2. badiane board may13 agriculture and structural transformation
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FROM GROWTH RECOVERY TO ECONOMIC TRANSFORMATION IN AFRICA

FROM GROWTH RECOVERY TO ECONOMIC TRANSFORMATION IN AFRICA

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  • We did not have enough variation in pc GDP so we are plotting the changes over time (x axis is not GDP pc but 1960 – 2008)
  • LABOR SHARE IS SHARE IN ACTIVE POPULATION

2. badiane board may13 agriculture and structural transformation 2. badiane board may13 agriculture and structural transformation Presentation Transcript

  • IFPRI/BadianeOUSMANE BADIANEDirector for AfricaInternational Food Policy Research InstituteFROM GROWTH RECOVERYTO ECONOMIC TRANSFORMATION IN AFRICA
  • MAIN TOPICS1 KEY MESSAGES23 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTYGROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICAFROM GROWTH RECOVERYTO ECONOMIC TRANSFORMATION IN AFRICA
  • MAIN TOPICS1 KEY MESSAGES23 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTYGROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICAFROM GROWTH RECOVERYTO ECONOMIC TRANSFORMATION IN AFRICA
  • IFPRI/BadianeWHERE ARE WE AND WHY? STRUCTURAL CHANGE IN AFRICA HAS BEEN PRODUCTIVITY-REDUCING NEGATIVE DIVERSIFICATION MOVED LABOR FROM UNDERPERFORMING HIGHER-PRODUCTIVITY AGRICULTURE INTO OVERSIZED LOWER-PRODUCTIVITY SERVICES SECTOR LACK OF EFFECTIVE INDUSTRIALIZATION POLICY IMPEDED GROWTH IN MANUFACTURING SECTOR FORCED SPECIALIZATION IN LOW VALUE PRIMARY GOODS DELAYED STRUCTURAL TRANSFORMATION STRONGLY LINKED TO HIGH LEVELS OF POVERTYKEY MESSAGES
  • MAIN TOPICS1 KEY MESSAGES23 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTYGROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICAFROM GROWTH RECOVERYTO ECONOMIC TRANSFORMATION IN AFRICA
  • THE ECONOMIC GROWTH PROCESSCOUNTRIES BECOME RICH BY PRODUCING MORE OUTPUT PER GIVEN WORKERTHIS INVOLVES PRODUCING MORE OF THE SAME GOODAND MORE IMPORTANTLY, PRODUCING A LARGER BASKET OF HIGHER VALUEGOODSCOUNTRIES ALSO BECOME RICH OVER TIMESTARTING FROM AN AGRICULTURAL AND RURAL BASEMOVING TO AN URBAN AND INDUSTRIAL BASE
  • THE ECONOMIC GROWTH PROCESSTHE DOUBLE CHALLENGE OF MANAGING THE GROWTH PROCESSRAISING PRODUCTIVITY AGRICULTURE AND THE RURAL ECONOMYWHILE DIVERSIFYING INTO HIGHER VALUE GOODS OUTSIDE OF AGRICULTUREDETERMINING FACTORSHUMAN AND PHYSICAL ASSETSINSTITUTIONAL AND TECHNOLOGICAL RESOURCESPOLICY AND COORDINATION CAPACITIES
  • AFRICA IS UNDERGOING ITSLONGEST PERIOD OF SUSTAINED GROWTH SINCE THE 1960S-8-6-4-2024681012197119731975197719791981198319851987198919911993199519971999200120032005200720092011AnnualGrowthRate(%)GDP, annual growth rate (%)Agriculture, hunting, forestry, fishing, annual growth rate (%) Source: UN National Accounts, 2013
  • IFPRI/BadianeTHE GROWTH IS ACCELERATINGAS WELL AS SPREADING GEOGRAPHICALLYSOURCE: IFPRI / Badiane and UlimwenguData from national account s / UN database: http://data.un.org/Explorer.aspx?d=SNAAMA
