Is Ethiopia in the midst of a green revolution?

This is from Bachewe and co-authors in World Development:

Screen Shot 2018-03-14 at 8.34.44 AMDespite significant efforts, Africa has struggled to imitate the rapid agricultural growth that took place in Asia in the 1960s and 1970s. As a rare but important exception, Ethiopia’s agriculture sector recorded remarkable rapid growth during 2004–14. This paper explores this rapid change in the agriculture sector of this important country – the second most populous in Africa. We review the evidence on agricultural growth and decompose the contributions of modern inputs to growth using an adjusted Solow decomposition model.Screen Shot 2018-03-14 at 8.35.03 AM We also highlight the key pathways Ethiopia followed to achieve its agricultural growth. We find that land and labor use expanded significantly and total factor productivity grew by about 2.3% per year over the study period. Moreover, modern input use more than doubled, explaining some of this growth. The expansion in modern input use appears to have been driven by high government expenditures on the agriculture sector, including agricultural extension, but also by an improved road network, higher rural education levels, and favorable international and local price incentives.

The improvement in agricultural productivity was driven, in part, by deliberate state investment in agriculture:

Ethiopia is one of only four African countries to have implemented the CAADP agreement of a 10% target of annual government expenditures going to agriculture over the 2003–2013 period.

… The GoE has for a long time put agriculture at the center of its national policy priorities. The Agriculture Development Led Industrialization (ADLI) strategy was formulated in the mid-1990s to serve as a roadmap to transform smallholder agriculture in the country. Rural education and health, infrastructure, extension services, and strengthening of public agricultural research were among its top priorities.

These gains are remarkable (if we can trust the state statistical agency data used in the analysis). They are also likely not replicable in other countries across the Continent on account of the high variance in state capacity in the region.

For instance:

[while the] Comprehensive Africa Agriculture Development Programme (CAADP) proposed that African countries allocate 10 percent of their total annual budgets toward boosting agricultural productivity…, only 13 countries [have] signed the CAADP compact (Benin, Burundi, Cape Verde, Ethiopia, The Gambia, Ghana, Liberia, Mali, Niger, Nigeria, Rwanda, Sierra Leone, and Togo).

And out of these 13 only Cape Verde, Ethiopia, Ghana, and Rwanda seem like they have the capacity to translate state fiscal outlays into real productivity gains in agriculture.

Read the whole paper here.

Powering Africa: “Off-grid” is not the answer

This is from the Economist:

Generating power at home may transform life in rural areas for the better, but factories, mines and mills need a reliable, large-scale power supply. If Africa is to industrialise, it needs power plants.

More here.

Also, a little known fact is that in the next five years nearly all of eastern Africa will have an energy surplus (everyone is increasing their installed capacity). But the power lines need to be upgraded, extended, and integrated (see here); and governments need to come up with policies (mostly related to financing) to get more people living under the grid (close to power lines) on the grid.

Energy to top the African Development Bank’s agenda

The FT reports:

Akinwumi Adesina, who took over as president of Africa’s lead development lender in September, has said that his flagship project aims to raise $55bn of investment to close the energy deficit in the next decade.

He says the bank will take a leadership role, coordinating with existing multinational initiatives and pushing member states to move faster to privatise and liberalise their energy sectors.

More on this here.

The paper also has a neat report on African economies’ adjustment to China’s slowdown, US pension funds’ move into the PE space in Africa, the grievances that fuel extremism in Africa, among others.

Full report is here (unfortunately, gated).

Ethiopia’s Gibe Dam Threatens Kenya’s Lake Turkana, and Why the Kenyan Government Doesn’t Care

Six hundred miles upstream from the northern tip of Lake Turkana in Kenya, the Ethiopian Gibe III dam is nearing completion. According to Africa Confidential the dam will produce 1860 MW, making it the biggest hydro-electric power plant in Africa.

No doubt the developmental impact of the Gibe projects will be huge. Despite doubling Ethiopia’s 2007 installed power generation capacity, the project will bring more than 150,000 hectares (about 580 sq. miles) of land under irrigation (this will be more than the total acreage under irrigation in the whole of Kenya as of 2011). In addition, the boost in power generation capacity will feed into the East African Power Pool, thus helping alleviate power problems in Kenya and beyond.

