Agricultural Incentives in Sub-Saharan Africa: Policy Challenges

Abstract

This study examines the state of agricultural incentives in Sub-Saharan Africa, taking stock of the current policy environment and its recent evolution. The global price environment is examined together with the macroeconomic, export crop, food crop, and fertilizer policies in sixteen African countries. Policy diamonds are constructed as incentive indicators reflecting the state of macroeconomic and agricultural policies relative to a perceived frontiers. The study attempts to determine the factors inhibiting countries from moving towards this frontier. The study highlights several continuing policy challenges that sub-Saharan Africa faces to ensure appropriate agricultural incentives to stimulate growth. These include: coping with agricultural commodity price decline and fluctuation; securing access to foreign markets and in particular meeting the sanitary and phytosanitary requirements; removing continuing domestic trade barriers; stabilizing macroeconomic policies; enhancing the institutional framework and the credibility of rules; removing the remnants of marketing boards in many African countries; removing excessive agricultural taxation and ensuring public rural investment; improving transportation infrastructure; encouraging public and private sector partnership and dealing with aid in input markets.

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