Investment in Agriculture is Critical in the Fight against Poverty & Inequality in Africa

By Mohamed Aw-Dahir*

ADDIS ABEBA – There are a number of significant changes that are happening in Africa, the most important being that it is a continent with some of the fastest-growing economies. Five of the world’s fastest-growing economies are in Africa. This has resulted in increased wealth in a segment of the population, with its attendant shift in food consumption patterns.

Africa’s population is also growing fast. For instance, between 2015 and 2050, the populations of 28 African countries are estimated to have more than doubled. According to UN Department of Economic and Social Affairs (UNDESA), 2015 report, the population of ten African countries namely: Angola, Burundi, Democratic Republic of Congo, Malawi, Mali, Niger, Somalia, Uganda, United Republic of Tanzania and Zambia, are projected to increase by at least five-fold by 2100.

An increase in population growth in Africa, especially the youth segment, presents an opportunity to unleash the potential of the sizeable and growing demographic; it, however, also means more mouths to feed.

Combining the effects of consumption pattern changes and the high population means that the agriculture sector must respond by not only producing more food, but also food that appeals to a wealthier society.

African countries will likely continue to experience lower agricultural yields due to the impact of climate change, encroachment of agricultural lands – particularly crop and rangelands and, biodiversity loss. In order to ensure sustainability of the agriculture sector, increased and quality investments need to be channeled into the sector.

Evidences supported by data and analysis from the Food and Agriculture Organization of the United Nations (FAO) shows that agriculture plays an important role in economic development and poverty reduction as it creates employment opportunities and contributes to household income and food availability.

A majority of Africa’s poor population lives in rural areas. Increasing investments into the agriculture sector can, therefore, play a critical role in poverty alleviation, especially rural poverty, since the majority of rural poor depend on agricultural activities for their livelihoods. Further, agriculture is key not only to on-farm activities – it largely supports off-farm activities that contribute directly and indirectly to increased household incomes, hence the reduction of poverty and inequality.

The agriculture sector and its associated services will, therefore, remain as the most important pillar for food security and nutrition. The sector will also remain a critical engine for inclusive economic growth and transformation in Africa. Various studies by FAO and partners confirm that the sector employs more than 70 percent of the labor force especially in rural areas where the majority of the poor live. While, currently, 55 percent of the world’s population lives in urban areas, Africa’s population remains mostly in rural areas, with 57 percent of its rural population living in areas where agriculture is the mainstay of the economy.

In addition to the rapidly changing population dynamics, socio-economic inequality is also an increasing trend in Africa, meaning that more and more rural communities are likely to be left behind in the continent’s quest to achieve the 2030 Sustainable Development Goals (SDGs). Research shows that where there is less poverty and inequality, the benefits of socio-economic growth reach wider sectors of the population. Some African countries that have recently experienced high levels of economic growth also have the highest levels of inequality.

A recent study by Oxfam reported that, although some of the social indicators have improved and poverty levels in Africa have reduced by 15 percent for the last ten years, inequality reached a critical and alarming level. The study further revealed that Africa’s wealth is increasingly concentrated within a few wealthy people in the continent, where the richest three billionaires own about 40 percent of the total wealth of the entire continent.

In Kenya, for instance, less than 0.1 percent of the population (8,300 people) own more wealth than the bottom 99.9 percent (more than 44 million people), while the richest 10 percent of people earn on average 23 times more than the poorest 10 percent. Moreover, 75 percent of the financial wealth of the richest people is kept outside the continent. When such large financial resources from the continent are invested outside of the continent, tax revenues that could have accrued from such wealth and investments is lost. In addition, revenue that could otherwise be invested in sectors such as agriculture is also lost.

GDP growth as a measure of success in Africa does not capture the reality of poverty and inequality, neither is it a reflection of the status of food security and nutrition at the household level. In Ethiopia, for instance, despite a high economic growth rate and reduced poverty levels from over 40 percent to 23 percent for the last ten years, inequality has actually increased. Inequality undermines social stability, social cohesion leads to conflict, civil insecurity, migration and extreme violence.

Given the very high number of the labor force in rural areas estimated to be engaged in the agriculture sector, increasing investment in productivity and in value chains to expand agribusiness must remain a priority to create income for rural households. Other important factors according to FAO reports include strengthening capacity for climate change mitigation and adaptation, social protection and resilience building, knowledge management, infrastructure development and youth involvement in agriculture.

Despite its important role, public investment in the agriculture sector is, however, still low in many parts of the continent. For instance, according to the 2017 African Union Biennium Review Report on the progress toward the Malabo commitment of allocating at least 10 percent of annual public expenditure to agriculture, only ten member states have met the target for the period 2015-2016.

Critical areas that require immediate attention include intensification of farming in order to increase yields. This can be achieved through mechanization and transformation of agricultural systems. In addition, improving national and interregional agricultural commodity trade and creating market access particularly for rural women and youth will contribute to household income diversification; it will also create employment opportunities across the agriculture value chains and contribute to poverty reduction.

Further, investing in infrastructure, giving access to agriculture financing and creating an enabling policy and regulatory environment will ensure that there is increased agricultural productivity and that rural populations have a means to improved livelihoods.

To fight poverty and reduce inequality, Africa should increase investment in agriculture and protect land rights, because agriculture employs the bulk of the population in the continent.

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*Mohamed Aw-Dahir is a senior officer at FAO Sub-regional Office for Eastern Africa. 

Image Caption: A farmer in the Ethiopian highlands outside the historic village of Lalibela [Photo File/EPA]

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