Not Everyone, Everything Can Produce Food




The 2018 Africa’s Pulse report, the World Bank Group’s bi-annual publication on the macroeconomic situation of the sub-Saharan African region, estimates economic growth will reach 2.7pc this year.

The authors of the publication believe that it is about to get even better, with economic growth of the sub-Saharan region peaking at 3.3pc next year and 3.6pc in 2020. What has held back growth in the past couple of years in the World Bank’s estimation are richer African nations such as South Africa, Angola and Nigeria recording slower growth. This would probably change as the former two countries will benefit from increasing oil prices.

Many agree that sub-Saharan Africa’s economic growth could be higher and more sustainable. There are endless theories for why this has yet to happen since the second half of the last century. Africa Pulse’s latest report believes that it has to do with misallocation of resources such as labour, capital and land. They have a point.

There is a curious sector that should best exemplify this, agriculture.

Scientists assure us that the domestication of animals and plants was so effective that humans decided to keep it for millennia. While until recently many farm and raise animals, a few could take the time to specialise in other areas, such as building houses, healing, shoe-making, and later, splitting the atom, landing on the moon and inventing the internet.

But as Ethiopians can attest, this is not an easy undertaking. Producing food in bulk has never been our forte. With the nation estimated to have experienced droughts once or twice a decade for the last couple of centuries, memories of biblical famines haunt our collective memory.

Perhaps for this reason, successive governments work to ensure the populace is fed by controlling access to agricultural inputs, land and effectively having the say over capital and  labour in the sector.

This has perhaps curtailed famines but has nevertheless devastated the efficient production and distribution of agricultural products. Selected statistics from around the world can better illuminate this.

In 1991, 43pc of the world’s labour force was employed in agriculture compared to 26pc last year, according to the World Bank. In East Asia and the Pacific, just over half of the population worked in agriculture in 1991 compared to around a fifth of them last year. For sub-Saharan Africa, in the same period, employment in the sector fell from a high of 67pc to 57pc, still the highest for any region in the world.

The case of Ethiopia is even more depressing. It is estimated that 90pc of the nation’s labour force was employed in the sector in 1991 and 68pc in 2017. This, despite the agricultural sector  contributing just 36pc to the gross domestic product (GDP). About 38pc of the population was employed in agriculture last year in neighbouring Kenya, and 50pc were in the United States in the 1870s.

It still gets worse. The labour force is unable to produce enough food to feed itself and the rest of the population tasked with specialising in other fields. While fewer than two percent of Americans are engaged in agriculture, they still manage to feed themselves, their fellow citizens and produce enough surplus for export. Ethiopia, on the other hand, falls short in food production to such an extent that the nation imports millions of tonnes of wheat.

The same misallocation of resources haunts Ethiopia’s entire economy. When labour, capital and land are not put to good use, inefficiency arrives, followed by waste and delays and finally supply constraints. Such shortages lasting for decades in the face of an ever-growing population and expectations, coupled with bad leadership, have made this nation a hot-bed of socio-economic and political nuisances.

Supply constraints do not have a quick fix, and any quick windfall, such as receipts from privatisation or newfound mineral resources, are bound to make matters worse as there are no strong institutions to protect against state capture.

The most effective means of realising growth, or at the very least, being able to produce an adequate amount of food, is to allow supply and demand to allocate resources while instituting mechanisms of effectively regulating markets.

If only the government can limit itself to providing public goods and services such as electricity and education, the market would be able to feed the populace on its own and create a competitive economy.



By Christian Tesfaye
Christian Tesfaye (christian.tesfaye@addisfortune.net) is Fortune’sOp-Ed Editor whose interests run amok in the directions of both print and audiovisual storytelling.

Published on Oct 20,2018 [ Vol 19 ,No 964]


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