Why Africa isn’t the world’s breadbasket

Africa is the least likely place on earth to have a shortage of food based on its natural endowments. Much of the land and climate are ideally suited for crops and livestock. But bad government and misguided foreign aid have prevented Africa from being the world's breadbasket.

Food aid to help countries through a temporary famine often drives farmers out of business. How can they sell their produce when wealthy western countries, often overflowing with subsidy-driven agricultural surpluses, are giving it away free? Thus most African nations have become dependent on food imports, even though they were food exporters not too many years ago.

Punitive domestic policies are to blame as well.

Throughout Africa, farmers are forced to sell their production to marketing boards, which pay far less than the world price.

This de facto tax allows the government to reap most of the profit; to avoid it, farmers produce only for themselves, smuggle their produce elsewhere or simply cease farming altogether.

Insecure property rights also discourage farming, as in Zimbabwe where the government has confiscated white farmers' land.

Moreover, rather than distributing this land to the landless, governments often give it to friends of the ruling party for their personal enrichment.

A recent World Bank study found that full elimination of import tariffs in Europe, Canada, Japan and the U.S. would raise African exports by $2.5 billion per year. This would lead to a major increase in growth for Africa.

Although most African goods enter the U.S. with low or no tariffs, some of Africa's best exports, such as groundnuts and tobacco, face heavily protected U.S. markets.

Additionally, Africa could encourage trade within itself by lowering its own tariff barriers. Almost all African countries have import tariffs far above those in the West (see figure). http://www.ncpa.org/edo/bb/2002/images/bb060302.gif

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, June 3, 2002. See also Elena Ianchovichina, Aaditya Mattoo and Marcelo Olarreaga, Unrestricted Market Access for Sub-Saharan Africa: How Much Is It Worth and Who Pays? World Bank Working Paper 2595, April 2001.

For Bartlett text http://www.ncpa.org/edo/bb/2002/bb060302.html
For World Bank text http://www.econ.worldbank.org/files/1715_wps2595.pdf
For more on Foreign Aid http://www.ncpa.org/iss/int

FMF Policy Bulletin / 7 August 2002 - Policy Bulletin / 13 October 2009