  • MAIN TOPICS1 KEY MESSAGES2 GROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICA3 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA4 STRATEGIES FOR THE AGRICULTURAL SECTOR5 STRATEGIES FOR THE INDUSTRIAL SECTORFROM GROWTH RECOVERYTO ECONOMIC TRANSFORMATION IN AFRICA
  • Per-capita IncomeShare of agriculturein total labor forceShare of agriculturein total GDPlowHighAgricultural GDPper workerAgriculturalGDPlow highAGRICULTURE IN THE ECONOMIC TRANSFORMATION PROCESSBased on Timmer (2009)
  • Share of agriculturein total labor forceShare of agriculturein total GDPAGRICULTURE IN THE ECONOMIC TRANSFORMATION PROCESSTime Axis0100Ag GDP Share = Ag labor shareAg incomes = Non Ag incomes
  • AGRICULTURE IN THE ECONOMIC TRANSFORMATION PROCESS0100CONVERGENCE: [Ag GDP Share – Ag labor share] => 0
  • (60)(40)(20)-204060801001960196219641966196819701972197419761978198019821984198619881990199219941996199820002002200420062008Share(%)CENTRAL AFRICA(60)(40)(20)-204060801001960196219641966196819701972197419761978198019821984198619881990199219941996199820002002200420062008Share(%)EAST AFRICA(60)(40)(20)-204060801960196219641966196819701972197419761978198019821984198619881990199219941996199820002002200420062008Share(%)SOUTHERN AFRICAAg GDP ShareAg Emp. ShareDifference(60)(40)(20)-204060801001960196219641966196819701972197419761978198019821984198619881990199219941996199820002002200420062008Share(%)WEST AFRICATRENDS IN STRUCTURAL CHANGE AMONG AFRICAN COUNTRIES 1960 - 2008
  • TRENDS IN LABOR PRODUCTIVITY AND EMPLOYMENT IN AFRICA 1980 - 2008-20406080100120140198019821984198619881990199219941996199820002002200420062008Index:1980=100LABOR PRODUCTIVITY-1020304050607080198019821984198619881990199219941996199820002002200420062008Share(%)LABOR EMPLOYMENT SHARELABOR PRODUCTIVITY HASSTAGNATED IN AGRICULTUREAND DECLINED SHARPLY IN NONAGRICULTURAL SECTOR, DRIVENPRIMARILY BY LOW-PRODUCTIVITYSERVICESEMPLOYMENT HAS FALLENSLIGHTLY IN AGRICULTURE ANDINCREASED RAPIDLY IN NONAGRICULTURAL SECTOR, AGAINDRIVEN BY SERVICES AND LESS BYINDUSTRYAgricultureNon-agricultureSource: FAOSTAT 2011
  • (0.020)(0.015)(0.010)(0.005)-0.0050.0100.0150.020AFRICACAFEAFSAFWAFNAF1980-1995Agriculture Non Agriculture(0.030)(0.020)(0.010)-0.0100.0200.0300.0400.0500.0600.070 AFRICACAFEAFSAFWAFNAF1995-2005Source: FAOSTAT, 2011 and WDI, 2009SECTORAL CONTRIBUTIONTO PRODUCTIVITY GROWTHNEGATIVE CONTRIBUTION OFNON AG. SECTOR DURINGTHE 1980S TO MID 1990SBETTER CONTRIBUTION OFBOTH SECTORS WITHRECOVERY IN THE LATE1990S,
  • (0.070)(0.060)(0.050)(0.040)(0.030)(0.020)(0.010)-0.0100.0200.0300.040AFRICACAFEAFSAFWAFNAFSource: FAOSTAT, 2011 and WDI, 2009CONCLUSION NO. 1STRUCTURAL CHANGE CONTRIBUTED NEGATIVELY TOPRODUCTIVITY GROWTH WITH EXCEPTION OF WEST AFRICA1980-1995 1995-2005
  • MAIN TOPICS1 KEY MESSAGES23 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTYGROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICAFROM GROWTH RECOVERYTO ECONOMIC TRANSFORMATION IN AFRICA
