The food and financial crises in Sub-Saharan Africa : origins, impacts and policy implications

302 Pages·2011·3.432 MB·English

by  David R Lee, Muna Ndulo

THE FOOD AND
FINANCIAL CRISES IN
SUB-SAHARAN AFRICA
ORIGINS, IMPACTS AND POLICY IMPLICATIONS
The Food and Financial Crises
in Sub-Saharan Africa:
Origins, Impacts and Policy Implications
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The Food and Financial Crises
in Sub-Saharan Africa:
Origins, Impacts and Policy Implications
David R. Lee
Professor, Charles H. Dyson School of
Applied Economics and Management
Cornell University
Muna Ndulo
Professor, Cornell Law School
Director, Institute for African Development
Cornell University
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recording or otherwise, without the prior permission of the copyright owners.
A catalogue record for this book is available from the British Library, London, UK.
Library of Congress Cataloging-in-Publication Data
Lee, David R. (David Robinson), 1950 -
The food and financial crises in sub-Saharan Africa: origins, impacts and policy
implications / David R. Lee, Muna Ndulo.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-84593-828-4 (alk. paper)
1. Food supply Africa, Sub-Saharan. 2. Food prices Africa, Sub-Saharan. 3. Financial
crises Africa, Sub-Saharan. I. Ndulo, Muna. II. Title.
HD9017.A2L44 2011
363.80967--dc23
2011027045
ISBN-13: 978 1 84593 828 4
Commissioning editor: Rachel Cutts
Printed and bound in the UK by CPI Group (UK) Ltd, Croydon, CR0 4YY, from copy
supplied by the authors
Contents
Tables vii
Figures ix
Contributors xii
Preface xiv
1. Africa's Dual Crises: The Food and Financial Crises and their
Effects in Sub-Saharan Africa-Introduction and Overview
1
David R. Lee, Julia Berazneva and Muna Ndulo
2. The Global Food and Financial Crises and the Poor in Africa 22
Ernest Aryeetey and Nelipher Moyo
3. Food Prices and Economic Crises: Causes and Consequences
for Food Security in Developing Countries 48
Keith Wiebe, David Dawe and Kostas Stamoulis
4. Future Challenges for the World Food Economy and Sub-
Saharan Africa: Major Environmental and Socioeconomic
Drivers of Change 61
Siwa Msangi and Mark Rosegrant
5. Here We Go Again: The Abiding Structure of Financial Crisis-
and What To Do about It 94
Robert Hockett
6. The Food and Financial Crises and Complex Derivatives:
A Tale of High Stakes Innovation and Diversification 101
Vera Songwe
7. Agricultural Productivity in Sub-Saharan Africa 122
Keith 0. Fug lie
8. Are Staple Foods Becoming More Expensive for Urban Consumers
in Eastern and Southern Africa? Trends in Food Prices, Marketing
Margins and Wage Rates in Kenya, Malawi, Mozambique,
and Zambia 154
Nicole M. Mason, T.S. Jayne, Cynthia Donovan and Antony Chapoto
vi Contents
9. The Short-term Impact of the 2008 Food Price Shock on Poverty
in Uganda 189
Kenneth R. Sim ler
10. The Likely Impact of Food Price Increases on Nutritionally
Vulnerable Households in South Africa 211
Hettie C. Schonfeldt, Nicolette Gibson and Hester Vermeulen
11. Africa's Turnaround: From Crisis to Opportunity in African
Agriculture 233
William A. Masters
12. The Role of Public Policies and Policy Makers in Africa: Responding
to Global Economic Crises 247
Vusi Gumede
13. Lessons of the Food and Financial Crises: Renewing Sub-Saharan
Africa's Commitment to Food Security and Economic Growth 264
David R. Lee, Derek Headey, Keith Wiebe and Muna Ndulo
14. Index 279
Tables
Table 1.1. Examples of Main Effects of the Economic Crisis and Household Responses 54
Table 4.1. Public Expenditures in Agriculture-related Research, 1981-2000 68
Table 4.2. Total, Feed and Food Demand for Cereals (Millions of Metric Tons) 72
Table 4.3. Baseline Results for Agricultural and Non-agricultural Sector Investments
for the Years 2000-2050 (Billions of 2000 US dollars) 75
Table 4.4. Breakdown of Agricultural Sector Investment Needs under Baseline Case
for the Years 2000-2050 (Billions of 2000 US dollars) 76
Table 4.5. Simulated Impacts on Yields in 2050 from Various Climate Change
Simulations 79
