In a bid to increase output and diversify economies in Africa, the World Bank has suggested a raft of measures to be put in place, according to a new study.
The African Competitiveness Report 2015, compiled under the theme “Transforming Africa’s Economies,” which combines detailed data from the World Economic Forum’s Global Competitiveness Index (GCI), made key findings including the need to improve agricultural productivity, leverage services and tap global value chains (GVCs).
The data also highlights the low and stagnating productivity across all sectors, partly as a result of ongoing weakness in the basic drivers of competitiveness such as institutions, infrastructure, health and education. According to the survey, while agriculture provides an important source of income for the majority of African citizens, productivity remains too low and based on small-scale subsistence production.
“Improvements such as better leveraging of technology (both information and communications technologies, as well as development of high-yield crops and better irrigation), more clearly defined land property rights and promotion of rights and opportunities for women, who represent a significant share of the agricultural workforce on the continent, are all needed to address this,” it said.
Botswana is one of the countries in Africa where agricultural productivity has slowed, leading to many people moving from rural areas to urban centres. The country’s agricultural sector contributes a paltry two percent of GDP, though it provides for up to 50 percent of the country’s food needs. This is a far cry from what it used to be at independence when it was the mainstay of the economy before the discovery of diamonds. It is suggested that up to 80 percent of Botswana’s annual import bill comprises of food products.
The World Bank added that enabling greater market access for small-scale farmers would help ensure inclusiveness, while development of regional value chains would serve as a useful stepping stone, enabling them to improve production and marketing processes, and ultimately to meet the quality standards of world markets. The report also suggested that a further development of low-cost, high-quality services will help countries participate in local, regional and global value chains. It will also encourage policy-makers to promote services development as part of a wider growth agenda.
“Greater participation in global and regional value chains can accelerate African economic transformation through the gains associated with enhanced productivity and the development of new activities,” said the report.
“However, gains from GVC participation are not automatic and require a broad set of policies, with a particular focus on trade facilitation, investment, transport infrastructure and access to finance. Many of these policy areas have economy-wide benefits beyond GVC integration.”
Steve Kayizzi-Mugerwa, Ag. Vice President at the African Development Bank said business cannot continue as usual in Africa’s agriculture sector.
“It is imperative that productivity be significantly boosted through tailored agriculture research, harnessing ICT and strengthening linkages between small-scale farmers and commercial producers while better integrating them into regional and global value chains”.