This growth has delivered clear benefits: a rising middle class; an increase in school enrollment, especially for female children; improving infrastructural systems; and improved access to information, thanks to the global communications revolution. But despite this encouraging growth, poverty remains entrenched. Indeed, the number of Africans living in extreme poverty increased by more than 100 million between 1990 and 2012. Further, recent economic growth has generated few jobs for youth, including the hundreds of thousands graduating from college across the continent every year. Clearly, the growth experienced in the last couple of decades is inadequate.
Most economies in Africa are still based on the production and export of unprocessed agricultural products, minerals, and crude oil with little to no manufacturing or processing. Various organizations have called for African economies to move from focusing on economic growth to more fundamental structural economic change. The United Nations Economic Commission for Africa (UNECA) and the African Center for Economic Transformation (ACET), among others, argue persuasively that policymakers in Africa should pursue a pattern of growth that delivers shared benefits to the masses. Economic transformation is now a key component of long-term strategies endorsed by the African Union, African Development Bank, and UNECA.
Economic transformation is a process that leads to an effectively implemented set of policies pursued by a government with the clear goal of promoting diversified production, export competitiveness, productivity increases, and technology upgrades; thus essentially moving from low-output activities to high-productivity activities within sectors.1 It also promotes human well-being, through higher incomes, well-rounded skills, and private-sector employment, particularly among Africa’s youth population.
Most African economies are based on agriculture, a sector that remains ripe for transformation. An estimated 65 percent of the labor force in Sub-Saharan Africa is employed in the agricultural sector, and the sector contributes about 32 percent to the region’s GDP. Further, agriculture is an important driver of growth in developing countries and can have twice the effect in reducing poverty as growth in other sectors, as it is the single largest source of income and employment on the continent. Increasing agricultural productivity is a powerful way to raise incomes. Aside from providing more food, it will also improve the distribution of incomes and increase manufacturing, which will enhance labor migration to industry as well as other sectors of the economy. Agriculture can therefore be a powerful driver for economic transformation.
There are calls to bring the Agricultural Revolution in a suitably modified form to Sub-Saharan Africa. But there is no need to reinvent the wheel. Many lessons can be learned from the Asian Green Revolution in the 1960s, which contributed to a substantial reduction in poverty and the launch of broader economic transformations in many Asian countries. Africa missed the opportunity for a green revolution due to many factors including low technology adaptation, worsening market failures, low agricultural investment, and insufficient institutional support, especially in the financial and insurance sectors. But the opportunity for agricultural change and economic transformation remains. A supporting economic, institutional, and policy environment should be at the heart of an African agricultural revolution. This includes the need for markets that can handle the production boom; the need to educate farmers about new technology and ensure that they have access to inputs and a fair return on their investment; the need to diversify exports; the need to link production to agro-industry; and the need to ensure smallholder farmers are not left out of this revolution.