Table 4.6. Simulated Impacts on Price in 2050 from Various Climate Change
Simulations (US$/mi) 80
Table 4.7. Total Number of Malnourished Children in 2000 and 2050 (Millions of
Children Aged 0 to 5) 81
Table 4.8. Spending Needs for Agricultural Sector to Offset Climate Change Impacts,
2000-2050. 83
Table 6.1. Exports and Imports of Food and Agriculture Products by SSA Countries 113
Table 7.1. Development Indicators for sub-Saharan Africa 126
Table 7.2. Agricultural Indicators for sub-Saharan Africa 127
Table 7.3. Countries Included in Productivity Analysis 136
Table 7.4. Regression Estimates of an Agricultural Production Function for SSA 139
Table 7.5. Agricultural Output and TFP Indexes for Countries and Regions in
sub-Saharan Africa 145
Table 7.6. Sources of Agricultural Growth in sub-Saharan Africa 148
Table 8.1. Staple Food Budget Shares, Urban Centers in Kenya, Malawi,
Mozambique and Zambia 158
Table 8.2. Staple Food Price Series and Marketing Margins Analyzed for Each
Urban Center 162
Table 8.3. Summary of Results: Trends over Time in Quantities of Staple Foods
Affordable per Daily Wage 164
Table 8.4. Summary: Trends over Time in Marketing Margins for Maize and Wheat
Products 172
viii Tables
Table 8.5. Pair-wise Correlation Coefficients for First-differenced Nominal Retail
Staple Prices: Key Urban Centers in Kenya, Malawi, Mozambique
and Zambia 179
Table 9.1. Average Budget Shares by Region and Rural/Urban Area of Residence 193
Table 9.2. Staple Food Prices by Region, 2007-08 (Uganda shillings per kg) 204
Table 9.3. Estimated Impact of Food Price Increases on Poverty Headcount Ratio 205
Table 9.4. Estimated Impact of Food Price Increases on Poverty Gap 207
Table 10.1. A Comparison of General Inflation and Food Inflation Based on
Consumer Price Index (CPI) Figures, 2006-2009 212
Table 10.2. Portion Sizes Reported from Various Food Consumption Surveys in
Low Income Populations over Time 218
Table 10.3. Average Percentage RDA in 200g Fortified Maize Meal or Wheat Flour 219
Table 10.4. Trends in Food Prices and Overall Inflation, April 2005 to Early 2008 221
Table 10.5. Estimated Effects of Food Price Increases on Portion Sizes and
Nutrient Intakes 225
Table 10.6. Estimated Effects of Food Price Increases on Intakes of Energy, Protein,
Iron and Vitamin A 226
Figures
Figure 1.1. International commodity prices, January 2000-March 2011
(Price index, January 2000 = 1) 5
Figure 2.1. Recent Real GDP growth performance 27
Figure 2.2. World food price index, 2007-2010 30
Figure 2.3. Africa: poverty and income trends 38
Figure 3.1. Trends in undernourishment, 1969 to 2010 56
Figure 3.2. Undernourishment by region, 2010 57
Figure 4.1. The interrelationships among key drivers of change in food systems
and their connection to human well-being 65
Figure 4.2. Characteristics of various drivers of change in food systems 66
Figure 4.3. Total cereal production to 2050 (millions of metric tons) 70
Figure 4.4. Per capita cereal production to 2050 (kg per capita per year) 71
Figure 4.5. Per capita cereal demand to 2050 (kg per capita per year) 73
Figure 4.6. Prevalence of preschool child malnutrition in Asia and Africa
(percent of population aged 0 to 5) 74
Figure 4.7. Simulated increases in net irrigated area over time 75
Figure 4.8. Share of population with access to clean water over time 77
Figure 4.9. Female secondary schooling rates over time 78
Figure 4.10. Schematic of household income and expenditure adjustments 85
Figure 6.1. Growth in the US, sub-Saharan Africa, Euro area and BRIC
countries 2001-2010 104
Figure 6.2. Evolution of credit default swap indices with subprime mortgage
components, 2006-2009 107
Figure 6.3: Commodity prices, 2002-2009 109
Figure 6.4. Notional amounts of total commodity-based OTC derivatives traded
2002-2010: commodity trading spike in 2007-2008 111
Figure 7.1. International comparisons of agricultural land and labor productivity,
1961-1965 to 2006-2008 132
Figure 7.2a. Agricultural TFP indexes for SSA regions, 1961-2008
(Index, 1961=100) 7.2a. Sahel, Horn, and Central Africa 142