PP from EIARD meeting in Helsinki 26.10.2015.

1. Development Prospects and Challenges in Africa – the role of
agriculture and foreign aid
European Initiative for Agricultural Research for Development
(AIARD)
Helsinki, Finland 26 October 2015
By Finn Tarp

2. Introduction
• The Economist (11 May 2000): Hopeless Africa
• The Independent (15 July 2009): Africa – the lost continent
• The Economist (3 December 2011): The hopeful continent –
Africa rising
• A recent Afrobarometer survey suggests that ‘despite high
reported growth rates, lived poverty at the grassroots remains
little changed’ (Dulani et al. 2013); and others even question
the growth revival referring to poor data
• A personal note + the WIDER perspective: from colonialism to
independence, to stabilization and structural adjustment in
the 1980s, and the turn around from 1995

3. Growth and Poverty in Sub-Saharan Africa
• I rely on both my personal experience and on insights from:
• UNU-WIDER’s Growth and Poverty Project in Sub-Saharan Africa carried out between 2012-14
– known as the GAPP project
• GAPP implemented 16 carefully designed country case studies among the 24 most populous
countries in Africa (covering almost 75% of the population of the region) and 9 of the top 10
countries – and country studies were conducted by analysts with expert knowledge of the
context and strengths and weaknesses of the available data
• Focus on monetary and non-monetary indicators of well-being
• Key message: There is a lot to celebtate in African development – yet key challenges remain
(by 2013 GDP/capita was only 7.7% higher than in 1974)
• Forthcoming in 2016 as an Oxford University Press volume edited by Channing Arndt, Andy
McKay and Finn Tarp

4. The African Turn-Around

5. 16 Country Cases

6. Household Consumption – Doubled Since 1995
0
500
1000
1500
2000
2500
Europe & Central Asia (developing only) East Asia & Pacific (developing only)
Sub-Saharan Africa (developing only) Latin America & Caribbean (developing only)
Household final consumption expenditure (constant 2005 billion US$)

7. Child Mortality – Nearly Halved Since 1995
15
35
55
75
95
115
135
155
175
195
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Europe & Central Asia (developing only) East Asia & Pacific (developing only)
Middle East & North Africa (developing only) Sub-Saharan Africa (developing only)
Latin America & Caribbean (developing only)
Mortality rate, under-5 (per 1,000 live births)

8. Child Malnutrition Reduced
0
5
10
15
20
25
30
Europe & Central Asia
(developing only)
East Asia & Pacific (developing
only)
Middle East & North Africa
(developing only)
Sub-Saharan Africa (developing
only)
Latin America & Caribbean
(developing only)
1990 1995 2000 2005 2013
Malnutrition (weight for age) prevalence (% of children under 5)

9. Access to Clean Water in Rural Areas – Improved
Significantly since 1990…
30
40
50
60
70
80
90
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Europe & Central Asia (developing only) East Asia & Pacific (developing only) Middle East & North Africa (developing only)
Sub-Saharan Africa (developing only) Latin America & Caribbean (developing only)
Improved water source, rural (% of rural population with access)

10. Girls’ Secondary School Enrolment – Doubled Since
1995
20
30
40
50
60
70
80
90
100
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Europe & Central Asia (developing only) East Asia & Pacific (developing only) Middle East & North Africa (developing only)
Sub-Saharan Africa (developing only) Latin America & Caribbean (developing only)
School enrolment, secondary, female (% gross)

11. Mobile Phone Subscriptions
0
20
40
60
80
100
120
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Europe & Central Asia (developing only) East Asia & Pacific (developing only) Middle East & North Africa (developing only)
Sub-Saharan Africa (developing only) Latin America & Caribbean (developing only)
Mobile cellular subscriptions (per 100 people)

12. Democracy

13. Poverty Headcount
0
10
20
30
40
50
60
70
80
1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2010 2011
Europe & Central Asia (developing only) East Asia & Pacific (developing only) Middle East & North Africa (developing only)
Sub-Saharan Africa (developing only) Latin America & Caribbean (developing only)
Poverty headcount ratio at $1.25 a day (PPP) (% of population)

