African Agriculture Could Spur Economic Development

By Lisa Schlein

Geneva
28 May 2009

A new report calls for a big push on agriculture to promote economic development in Africa. The U.N. Economic Commission for Africa and the African Union Commission have launched the Economic Report on Africa 2009.

The report says the global economic crisis and predicted long-term recession will hit African economies hard. Economists say the financial crisis already has resulted in lower demand for Africa's exports and a sharp decline in commodity prices.

The report notes all major industrialized countries have come up with economic stimulus bills. They have pumped billions of dollars into their economies to shore up struggling firms and boost demand for goods and services.

But U.N. Economic Commission for Africa Senior Economist Halima Noor Abdi says African countries do not have the resources to support their economies.

"The implications for Africa are actually very clear. When the recession started or the global financial crisis started, people thought because Africa was not integrated into the world financial markets, it would not be impacted. But, it has been discovered now that the financial crisis turned into an economic crisis, which actually is impacting on Africa in a number of ways. Our share of world trade is going to go down," Noor Abdi said.

Furthermore, Noor Abdi says there will be a decline in capital inflows to Africa, including Overseas Development Aid, foreign direct investment and remittances from abroad. She says many Africans living abroad may lose their jobs, so they will have less money to send to their families.

The report calls for special attention to agriculture as a way of promoting economic development. Noor Abdi says this makes sense on a number of levels.

"We are looking at developing the agricultural sector, which offers great prospects for employment creation, increasing incomes and derived demand for processing agricultural products and non-agricultural products," Noor Abdi said. "Therefore, stimulating the development and growth in the industrial and service sector. This is linkage of agriculture and other sectors in the economy. We have also decided that this was very important because agriculture has the largest multiplier effect among economic sectors in Africa through strong backward and forward linkages with other sectors and between rural and urban areas and economies."

As agricultural production grows, they say the other sectors also will benefit from higher employment and greater income.