Agriculture can drive African growth under right policy reforms
Farmers and economists both know that to make things grow you need the right resources and the right conditions. With a uniquely diverse climate and more than half the world’s uncultivated arable land, Africa has the natural resources to drive an agricultural boom. But we have not yet created the right economic conditions.
Africa has the potential to feed not just itself but the world. Yet we spend $68bn a year on food imports and this is increasing. Two-thirds of our population depend on agriculture for their livelihood, but the sector’s share of GDP is dwindling. We are failing to capitalise on our advantages, because our policies do not look at farms as businesses.
At the African Centre for Economic Transformation, we think it doesn’t have to be this way. Our new report calls for a programme of deliberate and co-ordinated reforms to turn agriculture into the engine for growth and economic transformation. This would bring widespread benefits beyond the sector.
AFRICA HAS THE POTENTIAL TO FEED NOT JUST ITSELF BUT THE WORLD. YET WE SPEND $68BN A YEAR ON FOOD IMPORTS AND THIS IS INCREASING
A key area for change is land tenure. Historically, communal land titles in Africa have allowed everyone in a village to farm without needing ownership rights. This is a good thing for equity. But if people don’t own their land, there is little incentive for them to improve it for commercial use and banks won’t lend them money to do so.
For Africa to realise its potential, we need policies that define and protect communal rights while opening land up to the market. Countries like Botswana and Ethiopia have led the way by clarifying land rental and titling rights for communities. Others must look for ways to balance the incentives in their own contexts.
Governments must also support farmers to boost productivity. The package of improved seeds, fertilisers and education known as the “green revolution” has already been successfully adapted to local conditions in Ghana and Uganda. But it is often unaffordable or unavailable to the poor smallholders who make up eight out of 10 African farmers. We must help these people get access.
New technologies, such as drones and satellite data, can help farmers tackle logistical challenges but smart, sustained investment is needed to make them work in context. Finance also needs attention: credit and insurance are vital to manage risk and promote entrepreneurship, yet only a third of Africans have bank accounts, with women and those in rural areas among the most disenfranchised.
Important lessons can be borrowed from elsewhere. Transformative growth in East Asian economies was built on booming populations that drove manufacturing. Most African countries share this advantage, but the export markets that fuelled Asian growth are dwindling. So we must make and sell more within the African continent.
A farming boom will create demand for tools, marketing and other industries, which in turn employ young people. Farmers with clearer rights to land will produce more goods and invest in better technology, freeing up labour for marketing or manufacturing. Increased productivity will drive down food prices and reliance on imports. If we give them more rights, women — who make up the majority of our farmers — can be both actors in and beneficiaries of this transformation.
Ultimately, this is not about farming. It is about how African countries can unlock their broader economic potential and enhance equality and participation in society, by modernising and mechanising agriculture.
There are significant risks to manage. Agricultural reforms will be self-defeating if they come at the expense of the environment or social equality. The private sector is an influential player and it brings ample opportunities to modernise. But we need careful regulation to ensure the benefits of growth are shared and sustainable, and rights are protected.
The reforms will also need to be made in full view of the challenges posed by climate change. Science shows that parts of our continent will be hit hard by changing weather and falling crop yields, but there are opportunities too. Smart investment and innovative policymaking are needed to take these into account.
Africa could be a major player in meeting a booming global food demand. Our farms produce less than other countries because of our policies, not their potential. With intelligent reforms, we can turn farms into businesses that feed our populations and bolster other industries. The benefits could be huge, but we must act now.
Amoako, a former executive secretary of the UN Economic Commission for Africa, is founder of ACET