How Much Do African States Spend on Agriculture?
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Most African countries have not reached the Malabo target of investing 10 per cent of their national budgets in agriculture. But focusing only on the Malabo target disguises the fact that public investment in agriculture has nevertheless risen significantly. To make African agriculture more resilient to shocks and improve food security and agri-food systems, more public and private investment is urgently needed.
When African Heads of State and Government met in Malabo, Equatorial Guinea, in June 2014, they made the historic commitment to spend ten per cent of their national budgets on agriculture. In adopting the?Malabo Declaration ,?the African leaders supported further far-reaching goals, such as:
The Malabo Declaration was made within the framework of the broader Comprehensive Africa Agriculture Development Programme (CAADP). CAADP calls for an agriculture-led development that eliminates hunger, reduces poverty and food insecurity and facilitates higher sustainable economic growth and development.
The CAADP and Malabo initiatives are important milestones in the process of agriculture-led economic growth in Africa after the structural economic adjustment period. It was an innovative process that raised the profile of agriculture and encouraged better policies and significant investments on agriculture as the key driver of economic growth and prosperity.
Overall, the progress in implementing CAADP has been commendable and most CAADP indicators have trended positively since 2003. Compared with the rest of the world, Africa has the fastest-growing agriculture sector since 2000. Research shows that the agricultural value-added index, measuring processes that increase the value of primary agricultural commodities, more than doubled between 2000 and 2020. However, overall economic growth and the reduction of inequality, poverty and undernourishment have decelerated while child malnutrition remains relatively high on the African continent.?
Far less positive has been the achievement of the Malabo target on allocating 10 per cent of national budgets to agriculture. The allocation of public finances to agriculture has been far below the Malabo target. Nevertheless, focusing only on the Malabo commitment distorts reality because African countries have made important progress in investing and improving their agriculture.
Malabo Targets have been missed
The African Union (AU) and its partners have put in place a rigorous monitoring, evaluation, and mutual accountability process. This includes the provision of data, policy analysis and capacity-strengthening support to enable AU Member States to achieve economic transformation and shared prosperity. An interactive website and a flagship Annual Trends and Outlook Report track progress made on achieving core CAADP indicators. The CAADP Biennial Review (BR) reviews country, regional and continental progress toward meeting the 2014 Malabo Declaration commitments.
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The 3rd CAADP?Biennial Review ?on the progress achieved of the Malabo Declaration commitments was published in 2022. It underlined that the African “continent is still not on track to meet the CAADAP/Malabo Commitment by 2025”.
Out of the 51 AU Member States, only one country, namely Rwanda, is on track to achieving the Malabo commitments. Only four countries achieved the Malabo target of allocating 10 per cent of public spending to agriculture (Burundi, DR Congo, Ethiopia and Mali). Four member States (Egypt, Eswatini, Seychelles and Zambia) were on track, which is an improvement since no country was on track in the last review period for this indicator.
Five countries (Burkina Faso, Ethiopia, Malawi and Niger) achieved consistently the 10 per cent target from 1980 to 2020. Countries like Benin, Mozambique, Senegal and Sierra Leone have achieved the Malabo target in some years only after the pledge was made.
Financial support for African agriculture
But the focus on the more general Malabo commitment hides that Africa has mobilised important – though not sufficient – funds in support of its agricultural sector.?Data? shows that public expenditure on agriculture (PAE) has nearly doubled in Africa, increasing from $10.7 billion in 2000 to $17 billion in 2021.
The share of PAE in total public expenditure declined from a 3.9 per cent annual average share in 2000-2008 to 2.7 per cent and later to 2.4 per cent in 2020. We should not forget that public investments in agriculture remained low because countries had to equally meet large investment demands in infrastructure and social services following more than two decades of economic stagnation up until the late 1990s.
The agriculture value added has doubled, increasing from $200 billion to $425 billion. It shows that Africa is allocating smaller amounts in PAE relative to the size of the continent’s agriculture sector. However, the value added for agriculture, based on an increase in agricultural land, labour and food processing productivity, has increased in many countries and some have started reinvesting an important share of it back into the agriculture sector in support of agriculture investment plans. With this trend, there is an opportunity to significantly boost agricultural investment by returning more of the wealth created in agriculture back to the sector.
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