Over the past two decades, Africa’s overall GDP has doubled, and GDP per capita has grown by more than one-third. In Africa south of the Sahara, gross national income per capita increased from 1.3 percent in 1994-2004 to 2.3 percent in 2004-2014. Despite this impressive progress, however, it has still not been enough to lift millions of Africans out of poverty. What has driven this period of strong, rapid growth, and how can it be sustained and expanded in a long-term, inclusive way? The 2014 ReSAKSS Annual Trends and Outlook Report, Beyond a Middle Income Africa: Transforming African Economies for Sustained Growth with Rising Employment and Incomes , identifies several macroeconomic and structural factors behind Africa’s recent growth and examines potential future trends, opportunities, and challenges in the region.
Moderate inflation levels, improved governance and reduced corruption, increased life expectancy, increased education levels, and more foreign direct investment, savings, and development assistance have all contributed to Africa’s recent growth. Across the continent, countries have started enacting economic policies that support the private sector and political policies that are more open and transparent; in addition, more and more attention is being paid to proper management of natural resources and the revenue flows that stem from those resources. All of these improvements have led to the strongest growth seen in the region post-independence.
Using IFPRI’s International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT) , the report forecasts that Africa’s GDP per capita will continue in the coming decades and that most of the region’s countries that are currently low income will progress to middle-income status by 2030. All African countries except for Eritrea are expected to achieve middle-income status by 2050. The IMPACT model is a partial equilibrium, multi-market economic model that simulates national and international agricultural markets and includes links to other water, climate, and crop models.
Agriculture will play a key role in this continued growth, as recognized by the 2014 Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods . According to the ReSAKSS report’s estimates, cereal production in the region will grow at about 2 percent annually until 2030 and at just over 1 percent annually between 2030 and 2050; this means an overall continental increase of 91 percent between now and 2050. The region’s production of fruits, vegetables, oilseeds, pulses, and roots and tubers is also each expected to more than double by 2050.
As per capita incomes and population both continue to rise, so, too, will people’s food needs. Demand for cereals, oilseeds, and roots and tubers is expected to more than double by 2050; demand for pulses, fruits, and vegetables will more than triple in the same period.
Changing demographics will also impact people’s food demands. It is expected that 50 percent of Africa’s population will live in urban areas by 2020 and that the middle class will continue to rise. These changes are already impacting many Africans’ diets, with processed food becoming a more and more significant share of people’s food purchases, even among rural poor populations. Rather than relying just on staple grains to meet their caloric needs, people are diversifying their diets to include fruits and vegetables, dairy products, meat, fish, and pulses.
Since domestic food value chains contribute more to meeting domestic demand than do imports, these food value chains will need to adapt to increased demand. Small- and medium-scale actors are already becoming more involved in mid-stream and downstream segments of the food processing, wholesale, retail, and transport segments of the value chain. Since these post-farm gate segments account for up to 70 percent of urban consumers’ food costs, they are particularly important for both food security for a growing urban population and economic development for value chain actors.
The report estimates that food supply chains in Africa have grown by almost six times over the past 40 years; this growth will continue to increase non-farm employment opportunities in the region. In order to ensure these opportunities, however, countries will need to invest in rural infrastructure, including markets, roads, and energy supplies.