Microeconomic Analysis of Policy and Program Opportunities (PPOs)

1. Director, Operational Support
AKADEMIYA2063
Microeconomic Analysis of Policy and
Program Opportunities (PPOs)
Dr. Getaw Tadesse

2. #2023 AGRODEP CONFERENCE
Preamble
The presentation intends to highlight
• The emerging challenges and opportunities facing African
microeconomic agents/actors
• Consumers,
• Entrepreneurs
• Smallholder producers
• Research issues and lessons in selected Policy and Program areas
• Policy refers to regulations to manage behaviors and actions
• Program refers to Investments to create incentives and resolve constraints
• Data and methodological issues in microeconomic analysis

3. #2023 AGRODEP CONFERENCE
African consumers
Challenges
• Income and health shocks
• Rising food prices and other bills
• Degradation family and community based social
transfers
Opportunities
• Rising supermarkets and rural venders
• Rising supply of processed and convenient foods
• Rising awareness on diet for health and nutrition

4. #2023 AGRODEP CONFERENCE
African Entrepreneurs
(Firms and enterprises)
Challenges
• Most are SMEs and informal
• Competition and market power
• Public services/infrastructures (energy, land, water,
etc.)
Opportunities
• Availability of technologies /innovations
• Increased access to skilled and cheap
manpower
• Increased demand for differentiated product
and services

5. #2023 AGRODEP CONFERENCE
Smallholder Producers
Opportunities
• Increased access to technology and advisory services
• Rising prices for agricultural products
• Growing demand and market for food
Challenges
• Weather shocks
• Rising input prices
• Shrinking farm size

6. #2023 AGRODEP CONFERENCE
Examples of PPOs for agriculture and livelihoods
Social protection
Climate smart technologies
Digital Advisory and Information
Services
Small scale irrigation

7. #2023 AGRODEP CONFERENCE
Social protection
• How responsive are governments to shocks?
• How effective and efficient are the
responses?
• Targeting efficiency
• Distributional impacts
• Humanitarian vs Development benefits
• Cost of implementation
• How important are pre-existing social
protection programs to manage emerging
shocks?
Effectiveness score of COVID-19 policy
responses

8. #2023 AGRODEP CONFERENCE
Firm-level innovations
• Preliminary observations
• Declining profit
• Low and declining innovativeness
• Clustering and ICT are critical for innovation
• Positively associated with business
obstacles???
• Research gaps
• The need for generating reliable dataset
• Targeting of public support
• Firms’ response to public support : innovation
platform, innovation grants

9. #2023 AGRODEP CONFERENCE
Small-scale irrigation
Observation
• Growing interest to invest on irrigation
• Enhancing labor productivity
• Regular supply of raw materials for the growing
processing sector
Research gaps
• The feasibility and scalability of SSI
• Efficiency of SSI
• The choice of irrigation technologies
• Irrigation governance options

10. #2023 AGRODEP CONFERENCE
Food Safety
Drivers
• High cost of food borne diseases
related to health and trade rejection
• Increasing awareness of consumers’
and policymakers on safe food /diet
quality
Research Issues
• Constraints to compliance
• Consumers willingness to pay for
food safety and quality
• Harmonization of standards
Frequency of African
export rejections
African Food Safety Index

11. #2023 AGRODEP CONFERENCE
Data and econometric issues
• Microeconomic analysis
• Depends on micro data at firm, household
or individual levels
• African students and researchers prefer to
depend on their own primary data
• Challenges of working on secondary data
• Not timely accessible
• The variables included are not comprehensive and
specific
List of micro datasets available in many
countries
• DHS: Demographic and Household Surveys
• LSMS: Living Standard Measurement
Surveys
• SAS: Seasonal Agricultural Surveys
• Labor Force Surveys:
Global and Regional sources
• WBES: World Ban Enterprise Surveys
• Afrobarometer

12. #2023 AGRODEP CONFERENCE
Data and econometric issues
• Most microeconomic studies are based on discrete choice models
• Binary as well as multinomial choices
• Model selection
• While there exist plenty of Micro-econometric models, most analysis are
based on few them
• There exist mismatches between the nature of the dependent variable
and the model selected
• Bivariate vs multinomial choices
• Poisson vs truncations
• Sequential and simultaneous choices

13. THANK YOU