Is agriculture the right growth model for Africa?

By Danilo Desiderio

A paper from the Morocco-based Policy Centre for the New South explores which development model Africa should adopt to enhance its economic growth and catch up with industrialized nations. The author suggests that Africa can learn from countries that have recently modernized their economies.

But the question remains: which development model would be most appropriate? Should Africa follow the manufacturing-for-export model used by the East Asian Tigers (South Korea, Taiwan, Singapore, and Hong Kong) and China? Or would a service-based model, like India’s – starting with global call centers and expanding to software development and back-office services such as research and development (R&D), accounting, and HR – be more suitable?

According to the paper’s author, neither of these models is ideal. Africa, as a latecomer, cannot replicate the growth patterns of these regions.

Given current geopolitical conflicts, geoeconomic fragmentation, and Africa’s unique comparative advantages, needs, and constraints, the best path forward lies in modernizing its agricultural sector. By adding value to agricultural products, Africa could boost exports beyond the continent.

With 45 percent of the world’s arable land and 60 percent of uncultivated arable land, agriculture is a critical sector for Africa. Currently, agriculture contributes 15 percent of Africa’s gross domestic product (GDP) and employs 49 percent of the workforce.

However, due to small farm sizes, low productivity, and an export-focused crop mix, Africa imports over 80 percent of its food, while nearly 60 percent of its population faces food insecurity at either a moderate or severe level.

The author argues that a growth strategy focused on agricultural modernization, including the fulfillment of the 2014 Malabo Declaration commitments, which call for African countries to allocate 10 percent of their annual budgets to agriculture, could significantly transform the continent’s economic future. Such a model would not only spur robust and sustainable growth but also tackle the root causes of low productivity – one of the key reasons for Africa’s persistent poverty.

There is no singular model that Africa should adopt; instead, each African nation should develop its own growth strategy tailored to its unique social, economic, and cultural context

It would also promote capital accumulation, better resource allocation, and improved use of human resources, potentially reversing the long-standing brain drain from Africa.

The paper notes that this agriculture-led strategy aligns with the goals of the African Continental Free Trade Area (AfCFTA), one of whose pillars is the liberalization of intra-African trade in agriculture. In the past two decades, intra-African agricultural trade has grown by 6.2 percent annually, compared to 7.4 percent growth in agricultural imports from external sources and 6 percent growth in exports to external markets.

While the reasoning is sound, there is a caveat: not all African countries can rely on agriculture for their economic success. According to the UNCTAD State of Commodity Dependence database, only about a dozen African nations, mostly in the Sahel region, have economies where more than 60 percent of their total merchandise exports consist of agricultural commodities.

As a result, while agriculture is undoubtedly a significant sector in many African economies, the study errs by treating Africa – a continent comprising 54 nations – as a single entity, comparing it to individual countries like China and India, where political and economic decisions are centralized.

It fails to acknowledge that Africa is a diverse continent, home to nations with substantial agricultural potential alongside those with minimal agricultural sectors. For instance, countries such as Mauritania, Equatorial Guinea, Libya, and Namibia depend on other industries for economic growth, and establishing a robust agricultural base in these regions may take decades.

Additionally, factors like limited rainfall or arable land can hinder agricultural development, as seen in Djibouti and Seychelles. Although recent technological advancements, such as vertical farming and hydroponics, can help address some of these challenges, it remains crucial to avoid a one-size-fits-all approach.

There is no singular model that Africa should adopt; instead, each African nation should develop its own growth strategy tailored to its unique social, economic, and cultural context.

Danilo Desiderio serves as the CEO of Desiderio Consultants Ltd in Nairobi, Kenya, specializing in African customs, trade, and transport policies. He is a customs and trade expert at the World Bank and a senior associate to the Horn Economic and Social Policy Institute (HESPI).