2. MAIN TOPICS
1 KEY MESSAGES
2
3 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA
4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE
5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTY
GROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICA
FROM GROWTH RECOVERY
TO ECONOMIC TRANSFORMATION IN AFRICA
3. MAIN TOPICS
1 KEY MESSAGES
2
3 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA
4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE
5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTY
GROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICA
FROM GROWTH RECOVERY
TO ECONOMIC TRANSFORMATION IN AFRICA
4. IFPRI/Badiane
WHERE 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 POVERTY
KEY MESSAGES
5. MAIN TOPICS
1 KEY MESSAGES
2
3 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA
4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE
5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTY
GROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICA
FROM GROWTH RECOVERY
TO ECONOMIC TRANSFORMATION IN AFRICA
6. THE ECONOMIC GROWTH PROCESS
COUNTRIES BECOME RICH BY PRODUCING MORE OUTPUT PER GIVEN WORKER
THIS INVOLVES PRODUCING MORE OF THE SAME GOOD
AND MORE IMPORTANTLY, PRODUCING A LARGER BASKET OF HIGHER VALUE
GOODS
COUNTRIES ALSO BECOME RICH OVER TIME
STARTING FROM AN AGRICULTURAL AND RURAL BASE
MOVING TO AN URBAN AND INDUSTRIAL BASE
7. THE ECONOMIC GROWTH PROCESS
THE DOUBLE CHALLENGE OF MANAGING THE GROWTH PROCESS
RAISING PRODUCTIVITY AGRICULTURE AND THE RURAL ECONOMY
WHILE DIVERSIFYING INTO HIGHER VALUE GOODS OUTSIDE OF AGRICULTURE
DETERMINING FACTORS
HUMAN AND PHYSICAL ASSETS
INSTITUTIONAL AND TECHNOLOGICAL RESOURCES
POLICY AND COORDINATION CAPACITIES
8. AFRICA IS UNDERGOING ITS
LONGEST PERIOD OF SUSTAINED GROWTH SINCE THE 1960S
-8
-6
-4
-2
0
2
4
6
8
10
12
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
AnnualGrowthRate(%)
GDP, annual growth rate (%)
Agriculture, hunting, forestry, fishing, annual growth rate (%) Source: UN National Accounts, 2013
9. IFPRI/Badiane
THE GROWTH IS ACCELERATING
AS WELL AS SPREADING GEOGRAPHICALLY
SOURCE: IFPRI / Badiane and Ulimwengu
Data from national account s / UN database: http://data.un.org/Explorer.aspx?d=SNAAMA
10. MAIN TOPICS
1 KEY MESSAGES
2 GROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICA
3 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA
4 STRATEGIES FOR THE AGRICULTURAL SECTOR
5 STRATEGIES FOR THE INDUSTRIAL SECTOR
FROM GROWTH RECOVERY
TO ECONOMIC TRANSFORMATION IN AFRICA
11. Per-capita Income
Share of agriculture
in total labor force
Share of agriculture
in total GDP
low
High
Agricultural GDP
per worker
Agricultural
GDP
low high
AGRICULTURE IN THE ECONOMIC TRANSFORMATION PROCESS
Based on Timmer (2009)
12. Share of agriculture
in total labor force
Share of agriculture
in total GDP
AGRICULTURE IN THE ECONOMIC TRANSFORMATION PROCESS
Time Axis
0
100
Ag GDP Share = Ag labor share
Ag incomes = Non Ag incomes
13. AGRICULTURE IN THE ECONOMIC TRANSFORMATION PROCESS
0
100
CONVERGENCE: [Ag GDP Share – Ag labor share] => 0
15. TRENDS IN LABOR PRODUCTIVITY AND EMPLOYMENT IN AFRICA 1980 - 2008
-
20
40
60
80
100
120
140
198019821984198619881990199219941996199820002002200420062008
Index:1980=100
LABOR PRODUCTIVITY
-
10
20
30
40
50
60
70
80
198019821984198619881990199219941996199820002002200420062008
Share(%)
LABOR EMPLOYMENT SHARE
LABOR PRODUCTIVITY HAS
STAGNATED IN AGRICULTURE