But will the benefits of the Gibe projects outweigh the potential human cost, especially considering externalities that will spread beyond Ethiopia’s borders?

screen-shot-2017-02-14-at-11-04-21-pmAccording to Sean Avery, the Omo-Gibe project intends to divert as much as 32% of the Omo River’s waters for irrigation and other uses upstream. But the Omo River is the main inlet of Lake Turkana, Kenya’s largest by area (Kenya owns the smallest bit of Lake Victoria) and Africa’s fourth largest lake.

Lake Turkana gets as much as 90% of its inflow from the Omo River.

In a new Oxford study, Avery notes that one of the planned Ethiopian irrigations schemes alone, the Kuraz Sugar Scheme, will gobble as much as 28% of Omo inflows into Lake Turkana at 70% efficiency and a whopping 40% if the project inefficiently uses water! The same study notes that construction of Gibe III may lower the water volume in Lake Turkana by as much as 41-58% (or an average drop in lake level of 22 metres) over a period of time. This will have a significant impact on the Lake’s salinity (being the biggest desert lake in the world) and suitability of its water for human consumption and agriculture. To put this in perspective, the average depth in the lake is 30 metres. Without proper water management upstream Lake Turkana faces hydrological collapse akin to what happened to the Aral sea or what is happening to Lake Chad.

These findings have been echoed in this Human Rights Watch report.

Screen Shot 2017-02-14 at 11.06.32 PM.pngAt this juncture you may ask, why isn’t the Kenyan government up in arms over the Gibe projects?

Well, the simple answer is that a confluence of factors have made it such that Nairobi does not have an incentive to care about the 170,000 odd people that will be adversely affected by a decline in water volume and economic viability of Lake Turkana. Three of these factors stand out.

  1. Turkana, being largely rural, sparsely populated, poor, and with a low literacy rate, does not make a fertile ground for pressure groups to form. Complaints over the potential impact of Gibe III have mostly come from academics and international NGOs that, lacking political salience, are very easy to ignore. Historical low voter turnout in the region also does not help matters. This has made it easy for the government to pretty much ignore the region over the years. Residents of Turkana often talk of “going to Kenya” whenever they venture into the southern regions of the country.
  2. A more important reason than the one above is perhaps that Gibe III will provide power to the Kenyan grid. Kenya’s Vision 2030 development plan includes a raft of projects that will require increased generation capacity in the next couple of decades that the country will surely not meet. Gibe III will be a much needed plug in the expected energy capacity gap. Notice that most of the projects will benefit the more politically powerful pockets of the Kenyan electorate to the south of the country, most of whom have never and will probably never hear of the human impact of Gibe III in Turkana unless it leads to something catastrophic enough to attract national media attention.

    Image

    Source: Gado, Daily Nation

  3. Oil. Oil. Oil! As if things could not get worse for residents to the north of Turkana county, commercially viable deposits of oil have been discovered to the south of the county. It goes without saying that moving forward most of the economic focus will be in that part of the county, at the expense of most other economic activities (and Turkana residents’ most pressing needs, see image) – including fisheries on Lake Turkana.

Admittedly, the fault here lies not with Addis Ababa. Ethiopia had to do what it had to do to meet its development needs. The fault is Nairobi’s for not having the foresight to strike a workable “Coasian bargain” with Addis on an arrangement that would be less harmful to residents of Turkana. This post has attempted to sketch some of the reasons why this is the case.

In an ideal world Nairobi would have negotiated with Addis Ababa for a discount rate for power from Gibe III and pledged to invest the difference in compensating residents of the Lake Turkana basin who will be adversely affected by the planned projects on the other side of the border. Unfortunately, for the three reasons stated above and others, I doubt that this happened or will happen in the near future.

To paraphrase a famous quote from a couple of millennia ago, in the world we live in those with political power get what they want and those without suffer what they must.

On the quality of higher education (and human capital development) in Africa

This post first appeared on the African Development Bank’s Integrating Africa Blog where I am a regular contributor. 

UPDATE: I got an email from readers working with the Regional Initiative in Science and Education (RISE), exactly the kind of collaboration that I am saying is much needed in Africa. Check them out here.

