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Urbanization, Agriculture and Rural Transformation in Africa

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CGIAR Research Program on Policies, Institutions, and Markets Workshop on Rural Transformation in the 21st Century (Vancouver, BC – 28 July 2018, 30th International Conference of Agricultural Economists). Presentation by Paul Dorosh and James Thurlow (IFPRI).

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Urbanization, Agriculture and Rural Transformation in Africa

  1. 1. Urbanization, Agriculture and Rural Transformation in Africa Paul Dorosh and James Thurlow (IFPRI) PIM Workshop on Rural Transformation in the 21st Century ICAE Vancouver, 28 July 2018
  2. 2. Poverty & Population Growth 0 20 40 60 80 100 1990 1996 2002 2008 2013 2020 2025 2030 2035 2040 2045 2050 Shareofglobalpoorpopulation(%) East Asia & Pacific South Asia Sub- Saharan Africa Source: Global projections from Thurlow, Dorosh & Davies (2017) using historical (1993-2013) GDP growth rates (WDI), estimated poverty-growth elasticities (WDI and POVCALNET), and projected populations (UNDESA) Fact 1: Global poverty is falling and is concentrating in Africa (and in harder to reach places)
  3. 3. Population Growth & Urbanization Source: Thurlow, Dorosh & Davies (2017) using UNDESA population and urbanization projections Fact 2: High population growth in Africa means fast growing rural populations, despite urbanization -1 0 1 2 3 0 20 40 60 80 100 Annualpopulationgrowthrate(%) Urban population share (%) East Asia & Pacific South Asia Sub-Saharan Africa Latin America & Caribbean 2040s 2010s 1950s 1980s
  4. 4. Urbanization & Economic Growth Source: Thurlow, Dorosh & Davies (2017) using UNDESA urbanization rates and WDI GDP estimates Fact 3: Urbanization in Africa is tracking East Asia’s pathway, but at a much slower rate of economic growth 0 2 4 6 8 10 12 14 16 0 20 40 60 80 100 GDPpercapita(constant2011$1000PPP) Urban population share (%) East Asia & Pacific Latin America & Caribbean Sub-Saharan Africa South Asia 2015 1990 2000
  5. 5. Growth & Structural Change Source: Thurlow, Dorosh & Davies (2017) using ILO employment and WDI GDP data. Fact 4: African workers are leaving agriculture more slowly than other in countries when they were at similar development stages (i.e., LIC to LMIC) Uganda Mozambique Ethiopia Angola Chad Ghana Nigeria Tanzania Rwanda Lesotho Kenya SSA The Gambia China Indonesia South KoreaMalaysia Philippines Thailand India Brazil 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 0 2 4 6 8 10 Annualincreaseinnon-agricultural employmentshare(%-point) Average annual GDP growth rate (%)
  6. 6. Agriculture-Food Systems Source: Thurlow et al. (2018) database of Agri-Food System GDP estimates (AgGDP+) Fact 5: African agriculture’s downstream linkages are sizable, extend into urban centers, and are helping drive economic growth and structural change 43% 29% 29% 30% 29% 56% 40% 46% 43% 39% Ethiopia (2011) Kenya (2013) Malawi (2014) Rwanda (2015) Tanzania (2016) EAST AFRICA Food services Trade & transport Inputs Processing Agriculture Share of national GDP (%)
  7. 7. Downstream Growth & Poverty Source: Dorosh & Thurlow (2018) Beyond Agriculture Versus Non-Agriculture. World Development Fact 6: Downstream sectors also have strong growth-poverty linkages (and these sectors are growing 2-3x faster than agriculture) Poverty-Growth Elasticities %-point change in poverty headcount rate given 1% increase in GDP 0.80 1.02 0.94 0.650.67 1.04 0.48 0.89 0.59 0.61 0.61 0.64 Malawi Tanzania Uganda Zambia Agriculture Non-agriculture Agro-Processing Trade & Transport
  8. 8. Rethinking Our Approach Priority 1: Reverse typical approach of addressing rural poverty by focusing on the rural smallholder – we should instead work backwards from market opportunities How can poor farmers raise their productivity? How can marketing constraints be overcome? How are supply chains and marketing systems changing? 1 2 3 From a “farmer-first” approach… (focuses on farm productivity & investments, distance to markets, etc.) What market opportunities exist? What is required to supply this market? Can poor farmers profitably participate in the value chain? 1 2 3 …to a “market-first” approach (focuses on final products, supply competitiveness, product quality, market & price policies, etc.)
  9. 9. Aligning Rural & Urban Policies Priority 2: Promoting food system (and rural) transformation requires greater coordination between agricultural and urban policies (and research) LIC LMIC UMIC 0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 Shareofnonagriculturalemploymentin ruralareas(%) Share of agricultural employment in urban areas (%) Low-income countries (LIC) Lower middle-income countries (LMIC) Upper middle-income countries (UMIC) Income group averages Source: Dorosh and Thurlow (forthcoming)
  10. 10. Differentiating Opportunities & Priorities City Town Peri-urban Remote rural Town Peri-rural 20% SS-Africa’s rural population <1hrs from city of 50k+ 35% SS-Africa’s rural population >3hrs from city of 50k+ 25% SS-Africa’s rural population 1-3hrs from city of 50k+ Priority 3: Different strategies are needed for linking big cities and smaller towns to and peri-urban and more remote rural areas

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