Market Opportunities for African Agriculture: A General Equilibrium Examination of Demand-Side Constraints on Agricultural Growth in East and Southern Africa

"The report applies a general equilibrium framework for the analysis, focusing on seven East and Southern African countries—Madagascar, Malawi, Mozambique, Tanzania, Uganda, Zambia, and Zimbabwe—and finds that an export-led agricultural growth strategy is unlikely to generate substantial overall income growth in these countries. Despite significant market reform initiatives, future growth prospects for traditional agricultural exports in many countries in the two regions do not appear promising, even if lost market shares are recovered through improvements in productivity, product quality and variety, and marketing conditions. Simulation of a recovery of traditional exports to their historical high levels results in only an additional 0.08–0.15 percent annual growth in per capita real GDP for the seven countries studied. The limited impact of an increase in traditional exports is due primarily to the fact that they now account for only a small portion of the GDP and production of these commodities has relatively weak economic linkages with other sectors in the domestic economy. Moreover, world prices for these commodities are currently rather low and their recovery in real terms to the levels of the early 1970s is unlikely."