According to The Times Higher Education World University Rankings 2012-2013, the highest ranked university in Africa, the University of Cape Town, is 113th in the world. The ranking system employs 13 performance indicators that take into account universities’ core functions, including “research, knowledge transfer and international outlook.” Among the leading 400 world academic institutions, there are only four from Africa, all in South Africa. As a region, Africa only has 35 scientists and engineers per million inhabitants, compared with 168 in Brazil, 2,457 in Europe and 4,103 in the United States. The region is clearly behind as far as knowledge production and dissemination is concerned, producing only 1.1 percent of the world’s scientific knowledge, despite comprising more than 13 percent of the global population.

At barely over 8 percent, Africa’s gross enrollment in tertiary institutions of learning is the lowest of any region in the world (UNESCO, 2011). The average enrollment rate for developing countries is 23 percent, and that for advanced countries is 74 percent. Africa’s poor showing in the higher education sweepstakes is both a cause and effect of the region’s poor economic environment. The massive cuts in higher education funding in the wake of the structural adjustment programs of the 1980s and 1990s, even as enrollment more than tripled between 1991 and 2005, have had an adverse impact on quality. And in turn, the lack of high quality tertiary level education has starved the region of high skills needed for efficient allocation of factors of production thereby stunting improvement in productivity, high value addition and research and development. Africa devotes less than 1 percent of its GDP to research and development.

Data from 33 countries for which it is available show that tertiary education financing in the region has declined from a high of US $6,800 per student per year in 1980 to just about $981 in 2005. Over the same period the World Bank decreased its education lending from 17 percent in 1985-89 to just 7.5 percent currently (this is despite the fact that the World Bank nearly doubled its education lending between 2008 and 2009). The decline in public funding in the face of increasing demand for higher education has led to the proliferation of private universities of dubious standards and a bias towards perceived “soft” fields. In 2004 a meager 28 percent of students were enrolled in perceived “hard” disciplines in the sciences and engineering.

A 2008 study of 12 countries showed an increase in public universities from 113 to 188 between 1995 and 2008. Over the same period private universities ballooned from 14 to 107. This rapid increase in the number of universities in the region has not been matched by an increase in the number of trained teaching staff or facilities such as laboratories, libraries, and the like. Indeed, most of the new universities have tended to specialize in vocational subjects that require very little capital and human resource investment. To put it mildly, there is a great mismatch between the region’s development needs and the type of graduates it produces each year.

Image

An impression of the proposed Konza City in Kenya

The shortage of skills permeates nearly all skill levels, and could get worse as the region’s economy continues to grow over the next two decades. The case of Kenya is illustrative. The country has an ambitious plan to be the information and communication technology (ICT) hub of Eastern Africa (dubbed the “Silicon Savannah”) complete with a proposed $10 billion techno-city (Konza City) situated about 60 kilometres southeast of Nairobi. Already ICT multinationals, including IBM, Microsoft, Google and Intel, have their regional headquarters in Kenya. All this sounds good, except the lack of local skills. IBM’s research lab in Kenya has had to source for top talent among graduates in computer science, electrical engineering, mathematics, and data scientists from American universities. There is still a shortage of required skills among graduates of Kenyan universities. Quality assurance is also lacking, as recent news reports of “theses for hire” have demonstrated.

As the Kenyan case suggests, the lack of sufficient investment in high quality tertiary education has adversely impacted Africa’s ability to realize its economic potential. A 2005 study showed that a one-year increase in the higher education stock of the region could boost growth rate by about 0.63 percentage points. This adds up to an overall increase in income by about 12 percent over five years. For the region to take off economically there is need for greater investment in quality higher education that will train workers for the 21st century economy. But improving the quality of higher education in the region will be a very costly affair. On their own, the region’s countries lack both the resources (on account of their small economies) and demand (on account of their population sizes) to justify the types of investments required. This is where regional cooperation comes in.

