Globalization has played a key role in the sustained economic growth seen in Africa south of the Sahara in recent years, according to IFPRI’s 2018 Global Food Policy Report. However, rising protectionism and anti-globalization in some developed countries could pose a threat to further economic growth and development in the region.
In 2017, Africa south of the Sahara as a whole experienced GDP growth of 2.6 percent, up from the 1.4 percent growth seen in 2016. This increase stemmed largely from recovering global oil and agricultural commodity prices, as the continent depends heavily on exports of these products. The region’s agricultural sector has also grown steadily in recent years; agricultural value-added grew by 4.7 per year from 2008 to 2016, compared to 4.2 percent growth from 2003 to 2008. While this overall agricultural growth remains below the goal of 6 percent set out by the Comprehensive Africa Agriculture Development Programme (CAADP), 13 African countries had surpassed that target by 2016.
The region also saw small progress on the implementation of CAADP as a whole and on the Malabo Declaration goals in 2017. According to the first biennial review report from CAADP members, less than half (20 countries) of the 47 reporting countries were on track to achieve the Malabo commitments by 2025. Overall, 47 out of 55 African countries submitted country reports as part of this continent-wide review report, which was presented to the African Union Commission Specialized Technical Committee in October 2017 in preparation for its presentation to the African Union Assembly. In 2016 and 2017, many African countries also drafted new national plans for investment in agriculture and food security.
In particular, there are a few regional trends that are not positive. For example, growth in public agricultural expenditure for Africa overall has fallen steadily since the global economic crisis of 2008-2009; so far, only five countries have met the CAADP target of 10 percent growth in public expenditure on agriculture. The report notes that this decrease in agricultural spending growth represents a serious problem, threatening the region’s progress in poverty reduction and food security.
Similarly, hunger and poverty remain significant roadblocks to development. Over the past two decades, Africa south of the Sahara has experienced declines in the rates of poverty, hunger, and child malnutrition; several countries have seen the prevalence of underweight children fall by more than 50 percent since 2003. However, the 2017 Global Hunger Index still ranked hunger levels in most African countries as “serious” or “alarming”, while the region as a whole received a ranking of “serious”. Ongoing conflict and climate change-related weather shocks have compounded these challenges in many areas of the region, threatening further progress toward food and nutrition security and economic growth.
Foreign direct investment (FDI) flows to Africa fell by 3 percent in 2016, but FDI levels also vary widely from country to country. Angola, Egypt, Ethiopia, Ghana, and Nigeria receive over half of the total FDI directed to the continent. FDI to the Democratic Republic of the Congo fell by 28 percent following a decline in global metals prices; on the other hand, FDI to Ethiopia rose by 46 percent due to increased investment in manufacturing and infrastructure.
The region also has yet to reverse recent declines in exports and imports, which were driven mostly by still low (although recovering) global oil and commodity prices, slower growth in China and other major trading partners, and drought throughout parts of Africa. Overall exports from Africa south of the Sahara fell by 12 percent in 2016.
Continued conflict and weather shocks in several areas of the region has also resulted in high rates of forced migration and severe food insecurity. Famine or near-famine conditions appeared in South Sudan, Nigeria, and Somalia in 2017; in addition, parts of Kenya, Ethiopia, and the Democratic Republic of the Congo experienced major food security crises. These emergency conditions, and subsequent humanitarian aid needs, are expected to continue into 2018, and migration from affected areas will continue to put pressure on neighboring countries.
To address all of these challenges head-on, African policymakers will need to focus on policy reforms in a number of areas, the report suggests. The region’s continued economic growth, while slated to reach 3.2 percent in 2018, remains vulnerable to rising debt and debt-servicing costs, slowing FDI, and still-low global prices for important commodities such as cocoa. The report emphasizes that African policymakers will need to increase agricultural spending growth and investments in order to boost agricultural productivity, as well as continue to improve macroeconomic and sectoral policies to drive further economic growth. Specifically, countries need to improve their management of debt, establish more conducive business environments to stimulate investment from the private sector, and attract increased FDI. In terms of FDI, the report cites investment promotion agencies that have named agriculture, food and beverages, and utilities as the most promising industries for attracting FDI to the region. All of these policies could help ensure that the region remains attractive for investors, even in the face of rising anti-globalization.
Finally, policymakers and development partners need to design development programs that are more inclusive and agricultural programs that are more nutrition-sensitive in order to meet the Malabo Declaration goals by 2025.