Mega-trendsandtheFutureofAfricanEconomies

T.S.Jayne,Lulama Traub,FelixYeboah,MiluMuyanga,JordanChamberlin

PresentationtoMSUFoundationBoardofDirectors, MichiganStateUniversity

August 15,2017

Sixmajortrends

Trend#1

The“YouthBulge”

LoomingemploymentchallengeinSSA

4-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%

[0-4]

[5-9]

[10-14]

[15-19]

[20-24]

[25-29]

[30-34]

[35-39]

[40-44]

[45-49]

[50-54]

[55-59]

[60-64]

[65-69]

[70-74]

[75-79]

[80+]

Agepyramid:ruralSSA,2015 Male

Female

62% < 25 years old

5Source:UN2013

China

India

OtherSouthAsia

South-EastAsia

SSA

0

100

200

300

400

500

600

700

800

900

1000

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

TotalRuralPopulation(millions)

Trend#2

Peopleenteringlaborforce>wagejobsbeingcreated

MostAfricanswillremainreliantonfarming!

Jobsbysector,Sub-SaharanAfrica

7Source: World Bank (Filmer and Fox), 2014

Milli

on p

eopl

e

Jobsbysector,Sub-SaharanAfrica

8Source: World Bank (Filmer and Fox), 2014

Milli

on p

eopl

e

010

000

2000

030

000

Tota

l per

sons

em

ploy

ed (i

n th

ousa

nds)

1960 1970 1980 1990 2000 2010Year

Agriculture MiningManufacturing Public sectorBusiness/trade Others

Ethiopia

Employmenttrends:Ethiopia

Source:GroningenGrowthandDevelopmentCentre,2014

Employmenttrends:Tanzania0

5000

1000

015

000

Tota

l per

sons

em

ploy

ed (i

n th

ousa

nds)

1960 1970 1980 1990 2000 2010Year

Agriculture MiningManufacturing Public sectorBusiness/trade Others

Tanzania

Source:GGDC,2014

Employmenttrends:Senegal

050

010

0015

0020

0025

00To

tal p

erso

ns e

mpl

oyed

(in

thou

sand

s)

1960 1970 1980 1990 2000 2010Year

Agriculture MiningManufacturing Public sectorBusiness/trade Others

Senegal

Source:GGDC,2014

Employmenttrends:China0

1000

0020

0000

3000

0040

0000

Tota

l per

sons

em

ploy

ed (i

n th

ousa

nds)

1960 1970 1980 1990 2000 2010Year

Agriculture MiningManufacturing Public sectorBusiness/trade Others

China

Source:GGDC,2014

Employmenttrends:Ghana

010

0020

0030

0040

00To

tal p

erso

ns e

mpl

oyed

(in

thou

sand

s)

1960 1970 1980 1990 2000 2010Year

Agriculture MiningManufacturing Public sectorBusiness/trade Others

Ghana

Source:GGDC,2014

Trend#3

Foodconsumptionoutstrippingproduction

-80

-60

-40

-20

0

20

40

60

80B

illi

ons

of C

onst

ant $

2004

-06 Asia

AfricaOth. Dev.W. EuropeE. Europe&C. AsiaDev. OceaniaN. AmericaLat. Am.&Car.

TheAmericasareincreasinglytheworld’sfoodbasket

Source: FAOSTAT, thanks to Holger Mathey

Trend#4

MajorscrambleforAfrica’sarableland

Ninecountriescontain90%ofAfrica’sunutilizedarableland

18

Non-forestedunutilizedland1

(millionha)Proportion

CumulativeProportion

DRC 84.8 46.5% 46.5%Angola 18.9 10.4% 56.9%Congo 12.9 7.1% 63.9%Zambia 10.8 5.9% 69.9%Cameroon 10.5 5.7% 75.6%Mozambique 9.0 4.9% 80.5%CAR 7.1 3.9% 84.4%Gabon 6.5 3.6% 88.0%Sudan 5.8 3.2% 91.2%RestofAfrica(n=45) 8.8% 100.0%

• Meteoricriseofmedium-scalefarms

20

Table 2: Changes in farm structure among small- and medium-scale farmers in Zambia (2009 - 2012)

Landholding size Category

Number of farms % change

(2001-2012)

% of total farmland

Share of landholding

2001* 2009 2012 2009 2012 cultivated (2012)

0 – 2 ha 638,118 916,787 748,771 17.3% 24.1% 16.2% 91.2% 2 – 5 ha 159,039 366,628 418,544 163.2% 33.8% 31.7% 66.4% 5 – 10 ha 20,832 110,436 165,129 692.6% 20.3% 25.0% 49.5% 10 – 20 ha 2,352 35,898 53,454 2272.7% 12.3% 15.0% 36.7% 20 – 100 ha -- 9,030 13,839 53.3%** 9.5% 12.0% 10.9%

Total 820,341 1,438,779 1,399,737 70.6% 100.0% 100.0%

Source: Ministry of Agriculture Crop Forecast Surveys, 2009, 2012. *2001 figures are land under cultivation. ** Growth rate computed from 2009-2012 only. “na” means not available.

21

Table 2: Changes in farm structure among small- and medium-scale farmers in Zambia (2009 - 2012)

Landholding size Category

Number of farms % change

(2001-2012)

% of total farmland

Share of landholding

2001* 2009 2012 2009 2012 cultivated (2012)

0 – 2 ha 638,118 916,787 748,771 17.3% 24.1% 16.2% 91.2% 2 – 5 ha 159,039 366,628 418,544 163.2% 33.8% 31.7% 66.4% 5 – 10 ha 20,832 110,436 165,129 692.6% 20.3% 25.0% 49.5% 10 – 20 ha 2,352 35,898 53,454 2272.7% 12.3% 15.0% 36.7% 20 – 100 ha -- 9,030 13,839 53.3%** 9.5% 12.0% 10.9%

Total 820,341 1,438,779 1,399,737 70.6% 100.0% 100.0%

Source: Ministry of Agriculture Crop Forecast Surveys, 2009, 2012. *2001 figures are land under cultivation. ** Growth rate computed from 2009-2012 only. “na” means not available.

Participationinoutputmarkets

22Source:MACOCFS2000/1to2010/11andauthors’computations

Largestsmallholderfarms(9%)consistentlydoingbetter

MajorQuestion:

Israpidlandacquisitionbymedium/largefarmsforeclosingsmallholder-basedagricultural

development?

23

Six‘megatrends’:Recap

1. Youthbulge

2. Numberofyoungpeopleenteringlaborforceoutstrippinggrowthinwagejobsà risingimportanceof‘viable’agriculture

3. Foodconsumptionoutstrippingproduction

4. Risinglandscarcity

5. Landdegradation(notaddressedhere)

6. Climatechange(notaddressedhere)

Majormessage:

• Don’tacceptallthese“megatrends”asinevitable

– Sometrendsarehighlyuncertain,beingdependentonthetimepathofothertrends

– Policy caninfluencethetrajectoriesofsomeofthem/otherslessso

Stylizedfact:

Astylizedfactisoftenabroadgeneralizationthatsummarizessomecomplicatedstatisticalrelationship,whichalthoughessentiallytrue,mayhaveinaccuraciesinthedetail.

http://en.wikipedia.org/wiki/Stylized_fact