  • AGRICULTURAL SECTOR UNDERPERFORMANCE AND STRUCTURAL CHANGETHE SHARE OF THE AGRICULTURAL SECTOR IN OVERALL GDP IS LOWER IN NEARLY ALL AFRICANCOUNTRIES THAN WOULD HAVE BEEN EXPECTED BASED ON THE LEVEL OF PER CAPITAOBSERVED AVERAGE SHARES OVER THE LAST 30 YEARS ARE AROUND 30%, NEARLY 20 PERCFENTAGEPOINTS BELOW WHAT WOULD BE EXPECTED BASED ON COUNTRIES’ LEVEL OF DEVELOPMENTObserved Ag GDP Share Expected Ag GDP ShareRelationship based on sample of 210 countries over 1960-2008 period0.010.020.030.040.050.060.070.080.090.0100.0AgriculturalshareofGDP(%)
  • -51015202530354045East Asia & Pacific Latin America &CaribbeanMiddle East &North AfricaSouth Asia Sub-Saharan AfricaShare(%)Average Share of Agriculture in GDP1965-1980 1980-1995 1995-2008CONLUSION NO. 2RELATIVELY UNDERSIZED HIGHER-PRODUCTIVITY AGRICULTURAL SECTORHAS IMPACTED NEGATIVELY ON TRANSFORMATION$1,758 $4,767 $1,909 $682 $618SOURCE: IFPRI/Badiane & Makombe based on data from WDI, 2009Pc GDP in 2008
  • OVERSIZED SERVICE SECTOR AND STRUCTURAL CHANGE IN AFRICAON THE OTHER HAND, THE SHARE OF THE SERVICES SECTOR IN GDP IS MUCH LARGER IN THE MAJORITY OFCOUNTRIES COMPARED WHAT WOULD HAVE BEEN EXPECTED BASED ON THE LEVEL PER CAPITA INCOMESTHE RELATIVELY BIGGER SERVICES SECTOR IS LINKED TO THE UNDERSIZED AGRICULTURAL SECTORIT IS A REFLECTION OF “NEGATIVE DIVERSIFICATION” WITH LABOR LEAVING THE UNDERPERFOMINGAGRICULTURAL SECTOR TO MOVE INTO THE EQUALLY UNPRODUCTIVE OR LESS PRODUCTIVE SERVICES SECTOR0.010.020.030.040.050.060.070.080.090.0ServicesshareofGDP(%)Observed Ag GDP Share Expected Ag GDP ShareRelationship based on sample of 210 countries over 1960-2008 period
  • -10203040506070East Asia & Pacific Latin America &CaribbeanMiddle East & NorthAfricaSouth Asia Sub-Saharan AfricaShare(%)Average Share of Services in GDP1965-1980 1980-1995 1995-2008SOURCE: IFPRI/Badiane & MakombeData from WDI, 2009CONCLUSION NO. 3RELATIVELY OVERSIZED LOWER-PRODUCTIVITY SERVICES SECTORHAS IMPACTED NEGATIVELY ON TRANSFORMATION$1,758 $4,767 $1,909 $682 $618
  • MAIN TOPICS1 KEY MESSAGES23 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTYGROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICAFROM GROWTH RECOVERYTO ECONOMIC TRANSFORMATION IN AFRICA
  • CONCLUSION NO. 4THE UNDERPERFORMING AGRICULTURAL SECTOR IS NOT JUST DELAYING TRANSFORMATIONIT IS ALSO CONTRIBUTING TO HIGHER POVERTY RATESANGBNBTNBFCMNCARCHDDRCCGCIGBAGHNGNEGNEBKYALSTLBRMDGMIMTAMZQNBANGRNGRARWDSNGSLSASZLTZNTGUGDZBNote: y_hat=43.363*-0.534*x, over 1990-200520406080100-60 -50 -40 -30 -20 -10 0Observed-expected Ag GDP share
  • 0.02.04.06.08.010.012.0196219631964196519661967196819691970197119721973197419751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000Expy(1,000$US)Brazil ChinaAfrica0.00.51.01.52.02.53.03.54.04.5196219631964196519661967196819691970197119721973197419751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000Expy(1,000$US)Non-agriculture AgricultureNon-agricultureCONCLUSION NO. 5PRODUCTIVITY-REDUCING STRUTURAL CHANGECONFINED AFRICAN ECONOMIES TO LOWER VALUE PRODUCTSEXPY measures the extent to which a country has Revealed Comparative Advantage in sophisticated /higher value products (AVG over 100 countries > 10,000$ (Hausmann and Klinger, (2006)
  • PROMOTING SUCCESSFUL STRUCTURAL CHANGEIMPLICATIONS FOR AGRICULTURAL GROWTH AND INDUSTRIALIZATION STATEGIES