Cross-border educational exchanges are not new in Africa, and go back to the pre-independence era. For generations non-Senegalese francophone students have studied in Senegal, seen as a cheap way of getting quality education at par with diplomas from France. Uganda, with East Africa’s top university, Makerere, hosts legions of Kenyan students, eager to avoid congestion and high costs back home. South Africa, with its many quality institutions is also a preferred destination for students from across the continent. These historical cross-border exchanges have led to the formation of regional associations of higher education – the francophone Conseil Africain et Malgache pour l’Enseignement Superieur (CAMES); Inter-University Council of East Africa (IUCEA); Southern African Regional Universities Association (SARUA); and inter-university cooperation under the Arab Maghreb Union (AMU). Continent-wide, the 208-member Association of African Universities (representing 45 countries) is the umbrella organization of the region’s institutions of higher learning.

These associations need to be strengthened and empowered as drivers of regional harmonization of higher education both to facilitate cross-border inter-university mobility of both teachers and students and guarantee quality assurance. As a 2007 World Bank report aptly noted, “regional quality assurance networks are particularly relevant to Africa because of human resource constraints.” On this score the European Higher Education Area provides a possible model. The just over 10 years old Bologna process is working towards ensuring inter-university mobility (in terms of courses, qualifications, and periods of study) as well as a uniform quality assurance standard. In the African context, a continent-wide area of higher education is infeasible because of language and logistical constraints. However, sub-regional areas of higher education, based on the existing associations, provide a possible avenue to invest in a few good institutions of higher learning that can have a demonstrative effect on national institutions as well set high standards of learning. The associations themselves can also serve as certification bodies to ensure a uniform quality assurance standard (see here).

The announcement in late July 2013 of the creation of a new US $154.2 million multinational science, innovation and technology Pan African University (PAU) in the next five years is therefore welcome. (The African Development Bank (AfDB) has pledged a $45 million grant towards the effort.) PAU will be structured around existing institutions of higher learning across Africa’s five sub-regions. Basic sciences, technology and innovation will be based in East Africa; earth and life sciences including health and agriculture in West Africa; governance, humanities and social sciences in Central Africa; water and energy sciences including climate change in North Africa; and space sciences in Southern Africa.

Thus far, discussions over regional integration of systems of higher education have tended to view tertiary institutions as tools for regional economic and political integration – be it in East Africa, Europe or East Asia. However, the creation of stronger regional areas of higher education – especially in a region like Africa – can also be an economically efficient way of facilitating greater investment in higher education to match the demands of a 21st century economy. It is encouraging that current trends signal a move in this direction. University systems in Africa’s sub-regions would be a good place to start.

I conclude with a caution. The rapid increase in the number of public and private universities in Africa over the last two decades has come at the expense of other post-secondary institutions of learning such as polytechnics (this shift has occurred to a lesser extent in francophone Africa than anglophone Africa). In many countries governments have simply converted polytechnics and other constituent colleges into fully-fledged universities. This trend is worrying, especially given the fact that the vast majority of high school leavers on the continent do not make it to university. The low quality of high school education in the region (as demonstrated by the recent mass student failures in Liberia and Tanzania) is yet another reason why these “bridge” tertiary institutions are needed, both to prepare students for university and to impart valuable skills for those that do not eventually make it to university.

The rush to invest in university education should not distract from the fact that vocational post-secondary institutions, such as polytechnics, are an important component of human capital development, even in advanced countries as is the case in Germany (with its impressive “dual system” of training codified in the Vocational Training Act of 1969). As African economies move from dependence on primary commodities to manufacturing and technology, there will be need for skilled workers at all occupational levels. Doing away with vocational post-secondary institutions will only serve to further inhibit the development of adequate and relevant human capital to match the increased demand for skilled workers.

some good news for Zimbabwe

The BBC reports that the World Bank has decided to resume aid to Zimbabwe – the Bank has not lent the cash-strapped African country any money since 2000. Sad though is the fact that most of the money will probably go to clearance of Zim’s arrears to the WB and the African Development Bank (Zimbabwe owes $1 b). But the WB director, Toga Gayewea McIntosh, who is in charge of the group of African countries that include Zimbabwe promised that more grants will follow soon.

According to the Finance Ministry, Zimbabwe needs $8.3 billion for full recovery to be achieved any time soon after years of ruinous economic policies under the strongman Robert Mugabe.