what investments are needed to reach the sadc-risdp and caadp goals in southern africa?
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"What investments are needed to reach the SADC-RISDP and CAADP goals in Southern Africa?" presentation by Babatunde Omilola at the Southern Africa Regional Conference on Agriculture. Gaborone, Botswana, December 8-9, 2008.TRANSCRIPT
IFPRI
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 5/6/2009
What Investments are needed to reach the SADC-RISDP and
CAADP goals in Southern Africa?
Babatunde Omilola
The Southern Africa Regional Conference on Agriculture
Theme: Agriculture-led Development for Southern Africa: Strategic
Investment Priorities for Halving Hunger and Poverty by 2015
Grand Palm Hotel, Gaborone, Botswana
December 8-9, 2008
IFPRI
Page 2
Introduction: Importance of knowing resource flows and
investments required to meet key SADC-RISDP and CAADP Goals
African governments and their development
partners need to know:
» how to sufficiently invest their available resources in key
productive sectors such as agriculture, education, health,
transport, communications, energy, etc to achieve desired
goals
» How and under what conditions should resources be
allocated in order to have maximum impact
» In agriculture, that is closely related to key RISDP and
CAADP Goals: which types of sub-sectors of agriculture
should investments target (e.g., research, extension,
subsidies, credit, infrastructure such as irrigation, feeder
roads, etc)
IFPRI
Introduction-Contd.
Impact projections of agricultural growth, food security
and poverty reduction should be based on strategic analysis
regarding investment expenditures and priorities to answer
the following:
» Could greater or better distributed outcomes and impacts be obtained by reconfiguring investment portfolios?
» What are the different types of investments that can lead to greater and more sustainable growth as well as greater and better distributed outcomes and impacts?
» Based on these, what new targets must be set and the levels of investments?
» Which types of sub-sectors of agriculture should investments target?
IFPRI
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Outline of Presentation
1. Key SADC-RISDP and
CAADP GoalsPart 1
Part 22. Recent Trends of Public
Investments in Agriculture in
the SADC region
Part 3 3. Investment Requirements for
Achieving key SADC-RISDP
and CAADP Goals
IFPRI
INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE
Part 1
Key SADC-RISDP and
CAADP Goals
CAADP-RISDP, CAADP and MDG 1 have key shared goals and
targets for addressing poverty, food insecurity and hunger issues
IFPRI
Key SADC-RISDP Goals
Achieving a GDP growth of at least 7% a year and halve the proportion
of the population living on less than US$1 per day between 1990 and
2015.
Doubling cropland under irrigation from 3.5% to 7% as a percentage
of the total by 2015.
Increasing fertilizer consumption from 44.6 kilograms per hectare
((kg/ha) of arable land to 65 kg/ha of arable land by 2015 (world
average is 98.8 kg/ha).
Increasing cereal yield in kg/ha hectare from an average of 1,392 to
2,000 (world average) by 2015
Doubling the adoption rate of proven technologies such as improved
seed varieties, management of water and land by 2015
Increasing the daily per capita dietary energy and protein intake from
2,160 kilocalories (kcal) to 2,700 kcal and 49g to 68g respectively by
2015.
Halving the proportion of people who suffer from hunger by 2015.
IFPRI
Key CAADP Goals and Principles
» CAADP has revived interest in African agriculture
» Strategic framework for agriculture-led growth to
attain MDG 1
» Dedication of at least 10 percent of public
expenditure of each African country to agriculture
and rural development by 2008
» Attainment of an average annual growth rate of 6
percent in agriculture.
