneurs, if they predominantly engage in low productive activities, or if they do not make significant contributions to household income, we need to be more skeptical with regard to the role of entrepreneurship. Or at least, we must more critically reconsider whether current supporting policies are appropriate or supportive enough.
One of the most common assumptions underlying current policy and development interventions in Sub-Saharan Africa is that the use of all modern agricultural inputs – like chemical fertilizer, improved seed varieties, irrigation, agro-chemicals, and machinery – remains dismally low. But when you examine the evidence underlying this basic claim, it’s easy to feel misled. Most of the well-perpetuated numbers we hear about are from highly aggregated macro-data sources while others are derived from small or purposively chosen samples. Even further, many of the studies that continue to be cited are a decade or two old and may no longer be accurate in an environment influenced by pledges made via the Abuja Declaration on fertilizer.
So what’s a policy analyst to do when the evidence base is likely problematic? Just wish and hope that more appropriate data existed? For a set of eight countries in Sub-Saharan Africa, the wait is over. The Living Standards Measurement Study Integrated Surveys on Agriculture now provide nationally representative and highly disaggregated data from farmers’ agricultural plots to help rebase our understanding of African agriculture and rural spaces.