14. Commodity Price Dependency

15. Terms of Trade

16. Summing-Up So Far
• Progress in SSA has been markedly better than most expected ten or fifteen years
ago
• Relative to previous periods, macroeconomic management has improved
significantly; a new generation of policy makers and business leaders have entered
the scene; and important gains have been registered in four key areas:
– overall political stability (more democratic and accountable governments)
– rates of economic growth
– a large array of non-monetary poverty indicators; and
– monetary poverty as measured by household consumption
• Commodity prices played a role; yet there is a lot more going on: durable factors of
physical, human and institutional accumulation are at play

17. Summing-Up for 16 Countries: Four Categories
• Relatively rapid economic growth and corresponding poverty reduction:
Ethiopia, Ghana, Malawi, Rwanda, and Uganda
• Relatively rapid economic growth and limited poverty reduction:
Burkina Faso, Mozambique, Nigeria, Tanzania, and Zambia
• Uninspiring or negative economic growth with corresponding stagnation
or increasing poverty: Cameroon, Côte d’Ivoire, Kenya, Madagascar, and
South Africa
• Low-information countries: DRC

18. Outstanding Challenges and a Thorny Dilemma
• Demographic projections (2015-2050): from 7.3 to 9.7 billion, and Africa’s
population is set to double to 2.5 billion (bigger than both China and India and
Nigeria > US)
• Structural transformation slow
• Jobs and employment creation lagging
• Agriculture and industrialization constrained
• A long walk to prosperity: recall T x G = 69
• In other words: a lot more growth in Africa is needed, which with present
technology will imply a significant contribution to CO2 emissions (Africa uses a lot of
”dirty” coal)
• But the world has changed: Global emission constraints

19. Launching a New Climate Regime
• Henry ‘Jake’ Jacoby’s presentation of the EPPA (Emissions Prediction &
Policy Analysis Model) emissions estimates at UNU-WIDER’s 30th
Anniversary Conference on 19 September 2015
• See:
http://www1.wider.unu.edu/30thanniversary/sites/default/files/IGA/Jac
oby.pdf

21. UN High-Level Panel report on the post-2015
development agenda
• Calls for:
• “..A quantum leap forward in economic opportunities
and a profound economic transformation to end
extreme poverty and improve livelihoods…”
• How can aid help?
• Aid to social sectors builds human capital BUT being educated
& healthy is not enough

22. What will happen to aid allocation post-2015?
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Social Sectors
Economic
Infrastructure
Production Sectors
Environment,
Gender, Rural-Urban
Development

23. MDGs & Post-2015
• Aid helps economic growth (overall). BUT:
• To achieve the HLP ‘quantum leap’ it must support:
• Aid to agriculture – slumped & still too low (esp. crop research). IFAD & AfDB
‘going to scale’
• Structural transformation – industrial policy & don’t just focus on SMEs (“East
Asia’s donors do it better?”)
• Creation of ‘good jobs’ – donors pay too little attention to employment –
fragmented livelihood projects
• Gender equity at scale – rhetoric, but too-small-scale
• Infrastructure – use aid to leverage private capital (e.g. AfDB Africa50 fund). Note
climate change challenge

24. Nearly concluded:
building bridges

25. Remittances help build this:

26. But we also need to build this:

27. Climate change could overwhelm development

28. Conclusion
• Should Africa care about the global emissions issues? And if so how?
• We must begin discuss the inherent trade-offs, and identify the opportunities
for concrete win-win solutions to the challenge of sustainable development in
both its socio-economic and environmetal dimensions
• And yes, I believe it can be done: after all, Africa is rich in renewable energy. A
breakthorugh will however require a massive effort to develop and harvest
this potential in the interest of the African people and indeed the rest of the
world. Leadership is required now by those with decision making authority
and the necessary investment funds
• A final word: Praia de Tofo – Inhambane, Mozambique, 30 years ago

29. www.wider.unu.edu
Helsinki, Finland