Agriculture Public spending

WTO Agriculture symposium

2

AGRAProfile and background

AGRICULTURE PUBLIC EXPENDITURECurrent trend in Africa

SHARE OF AG SPENDING VS TOTAL PUBLIC EXPENDITUREChallenges

POLICY INTERVENTIONS REQUIRED• Create an enabling policy environment• Complement public investments in the ag sector• Composition of public spending vs provision of public goods and sustainable outcomes

HOW DOES AGRA SUPPORT COUNTRIES?

Table of Contents

AGRA at a Glance

Our History… Business Model Grant-Making Technical

Assistance Government

relations Convening and

engagement Partnerships

Geographic Footprint

Our Ambitious Goals…

To increase the incomes and food security for 30 million farming households in 11 countries by 2021

What We Do

Our Approach

6

AGRA Board and Leadership

Agriculture spending in Africa

• Agriculture employs over 70% of thepopulation

• Majority of the population is primarily engaged in agriculture

• Empirical studies show positive growth and poverty reduction effects from public spending in agriculture, yet in most African countries public expenditure to agriculture is stagnant or declining.

AGRA Agriculture public Expenditure Policy interventionsHow does AGRA support

countries?

Context Status

Conclusion

8

Source: Makombe et al, 2018 in Wouterse, and Taffesse, 2018

AGRA Agriculture public Expenditure Share of Ag expenditure Policy interventions

11.5

6.9 5.8 6.4

20 20

11.3

8.3 8.3

-5.9

12.1

23.1

-4.3

11.1

-3

8.2

-3.1

-12.3

Africa Central Eastern Northern Southern WesternPer

cent

(%

)

1995-2003 2003-2008 2008-2017

Annual Average Change in Agriculture Expenditure (%)

TrendsAGRA Agriculture public Expenditure Policy interventions

How does AGRA support countries?

Conclusion

Makombe et al, 2018 in Wouterse, and Taffesse, 2018

AGRA Agriculture public Expenditure Share of Ag expenditure Policy interventions

Where do we stand relative to the CAADP Target of 10%

0

2

4

6

8

10

12

Africa Central Eastern Northern Southern Western

Perc

ent

%

2003 2003-2008 2008-2017 2017 CAADP target

Share of Agriculture Expenditure in Total Government Expenditure (%)

0.02.04.06.08.0

10.012.014.016.0

Perc

ent

(%)

Average 2015-2017 CADDP target

AGRA Agriculture public Expenditure Policy interventionsHow does AGRA support

countries?Conclusion

10

CHALLENGES

• Low investments in the agriculture sector

• Development budget very small compared to the recurrent expenditure;

• Low burn rate• Lack of prioritisation - absence of

market-led approach• Inadequate programmes execution

capacity• Lack of in-depth and evidence based

problem definition

• Lack on proper M&E systems

• Agriculture sector expenditure data is problematic

• No systematic data that decompose agricultural expenditures by functions (such as irrigation, extension, research) or by subsectors (such as crop, livestock, fishery), except for individual country case studies.

Challenges Limitations in Public Expenditure Tracking

AGRA Agriculture public Expenditure Policy interventionsHow does AGRA support

countries?Conclusion

POLICY INTERVENTIONS

• Countries’ comparative advantages (Agro-ecologiesInfrastructure; information; industrial development – productive capacities)

• Adaptive policies/ balanced approach between export and domestic

• Evidence based and political economy landscape • Market led approach• Private sector friendly• Policy and advocacy interventions for more

predictable, climate friendly government interventions that reduce obstacles to internal and regional food trade

• Sector policies and strategies(NAIPs), sub-sector or commodity specific policies and governing regulations

Enabling environment

• Promotion of PPP interventions• Blended financing mechanisms• Attracting the right types of investors –

problem solving focus• Commodity specific policies and laws (seeds,

fertilizers, market policies) • Coordinated investments –proper business

cases• Alignment to government priorities• Clear sequencing of interventions• Soft and hard infrastructure to go hand in

hand• Implementation capacity of all key actors

Complementing public investments in the agriculture sector

AGRA Agriculture public Expenditure Policy interventionsHow does AGRA support

countries?Conclusion

POLICY INTERVENTIONS

• Political economy analysisWhat are the major policy, regulatory and market systems blockages?Who are the winners and losers of policy choices?Who will be our ally? And who will oppose our efforts?Develop an influencing strategy

• Market trends and value chain prioritization – Viable investmentsWhich value chains are competitive?Which corridors are functional?Where can improvements be made?

• Holistic prioritization approach that is evidence based• Implementation capacity of all key actors• Alignment to government priorities• Clear sequencing of interventions• Enhancing investments quality (balance budget between recurrent and development)

Composition of public spending vs provision of public goods and sustainability

AGRA Agriculture public Expenditure Policy interventionsHow does AGRA support

countries?Conclusion

How does AGRA supports countries?

Country Vision, Strategy, Prioritized Plans and flagships

Accountability Mechanisms in place

Enabling Policy Environment

Stronger Sector Coordination

Implementation Capacity & Delivery

1

2

3

4

5

Deliberate prioritisation of programs at the highestlevel of government leadership

Functional mutual accountability frameworks including regular presentation of sector performance; functional M&E systems in place in the ministry including enhanced capacity in data and analytics capacity

Up-to-date and evidence-based policies.

Strong sector governance, including clear institutional structures, delivery mechanisms, capacity and ensuring that results-based management systems are in place

Sectoral plans, priorities and timely completion offlagship programs

AGRA Agriculture public Expenditure Policy interventionsHow does AGRA support

countries?Conclusion

Conclusion

• Centrality of the Government• Comprehensive problem definition based on countries comparative

advantages• Evidence based policies that promote private sector• Integrated market led interventions - Viable investments• Enhance government’s implementation capacity• Balanced policy (local and export) – national and international trade issues• Promotion of PPP investments

AGRA Agriculture public Expenditure Policy interventionsHow does AGRA support

countries?Conclusion

References• Fan, S., and Rao, N, (2003). Public Spending in Developing Countries: Trends,Determination and Impact. EPTD

Discussion Paper No. 99. IFPRI.

• De Pinto, A., and J. M. Ulimwengu (Eds). 2017. A Thriving Agricultural Sector in a Changing Climate: Meeting Malabo Declaration Goals through Climate-Smart Agriculture. ReSAKSS Annual Trends andOutlook Report 2016. Washington, DC: International Food Policy Research Institute.

• World Bank. 2011. How Do We Improve Public Expenditure in Agriculture?. World Bank. © World Bank.https://openknowledge.worldbank.org/handle/10986/2825 License: CC BY 3.0 IGO.”

• https://pim.cgiar.org/2016/01/12/public-expenditure-in-agriculture-interview/

• Wouterse, F., and A. S. Taffesse (Eds). 2018. Boosting Growth to End Hunger by 2025: The Role of Social Protection. ReSAKSS Annual Trends and Outlook Report 2017–2018. Washington, DC: International Food Policy Research Institute.

Thank you

Thierry Hoza Ngoga

E-mail: Tngoga@agra.org