Accelerating Agro‐Manufacturing to Feed Africa

Abstract This paper documents stylized facts on agro‐manufacturing, especially the food, beverages and tobacco (FBT) manufacturing value added (MVA) in Africa and empirically analyzes its determinants using data for a panel of African countries over the period 1990–2011. We also estimate for the sample of sub‐Saharan Africa and North Africa during the same period. The analysis is extended to food and beverages (FB) only MVA. The analyses point to large differences in sector shares both across countries at different levels of economic development. Using a two‐stage least squares (2SLS) regression method, it finds that a large proportion of the cross‐country variation in FBT MVA and FB MVA can be accounted for by country characteristics, policy and institutional variables. In particular, the paper finds that an inverted U‐shaped relationship with real per capita GDP for FBT MVA and FB MVA, except in FB MVA in North Africa where the reverse is true. Key positive drivers of FBT MVA for the entire continent include government consumption expenditure, household consumption expenditure, social globalization, dependence on oil, minerals, natural gas, coal and forest resources, arable land, and renewable electricity output. Major negative drivers are trade openness and population size. The policy implications and lessons of these results for increasing FBT and FB MVA and feeding Africa are discussed.