Identifying agricultural investment opportunities in sub-Sahara Africa - A global, economy-wide analysis

Sub-Saharan Africa (SSA) is the most important development challenge of the 21st century. Poverty is higher in most African countries than elsewhere in the developing world. According to the recently published Report of the Commission for Africa without economic growth, Africa cannot make substantial reductions in poverty. Among three proposed policy options the Commission recommends that African countries invest significantly in agriculture. Policy makers in the region face a dilemma: which sector within the agriculture will yield the highest return for a given budget? This paper simulates productivity gains in sub Sahara African agriculture subject to trade-offs between gains in crops and gains in livestock. The simulated results suggest that for sub-Sahara Africa, as a whole, research in crops would generate higher welfare benefits than any sharing of research funds between crops and livestock. Even under the most favorable conditions for livestock, sub-Sahara Africa gains more from research in crops than from research in livestock. This result does not mean that investing in livestock and other non traditional, high-value commodities is not important. In many successfully transforming economies in SSA, domestic and foreign demand for these products is growing rapidly providing ready market outlets for increased domestic production for these high value commodities.