High food prices may help African agriculture - OECD

Higher global food prices could make farms more productive in Africa, where economic growth should accelerate this year, the Organisation for Economic Cooperation and Development (OECD) said yesterday.

"Higher prices in agriculture are actually a positive signal," said OECD economist Denise Wolter as the group presented its African Economic Outlook for 2008 in Berlin.

Over the short term, developed nations should provide aid to Africa to counter bottlenecks in food production, she said.

"But the higher prices are also providing incentives (for farmers) to produce more locally," said Ms Wolter.

The OECD forecast that growth in Africa would accelerate to 5.9 per cent this year from 5.7 per cent in 2007. The United Nations' Millennium Development Goals aim to halve extreme poverty by 2015, but Ms Wolter said that for this to be successful in Africa, growth rates of seven per cent or more in the continent would be necessary.

Ms Wolter said Africa had been profiting from strong demand for oil, the cost of which has also hit record highs this month.

The OECD forecast average economic growth among oil exporting nations in Africa would be 6.8 per cent in 2008, compared to 4.9 per cent among countries that import oil.

Ms Wolter said Africa had plenty of potential to make more effective use of its land, noting that agricultural productivity was about 30 per cent lower than in Southeast Asia.