• Markets & Trade
• Science & Technology

IFPRI is working with USAID, local research institutions, universities, CGIAR centers, and other partners to establish a SAKSS in Southern Africa. The responsibility for the SAKSS node will be shared jointly between the International Water Management Institute (IWMI) and the International Crop Research Institute for Semi-Arid Tropics (ICRISAT).

Southern Africa annually exports approximately $5.8 billion dollars of agricultural goods to markets outside of Africa. Non-traditional goods, particularly fruits, vegetables, and fish represent the largest shares of these exports. Traditional goods such as sugar and tobacco are also important, representing between 14 and 16 percent of total agricultural exports to non-African markets, respectively.

Within Africa, non-traditional goods constitute the largest export sector with fruits and vegetables representing a sizeable share of these exports. Staples, particularly maize and cereals, represent the second largest share of exports. Among traditional goods, sugar is particularly significant, representing about 12 percent of total agricultural exports.

Approximately 76 percent of Southern Africa's imports come from outside of Africa. Non-traditional goods, particularly oils and fats, comprise the largest share of these imports. Staples are also a large import sector from the rest of the world. Specifically, cereals and meat comprise 21 and 13 percent of agricultural imports into the region, respectively.

The share of imports into the region from African countries outside of the region remains relatively small, equaling $104 million. More than half of these imports are within the traditional goods sector. On the other hand, imports from within the region total $777 million. The majority of intra-regional imports are vegetables and fruits, cereals, maize, and sugar.

Although traditional goods comprise almost 71 percent of Southern Africa's total agricultural exports, the prices for many of these goods, including tobacco, cotton, and sugar, continues to fall. Given this price volatility and uncertainty in demand, traditional goods are not a viable option for increasing agricultural growth. In fact, IFPRI projections show that even if these exports grew by about 6 percent annually, agricultural real income would only grow by about 0.14 percent more per year than under a scenario without this growth rate in traditional goods. Expanding markets in traditional goods will require not only increased production but also increased product differentiation and a greater focus on quality standards, among other things. These efforts should be complemented by increased access to markets, inputs, and credit for smallholders.

Non-traditional exports, particularly fruits, vegetables, and fish, comprise the largest share of agricultural exports for markets outside of Africa as well as within Southern Africa. Yet, while this sector has a great deal of potential, particularly since demand constraints are currently low, these markets tend to be highly competitive with rigorous quality standards.

Staples, especially maize and other cereals, represent the largest share of exports from Southern Africa to other African countries as well as the second largest share of exports within Southern Africa. However, the region still imports more staples than it exports. Some of these imports could be displaced by increased staples production, especially since domestic markets in Southern Africa for food staples total $12.1 billion

According to simulations using the IMPACT model, if the productivity of both the livestock and grain sectors were increased simultaneously, then the consumption of grains and livestock products would grow, which in turn would increase the demand for feed grains. For example, if grain and livestock productivity grew annually by 1.5 and 4 percent, respectively, Southern Africa's per capita agricultural income would grow by 0.13 percent more and per capita food consumption would increase by 1.14 percent per year. These gains could be augmented if the productivity increases for livestock and grains are supported by a 4 percent reduction in Southern Africa's transport costs. This results in an additional 1.1 percent growth rate in agricultural incomes.

The biggest gains, however, occur under a balanced growth scenario in which there is growth in not only staples but also in the traditional and non-traditional goods, manufacturing, and the service sectors. Under the specifications for such a scenario, agricultural incomes and food consumption grow annually by 2.24 and 2.02 percent, respectively.

Increased investments in research and development (R&D) can result in improved productivity for key agricultural commodities. Determining which commodities to invest in requires a set of criteria for ranking purposes. In Southern Africa, the criteria used for this ranking is based on the value of production, market growth, historical patterns of trade flows, export growth, and estimates of future demand. Based on these criteria, 11 commodities were identified for Southern Africa.

IFPRI's DREAM model can then be used to show the benefits from an R&D-induced, one percent productivity increase until 2015 across all the 11 commodities for three focus countries in the region: Malawi, Mozambique, and Zambia. The results indicate that Malawi would benefit most from productivity increases in maize, tobacco, potatoes, groundnuts, and cassava. Mozambique also gains from added productivity in cassava, maize, groundnuts, beef, and cow milk, and for Zambia, the largest benefits are in maize, cassava, vegetables, and beef. In general though, the latter country tends to benefit the least out of the three.

In order to determine the regional gains from investing in the three focus countries, the DREAM model allows the productivity gains introduced in the focus countries to spillover to other countries in the region. However, to account for imperfect adoption of technologies between countries, these spillovers are estimated at half the productivity rates in the focus countries. As seen below, South Africa gains the most from the technological spillovers, particularly in the areas of maize, cow milk, beef, vegetables, and potatoes. Angola also gains the most for cassava while Zimbabwe benefits from improved tobacco, cotton, and maize technologies.

Altogether, spillover benefits range from 10 to 93 percent of the total gains accruing to the region. In order to ensure that technology improvements do not disproportionately benefit one country, it is important to focus on those commodities that have a wide geographic scope and can therefore result in a more equitable distribution of spillover gains. As seen in the table below, those commodities that offer a more equitable distribution of benefits include maize, cow milk, beef, vegetables, groundnuts, cotton, and beans. Even though cassava does not benefit the entire region, it does result in large gains in the three focus countries and is an important smallholder commodity. Therefore, it should also be considered a priority commodity for R&D investments.