Booming Africa 2

Following on from the earlier blog Booming Africa we read that the Africa Progress Panel found that African countries were growing consistently faster than almost any other region, with booming exports and more foreign investment. Ghana was the fastest growing economy in the world in 2011 and Ethiopia expanded more quickly than China in the five years to 2009.

 But it warned that there was a contrast between a growing yet still relatively small middle class and the Africans left behind. Although seven out of 10 people in the region live in countries that have averaged growth of more than 4% a year for the past decade, Annan's study found that almost half of Africans were still living on incomes below the internationally accepted poverty benchmark of $1.25 a day. The "trickle-down" pattern of economic growth was leaving too many people in destitution.

 "The deep, persistent and enduring inequalities in evidence across Africa have consequences," the report said. "They weaken the bonds of trust and solidarity that hold societies together. Over the long run, they will undermine economic growth, productivity and the development of markets."

Former UN secretary general Kofi Annan added: "It cannot be said often enough, that overall progress remains too slow and too uneven; that too many Africans remain caught in downward spirals of poverty, insecurity and marginalisation; that too few people benefit from the continent's growth trend and rising geo-strategic importance; that too much of Africa's enormous resource wealth remains in the hands of narrow elites and, increasingly, foreign investors without being turned into tangible benefits for its people."

From deficit to surplus

Kofi Annan cites Africa as answer to global food crisis. The number of hungry people in the world is set to top one billion again this year as rising food prices push millions more into poverty, the former secretary general of the United Nations warned. One in three Africans is chronically hungry, according to the UN, despite $3 billion being spent on food aid for the continent every year. About 70% of Africans are involved in agriculture, but almost 250 million people–a quarter of the population–are undernourished. That number has risen 100 million in the past 20 years as food production has fallen 10%, compared to an increase of 145% for the rest of the world.

“Africa is the continent which has perhaps the greatest opportunities to help find solutions to global food insecurity,” he said. “Even within existing cultivated land, a doubling of cereal yields would turn Africa into a major food surplus region.”

In the 1960s the continent was actually a net exporter of food. Fifty years later Africa imports around a quarter of its food at a cost of $30 billion a year.

Marketing Poverty

From the fraternal blog Reasons to be Impossible

So according to the FAO:
Per capita food production has declined in Africa for the past 30 years and farm productivity in Africa is just one-quarter the global average. Today, more than 200 million people are chronically hungry in the region, and 33 million children under age five are malnourished.and we hear from the BBC, Kofi Annan:
Attending the Rome conference in his new role as the chair of Agra, the Alliance for a Green Revolution in Africa, he said the African farmer was the only farmer in the world that still took all the risks, often operating without financial support, expertise or safety nets. AGRA makes an interesting point:
Markets can play an important role in improving the incomes of poor farmers. However, markets in Africa are generally poorly organised and volatile, and often inaccessible to small-scale farmers. Also lacking is the market information that farmers need to negotiate good prices for their produce. Even such basic information as current wholesale and retail prices is rarely available. Therefore, building efficient and well-integrated input markets (through which farmers can buy supplies), and output markets (enabling farmers to sell their harvest) is key to encouraging farmers’ adoption of sustainable agricultural technologies.

All of which is to highlight two things - firstly, that most of the world does not play by market rules when it comes to food - food security is national security, and security of food prices stabilises labour markets (food soars, we strike).

Secondly, the state of Africa's markets shows that people left to themselves do not just create functional markets.

Now, I seem to recall reading one African post-liberation leader, discussing how traditional African nmarkets were inherently socialist (I can't remember who) - but the fact of the matter is that the sharing of information is a necessary prelude to socialism - if, as I heard on the radio last night, after a bit of investment Malawi has trebled its food output, there is reason to hope that this programme will work, and the horror of starvation may be obliterated. but, mark you, it isn't sponanteous markets that will be doing the work, but conscious investment, and co-operation. The capital markets have failed in Africa.