Public Spending Priorities for Africa Agriculture Productivity Growth

23 March 2017. WASHINGTON. Enhancing the productivity of agriculture is vital for Sub-Saharan Africa’s economic future and is one of the most important tools to end extreme poverty and boost shared prosperity in the region. How governments choose to spend public resources has significant development impact in this regard.

The new Africa regional flagship study, Reaping Richer Returns: Public Spending Priorities for Africa Agriculture Productivity Growth, explores how effective, efficient and climate resilient public spending in and for agriculture can be the foundation for transformation and reducing poverty in Sub-Saharan African countries.

According to the study, the challenge is not only that agricultural public spending in Sub-Saharan Africa lags behind other developing regions but its impact is vitiated by programs and transfers that tend to benefit the better off, with insignificant gains for agriculture, or for the poor.

“Sub-Saharan African countries tend to underfund high-return public good investments related to technology generation and adoption, strengthening markets, and rural infrastructure. The study recommends areas where African governments can prioritize spending to reap richer returns, including implementing smart subsidies, boosting spending on research and development and eliminating barriers that impede rapid uptake of new technologies, and investing in market access and land governance.” Aparajita Goyal, World Bank senior economist and task team leader of the Africa regional flagship study.

Conditions are ripe for boosting the productivity of African agriculture, the study says. African regional markets are growing rapidly, driven by population, urbanization, and income growth, and are forecast to reach a trillion dollars by 2030. Prospects are also promising on the supply side, according to the study, since Africa’s potential for agricultural prosperity is enhanced by an abundance of vital components.

“To make a significant dent on poverty, enhancing the productivity and competitiveness of African agriculture must become a priority. Reforming the design and implementation of public spending programs while rebalancing in favor of high-return public goods could produce significant gains.”

The study uses the successes of African and other developing countries around the world to provide lessons for African agriculture, the quality of public spending and the efficiency of resource use. For example, input promotion during high agricultural productivity periods in Asian and South American countries addressed systemic constraints to productivity through integrated investments in improved technologies, extension services, water and soil management, and market linkages.

Related:

Interview with Aparajita Goyal, Economist, Agricultural and Environment Services, Worldbank