AND DECLINED SHARPLY IN NON
AGRICULTURAL SECTOR, DRIVEN
PRIMARILY BY LOW-PRODUCTIVITY
SERVICES
EMPLOYMENT HAS FALLEN
SLIGHTLY IN AGRICULTURE AND
INCREASED RAPIDLY IN NON
AGRICULTURAL SECTOR, AGAIN
DRIVEN BY SERVICES AND LESS BY
INDUSTRY
Agriculture
Non-agriculture
Source: FAOSTAT 2011
18. MAIN TOPICS
1 KEY MESSAGES
2
3 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA
4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE
5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTY
GROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICA
FROM GROWTH RECOVERY
TO ECONOMIC TRANSFORMATION IN AFRICA
19. AGRICULTURAL SECTOR UNDERPERFORMANCE AND STRUCTURAL CHANGE
THE SHARE OF THE AGRICULTURAL SECTOR IN OVERALL GDP IS LOWER IN NEARLY ALL AFRICAN
COUNTRIES THAN WOULD HAVE BEEN EXPECTED BASED ON THE LEVEL OF PER CAPITA
OBSERVED AVERAGE SHARES OVER THE LAST 30 YEARS ARE AROUND 30%, NEARLY 20 PERCFENTAGE
POINTS BELOW WHAT WOULD BE EXPECTED BASED ON COUNTRIES’ LEVEL OF DEVELOPMENT
Observed Ag GDP Share Expected Ag GDP Share
Relationship based on sample of 210 countries over 1960-2008 period
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
AgriculturalshareofGDP(%)
20. -
5
10
15
20
25
30
35
40
45
East Asia & Pacific Latin America &
Caribbean
Middle East &
North Africa
South Asia Sub-Saharan Africa
Share(%)
Average Share of Agriculture in GDP
1965-1980 1980-1995 1995-2008
CONLUSION NO. 2
RELATIVELY UNDERSIZED HIGHER-PRODUCTIVITY AGRICULTURAL SECTOR
HAS IMPACTED NEGATIVELY ON TRANSFORMATION
$1,758 $4,767 $1,909 $682 $618
SOURCE: IFPRI/Badiane & Makombe based on data from WDI, 2009
Pc GDP in 2008
21. OVERSIZED SERVICE SECTOR AND STRUCTURAL CHANGE IN AFRICA
ON THE OTHER HAND, THE SHARE OF THE SERVICES SECTOR IN GDP IS MUCH LARGER IN THE MAJORITY OF
COUNTRIES COMPARED WHAT WOULD HAVE BEEN EXPECTED BASED ON THE LEVEL PER CAPITA INCOMES
THE RELATIVELY BIGGER SERVICES SECTOR IS LINKED TO THE UNDERSIZED AGRICULTURAL SECTOR
IT IS A REFLECTION OF “NEGATIVE DIVERSIFICATION” WITH LABOR LEAVING THE UNDERPERFOMING
AGRICULTURAL SECTOR TO MOVE INTO THE EQUALLY UNPRODUCTIVE OR LESS PRODUCTIVE SERVICES SECTOR
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
ServicesshareofGDP(%)
Observed Ag GDP Share Expected Ag GDP Share
Relationship based on sample of 210 countries over 1960-2008 period
22. -
10
20
30
40
50
60
70
East Asia & Pacific Latin America &
Caribbean
Middle East & North
Africa
South Asia Sub-Saharan Africa
Share(%)
Average Share of Services in GDP
1965-1980 1980-1995 1995-2008SOURCE: IFPRI/Badiane & Makombe
Data from WDI, 2009
CONCLUSION NO. 3
RELATIVELY OVERSIZED LOWER-PRODUCTIVITY SERVICES SECTOR
HAS IMPACTED NEGATIVELY ON TRANSFORMATION
$1,758 $4,767 $1,909 $682 $618
23. MAIN TOPICS
1 KEY MESSAGES
2
3 PACE AND PATTERNS OF STRUCTURAL TRANSFORMATION IN AFRICA
4 STRUTURAL TRANSFORMATION AND SECTORAL IMBALANCE
5 STRUCTURAL TRANSFORMATION, COMPARATIVE ADVANTAGE, AND POVERTY
GROWTH PROCESS AND BRIEF OVERVIEW OF RECENT PERFORMANCE IN AFRICA
FROM GROWTH RECOVERY
TO ECONOMIC TRANSFORMATION IN AFRICA
24. CONCLUSION NO. 4
THE UNDERPERFORMING AGRICULTURAL SECTOR IS NOT JUST DELAYING TRANSFORMATION
IT IS ALSO CONTRIBUTING TO HIGHER POVERTY RATES
ANG
BN
BTN
BF
CMN
CAR
CHD
DRC
CG
CI
GBA
GHN
GNE
GNEB
KYA
LST
LBR
MDG
MI
MTA
MZQ
NBA
NGR
NGRA
RWD
SNG
SL
SA
SZL
TZN
TG
UGDZB
Note: y_hat=43.363*-0.534*x, over 1990-2005
20406080
100
-60 -50 -40 -30 -20 -10 0
Observed-expected Ag GDP share