African growth tragedy,Investigate sources and determinants of agricultural growth in Africa.

1. DISENTANGLING THE SOURCES OF
GROWTH.
Land, Labor, Fertilizer, Tractor, Research, Extension…… what are their
exact contributions to agricultural growth in Africa:
Lesson from macro-data.
Guy B. Nkamleu

2. African growth tragedy
• Africa’s growth performance continues to
challenge our understanding.
– With the African population expected to grow at 2.8% per annum, simply
preventing an increase in the number of Africa’s absolute poor will
require an annual growth of at least 5%, almost twice the level achieved
since 1973.
• Growth in agriculture, particularly in Africa, has
been strongly tied to overall economic growth
and poverty reduction
– Recent studies show that for African countries, a 10% increase in
agricultural yield leads to a 9% decrease in the percentage of those
living on less than US $1.00 a day.

3. African growth tragedy
• Why some countries achieve rapid economic
growth and some other countries experience
stagnation and even economic regression ?
– This has led researchers to examine the main sources of growth for
different countries and regions of the world.
• Efforts to understand that should be to first,
explore the driving forces of economic growth…….
In the case of Africa, attention should focus on
sources and driving forces of agricultural growth.

4. • AIMS: Investigate sources and
determinants of agricultural growth in
Africa.
– The focus is on quantifying:
• how much growth in agricultural output is associated
with growth in physical capital,
• how much is due to technology,
• how much is due to productivity improvement,
• how much is due to institutional change and other
factors.

5. Potential sources of Ag. Growth
Land
Chemical inputs
What
drive
me ?
Labor Quantity
Labor Quality Extension
Agricultura
l Growth
Tractors
Livestock
Technology
Random factors

6. Data Used
Panel Data (1970-2000) on the agricultural sector of each
country…. (FAOSTAT).
These data included:
• value of the Agricultural production,
• agricultural labor,
• number of tractors in use,
• quantity of fertilizer used,
• agricultural land,
• number of livestock in sheep-equivalent.

7. Data: Sampled Countries
• Top 26 African agricultural producers (except South Africa Republic)
Morocco Tunisia
Algeria
Egypt
Mali
Niger
Senegal Chad
Burkina Sudan
Faso
Guinea Nigeria
Ivory Ghana
coast Cameroon
Uganda
Kenya Rwanda
DR Congo
Tanzania Burundi
Malawi
Angola
Madagascar
Mozambique
Zimbabwe

8. Visualisation
Y(Output)
Frontier 2
P4 A1
Frontier 1
P2
B
P1 A
X (Input)
X1 X2

9. break down the growth rate in neo-classical production function
• We first consider the following Solow neo-classical production function:
ln Qit f ( xitj , t; ) it i 1 ,.....,n
t 1 ,.....,T
j 1 ,.....,J
• Growth accounting analysis generally assumes that the residual of this production
function captures total factor productivity (TFP) growth. The break down of the growth
rate of the aggregate output is given by.
Q it itj x itj TFPit
j
Xt Xt 1
• Where dots over variables indicate rate of change Xt
Xt 1
f ( x, t ; )
• and αitj is the output elasticity of input j, for country i in j
xj
time t.

10. TFP derivation: Malmquist Index Method
t
d 0 yt , xt
VRS is assumed B
d 0s ys , xs
Pure Technical
Efficiency
t
d 0 yt , xt
CRS is assumed A
d 0s ys , xs
Efficiency
Growth
Scale
Efficiency
Agricultural Productivity
Growth Growth A
B
12
Technical
t s s
d y t , xt
0 d y t , xt d y s , x s
0 0 Growth 12
s
d y s , xs t t
d y t , xt d y s , x s d 0s yt , xt d 0s y s , x s
0 0 0
t t
d 0 y t , xt d 0 y s , x s

11. Four distance functions to compute
t 1
[d 0 ( xt , y t )] Max , ,
subjet to y it Yt 0 • Distance from production point of t, to technology in period t
xit Xt 0'
0,
[d 0 1 ( xt 1 , y t 1 )]
t 1
Max , ,
subjet to y i ,t 1 Yt 1 0 • Distance from production point of t+1, to technology in period t+1
x i ,t 1 Xt 1 0'
0,
t 1
[d 0 ( xt 1 , y t 1 )] Max , ,
subjet to y i ,t 1 Yt 0 • Distance from production point of t+1 to technology in period t
x i ,t 1 Xt 0'
0,
[d 0 1 ( xt , y t )]
t 1
Max , ,
subjet to y it Yt 1 0 • Distance from production point of t to technology in period t+1
xit Xt 1 0'
0,

12. Yearly agricultural growth by decade in Africa
(%)
4 3.53
3.5 3.03
2.71
3
2.5
2 1.43
1.5
1
0.5
0
1971-80 1981-90 1991-00 All (1971-00)

13. Yearly agricultural growth by region in Africa, 1971-00
(%)
3.45
3.5 3.24
3 2.53
2.5 2.04
2 1.68
1.5
1
0.5
0
Northern West Central East Southern

14. Growth decomposition
Agricultural growth
Physical Unaccounted
Productivity factors
factors
Conflict,
Land, Climate,
Labor, Technical Technological Natural
Fertilizer, efficiency change disaster
Tractors, (extension) (research) ……
….

15. Agricultural growth contributors, 1971-00 (%)
98
100
80 67
60
40
20
0
-20
-40
-60
-65
-80
Physical factors Productivity Unaccounted factors

16. Agricultural growth contributors by decade (%)
150
100
50
0
-50
-100 Physical factors Total factor productivity Unaccounted factors
1971-80 113.88 -45.11 31.23
1981-90 48.33 86.14 -34.47
1991-00 92.04 91.36 -83.39

17. Agricultural growth contributors by region (%)
300
200
100
0
-100
-200
-300
-400 Northern Western Central East Southern
Physical factors 66.92 48.53 262.2 270.58 176.27
Total factor productivity 64.27 42.73 66.43 136.61 48.6
Unaccounted factors -31.18 8.74 -228.64 -307.2 -124.87

18. Contribution of physical inputs in the agricultural
growth, 1971-00 (%)
60 51
50
40
30 21 25
20
10 4
0 -4
-10
Land Labor Tractor Fertilizer Livestock

19. Contribution of physical inputs in the agricultural
growth by region, 1971-00 (%)
200
150
100
Land
Labor
Tractor
50 Fertilizer
0
-50
Northern West Central East Southern

20. Implications for R4D
98
100
80 67
60
40
20
0
-20
-40
-60
-65
-80
Physical factors Productivity Unaccounted factors
Technology
or
Efficiency ?
Technical Technological
efficiency change
(research/extension) (research)

21. Technology Gap and Productivity difference in
African Agriculture
Central Africa frontier
Meta frontier
Westtern Africa frontier
Output Y YC.A
Eastern Africa frontier
Northern Africa frontier
Southern Africa frontier
YW.A
YN.A
YE.A
YS.A
Input, x