Many African countries have experienced unprecedented rates of economic growth since the turn of the century. During this period, some of these countries graduated to “lower-middle-income” status, and excitement grew about the rise of Africa’s expanding middle class. Yet their economic transformations display characteristics that could constrain future growth. Patterns of urbanisation without industrialisation, rapid growth of low-productivity jobs in the informal economy, and a neglected agriculture sector with increased need for imported foods are all areas for concern as Africa continues to develop.
Using Ghana as a case study, a new book, titled Ghana’s Economic and Agricultural Transformation: Past Performance and Future Prospects (download here), integrates economic and political analysis to explore the challenges and opportunities of Africa’s transformation. The book examines Ghana’s overall economic performance since the major Structural Adjustment Programme in the mid-1980s and provides an in-depth empirical analysis of performance of the broader economy and the agricultural sector over the past four decades. The book explains why Ghana’s economy, despite more than 30 years of continuous growth, has not transformed more substantially, why the agricultural sector has not played a greater role outside of cocoa exports, and what must be done to achieve a successful transformation in the future.
Prevailing economic opinion suggests that few African countries can hope to become major manufacturing hubs like those in Asia. One of the more promising options for generating productive jobs lies in transforming agriculture, because the agriculture sector remains the dominant employer in Africa and serves a rapidly growing market at both country and continental levels. Africa’s demand for food is growing fast and is projected to more than double by 2050, driven by population growth, rising incomes, rapid urbanisation, shifts in national diets toward greater consumption of higher-value fresh and processed foods, and more open intraregional trade policies. Moreover, agricultural growth can help leverage rapid growth in the larger agri-food system, including agro-processing and trading.
Exploiting this potential will require a major shift from traditional to more productive, market-driven farming practices as well as the development of agricultural value chains and the broader agri-food system. This is an important growth opportunity for Africa, but requires that African governments be willing to invest in agriculture and create the enabling environment for a market- and private-sector-led transformation. Success clearly depends on the economic factors driving different options, domestic political forces, donors’ influence, and institutional capabilities. Unfortunately, with few exceptions, in recent decades national agricultural policies on the continent have ranged from half-hearted to detrimental, despite enormous opportunities to grow the sector through available productivity-enhancing technologies. As such, evaluating the future prospects for agricultural transformation requires consideration of the political-economy dynamics shaping the feasibility of available choices. Continue reading…