» Four main pillars to guide public investments
IFPRI
Page 8
Linkage of Public Investment to the key SADC-RISDP
and CAADP Goal of Poverty Reduction
Agricultural Production
Other Exogenous Variables
-Population Growth
-Agroecological Conditions
-Urban Growth
-Macro and Trade Policies
-Asset (Land) Distribution
Poverty
Food Prices
Wages Nonfarm Employment/migration
Finance
-Political
-Economic
-Governance
Total Government Spending
Allocation: Education/Health, Infrastructure/technology, Targeted Programs
Spending Outcome: Education/Health, Infrastructure, Technology
Efficacy
-Governance
Non-farm Production
Targeted Programs
IFPRI
Part 2Recent Trends of Public
Investments in Agriculture in
Southern Africa
IFPRI
Current Status of Achieving key Goal of Poverty Reduction
IFPRI
Average Annual Change in Poverty Rates in Southern Africa
IFPRI
Current Level of Public Investment in Agriculture in Southern Africa
IFPRI
Agricultural Spending in LDCs
1994 1998 2004 1994 1998 2004 1994 1998 2004
West Africa 1.5 1.7 3.2 3.0 2.9 3.4 2.1 1.8 3.1
Southern Africa 4.2 4.8 4.9 2.7 2.6 2.4 14.3 13.9 15.1
SSA 7.4 7.6 10.1 3.2 2.8 2.9 5.5 4.7 5.7
Africa 12.7 13.2 17.5 3.7 3.5 3.7 6.9 6.0 7.2
Asia 122.38 141.61 220.6 10.1 7.72 5.53 8.43 8.14 10.8
LAC 19.19 17.68 23.7 3.41 3.25 2.82 11.02 9.72 11.8
Agriculture as a
share of AgGDP, %
Agriculture
Expenditure, 2000
international dollars,
Agriculture as a
share of Total
Expenditure, %
IFPRI
Public Spending for Agriculture in Africa
IFPRI
Share of Agricultural ODA in Total ODA to SSA
Share of Agricultural ODA in Total ODA, All Donors
(1980-2005)
0
5
10
15
20
25
30
1980 1985 1990 1995 2000 2005
Pe
rce
nt
(%)
Source: OECD database, 2007
IFPRI
Share of ODA spending in total agricultural spending
Aid Dependency: ODA Spending as % of Total Spending for Ag
0% 20% 40% 60% 80% 100%
Niger
Mozambique
Rwanda
Uganda
Tanzania
Ghana
Guinea
Chad
Senegal
Guinea-Bissau
Malawi
Mali
Gambia, The
Burundi
Cameroon
Madagascar
Ethiopia
Zambia
Benin
Kenya
Burkina Faso
Cote d'Ivoire
Zimbabwe
Nigeria
Source: OECD database and IFPRI public expenditures database (work in progress)
IFPRI
Composition of Agricultural Spending: The Case of Zambia
Personnel Emoluments
20%
Operational funds
11%
Irrigation Development
3%
Infrastructure
2%
Food Security Pack &
EDRP
12%
Food Reserve Agency
Maize Marketing
15%
Fertilizer Support Program
37%Source: ReSAKSS-SA, MACO (Zambia), MSU (Zambia)
Example of Zambia’s 2005 Budget
IFPRI
Part 3Investment Requirements
for Achieving key SADC-
RISDP and CAADP Goals
Evidence based on agricultural growth-poverty and growth-expenditure elasticities to
estimate investments required
IFPRI
Page 19
Returns to Investments in Sub-Saharan Africa
Elasticity (% change in TFP per 1%
change in spending)
Marginal returns(% change in TFP per 1
billion US$ increase in spending)
Agriculture 0.0152 9.0
Transport and communication
0.0094 6.0
Benin, Nin-Pratt and Radriamamonjy, 2007
IFPRI
Page 20
Agricultural Growth and Investment Requirements for Achieving Key SADC-RISDP and CAADP Goals in Africa
Elasticity (% change in TFP per 1%
change in spending)
Marginal returns(% change in TFP per 1
billion US$ increase in spending)
Agriculture 0.0152 9.0
Transport and communication
0.0094 6.0
Source: Fan et al., 2008
IFPRI
Concluding Remarks
Higher level of investments in long-term impact areas such as
infrastructure (roads and transportation), extension, agricultural R&D,
market information systems, postharvest handling facilities and
agricultural inputs
Most countries need to increase agricultural spending by 20-30 percent
per year
Required investments should be based on past progress in achieving key
SADC-RISDP and CAADP Goals and the role of agriculture in the
overall economy
Increasing investment in agriculture is not enough, how increased
investments in agriculture is allocated to different subsectors is very
crucial. Hence, better systems for tracking investments are critical
IFPRI
Concluding Remarks
Although overall ODA spending on African agriculture has risen, most
of it are allocated to emergency humanitarian aid
The agricultural sector is under-funded, and is lagging far behind its
Asian and Latin American counterparts
Sequencing and targeting of available investments and donor
coordination are critical, and enabling institutional environment is
important
Although evidence indicate that investments in agricultural research and
extension, rural infrastructure and rural education have the greatest
impact on achieving key RISDP and CAADP Goals, investment
prioritization should be based on the particular context of each country.
This is because there is no common definition of agricultural spending.
IFPRI
Thank You