Agribusiness for Africa’s Prosperity. Country Case Studies
has yet reached the stage three (innovation-driven economies). While stage one countries have just reached the basic requirements for competitiveness (with regards to institutions, infrastructure, macro-economy management apparatus, and health and primary education), stage two countries already have efficiency enhancers in place (like a certain level of higher education and training, of market efficiency, and of technological readiness). Innovation and sophistication factors like business sophistication and innovation capacity are not yet strong at stage two, but are important for stage three. The countries selected for the case studies differ in respect of these stages, the rankings, and the scores. These findings are of importance for assessing agribusiness prospects in these countries. Cameroon – with a rank of 111 out of 128 countries in the GCI/Global Competitiveness Index 2007 (WEF/WB/AfDB 2007) and a score of 3.3 (on a scale of 1 to 7) – is relatively weak in terms of efficiency enhancers. Ethiopia – ranked 123rd with a score of 3.0 – is relatively weak in efficiency and innovation enhancers. Kenya – with a rank of 97 and a score of 3.6 – is by contrast relatively strong in innovation enhancers (business sophistication and innovation). This fact may also help to explain the rather favourable Agribusiness/Agriculture Production (AB/AP) ratio. Mali – with a rank of 122 and a score of 3.0 – is relatively weak in terms of efficiency enhancers. Nigeria – with a rank of 102 and a score of 3.5 – is also relatively weak in terms of efficiency enhancers. South Africa – with a rank of 46 and a score of 4.4 – is relatively weak in terms of efficiency enhancers. Zambia – with a rank of 117 and a score of 3.2 – is especially weak in terms of innovation enhancers but also in terms of efficiency enhancers. The basic message pertinent to this comparison of agribusiness development strategies is that advances in terms of efficiency enhancers will be very important for competitiveness, even when innovation enhancers are still at a low level of development. Development of efficiency enhancers will stimulate development of innovation enhancers and vice versa. Other groupings of countries relate to income, poverty and human development, criteria which were also relevant in the selection of country case studies. According to the categories of lowincome countries (LICs), lower-middle-income countries (LMCs) and upper-middle-income countries (UMCs), five countries (Ethiopia, Kenya, Mali, Senegal, and Zambia) belong to LICs, Cameroon and Nigeria are categorized as LMCs, and South Africa is grouped as a UMC (World Bank 2010). While Ethiopia has a ratio of the agribusiness share (of GDP) to agriculture share (of GDP) of 0.54, Kenya has a much higher ratio of 0.88, while the ratios of Cameroon with 0.43 and of Nigeria with 0.38 are quite low. South Africa has however a very high ratio of 4.0, comparable to the ratios of some developed countries (Wilkinson & Rocha 2009). All this shows that there are different degrees of agribusiness development within the group of African LICs, but there are also vast differences in the ratios between the LICs and the LMCs on the one hand and the LMCs and the UMCs on the other. This classification also can be used to show that LICs, LMCs, and UMCs have distinctly different ratios of agro-processing in total manufacturing, a fact that is especially pronounced between the LICs on one side and LMCs and UMCs on the other (Wilkinson & Rocha 2009). The eight case study countries can also be grouped according to the Human Development Index (HDI) and the Human Poverty Index (HPI) based on UNDP reports. This classification is relevant as there is an observed high correlation between the value of the HDI and the level of agroindustrial development (see Wilkinson & Rocha 2009). The agribusiness to agriculture ratio is highly correlated with human development indicators, with low levels of human development being directly related to low AB/A ratios. From these eight countries, looking at the HDI values (UNDP 2007), Cameroon is grouped as a medium human development country (with a value of 0.532), Ethiopia as a low human development country (with a value of 0.406), and Kenya as a medium human development country (with a value of 0.521). Mali is a low human development country (with a value of 0.380), Nigeria is also a low human development country (with a value of 0.470), as are Senegal (with a value of 0.499) and Zambia (0.434) while South Africa is a medium 14