 I'll be following on Philip's discussion, taking a little bit maybe from where he left about the role of agriculture in growth and how we manage to growth process. I'd like to start with the outline of growth and structural transformation in African economies, the role of agriculture therein, and I look a little bit further in depth in terms of the patterns and quality of structural change that brings me down now to how we would like to manage the structural transformation process itself into the future, and here I focus on agribusiness value change because agriculture really has gone now beyond what we used to look at as a farm base to a more, you know, a more further transformed set of different segments that links all the way across the value chain. So we will miss, I think, targeting our policies if we just focus on agriculture as we know it traditionally. Then I look at what it implies for industrialization strategies because the new farming environment includes the rapidly growing processing sectors. I've got a couple of key messages which perhaps could help us focus and maybe create a storyline as I go through my slides. There are two distinct phases of structural transformation. If you look at Africa over the last few decades, all the way up to the 20s during the face of economic stagnation and decline, we would nest what I think hasn't happened anywhere else, productivity reducing structural change, and I'll clarify a little bit what it means, but with the recovery that started over the last couple of decades, we have had a strong positive structural change during the recovery years, meaning productivity raising structural change as it happens in normal economies and how it should be expected to be the case. In that process, especially between independence and the late 80s, early 90s, we witness a very, very rapid decline, and rapid means relative to what we've known in history from other economies, rapid decline of agriculture during the decades of slow growth, what I call the standing of agriculture. That was accompanied at the same time with a very rapid expansion of the informal goods and services sectors. You look at the macroeconomic account on an average African economy today, the services sector is above 50% or 50 to 60% sometimes, which is actually what you would expect in a mature economy, not in the economy at the level of development in African countries. The consequence is that the informal goods and services sector, which include the artisanal and informal processing of traditional staples, is perhaps now the largest pool of low productivity labor. That's where you can focus and raise rapidly incomes and productivity across the economy. But what that means for African countries is that the traditional dual economy model, agriculture versus industry, perhaps might not really apply any longer because of the size of the informal goods and services sector with its pool of low productivity labor. So a three-dimensional model of industrialization, including agro-industrialization, modernization of farming and what it implies for labor and other factors might be required. So first, the growth and transformation process. Countries become rich by producing more output per given worker as they grow. And this involves producing more of the same goods or more importantly, producing a larger basket of higher value goods. Countries also becomes richer starting from agriculture and moving to an urban base and industrial base. While they are doing that, as a government, other managers, one faces a double challenge. First, raising productivity in agriculture, in the rural economy, while diversifying into higher value goods outside of agriculture. During that process, labor productivity can grow using basically two different angles or through two different forces. Wider, I'm sorry, within sector growth where you get more output per worker inside the same sector from innovation and investment in production factors, all labor moves from lower productivity into higher productivity sectors driven by incentive structures and policies in the government. Both give you a higher overall labor productivity for the economy. An example of how that would work, here you have a graph of African economies as of 2010. The red line is the economy-wide labor productivity put at 100%. You see agriculture is about one third of that 35% of the average productivity, but it accounts for more than 60% of labor. And the next in terms of productivity is personal services at 69%. You move to trade services at 111%, a little bit above the average productivity. If labor moves from the left from agriculture to the right with nothing else happening, actually you raise average productivity. That's where social change, social transformation comes in to raise productivity in the economy. Now, what is the role of agriculture in that transformation to bring us closer to our discussion here? As economies grow, of course we know you move from the left to the right of the horizontal axis from low to high per-income capital, agricultural GDP grows absolutely, and agriculture GDP for work also grows in crisis. So you're raising the size of the agricultural sector in absolute terms and the productivity. However, as the economy matures, you'll see a shrinking share of agriculture in employment and a shrinking share of agriculture in GDP. When Philip was talking about people not being interested in agriculture in the early 60s when African economies turned around from colonization to independence, even in the profession, it wasn't really clear the role that agriculture will play in the transformation process that we just talked about because it's a shrinking sector you see from employment to GDP shrinks. But what's important and really important for African countries for our discussion is that as the economy is mature and the share of employment goes down and the share in GDP goes down, what's important is how these two curves behave. The sooner they converge, the faster the average income in agriculture becomes equal to the average income in the economy. Basically you're raising people out of poverty because you're making people in the rural areas, especially people who depend on agriculture much more closer to the average level of income. So the next I will show you is just look at over the last 40, 50 years before the recovery, how did these two lines behave in Africa? The closer they got, the more income in the rural areas in agriculture has tended towards converged towards the average income in the economies. And if you look at it, there was just really no movement between the two lines. The red lines here is the difference between the two. So there was no transformation going on that converged or broad convergence between incomes in agriculture towards income in the rest of the economy. Agriculture was not creating the wealth that we needed, it was not contributing to greater equality in the economies. And that's because the structural transformation process just did not work. So now let's dig a little bit deeper in there. I said earlier that structural change, which is how productivity grows across the economy and what the factors are behind it, as the economy changes its own structure dynamics between sectors, we have a within sector growth, as I said, and a structural change component. And often it's really estimated with a very simple decomposition of growth productivity. Here you have what we call the within sector component, which is basically the change in productivity of the given sector weighed by the share of labor. And the structural change component is the change in share weighted by individual sector productivity. And let's see how that behaved in the African economies and why we had zero movement really in agriculture. Here is Africa competitor, the other economies, basically productivity in general was negative and driven primarily by the negative contribution of structural change. What it means is that labor has not moved from lower productivity into higher productivity sectors in general. And why didn't that happen? That's because a stagnating agriculture sector, which still did a little bit better in terms of productivity, saw a rapid decline in labor that went into a slower and a lower productivity sector here, which is a non-agriculture sector. So labor was going from agriculture, which was doing better, going into a non-agriculture sector, which is not doing better. We all remember the literature of the 70s and 80s, the worry about rural to urban migration. You remember in the 70s, not 70s, maybe 80s and 90s, driving across Africa, seeing people setting a couple of candles here or a match there, or a little tiny piece of souvenir. Those were the people who were living in the rural areas. They were making less in the urban areas that they would have made in the rural areas. So labor was just leaving a more productive sector into a less productive sector and therefore pulling down productivity in general. That's why you saw here the negative contribution of structural transformation of labor movement contributing to productivity growth. And this happens because the non-agriculture sector primarily consisted of that informal goods and services sector that wasn't bringing in terms of productivity, what agriculture was bringing. Now somebody would ask them why would they move into there, right? It's expectation aspirations, but also the desolation of the rural areas. People are moving into the urban areas hoping to find better living conditions, access infrastructure, maybe to social services. But once you're there, you may discover that selling a match a day is not going to carry you through the night, but you don't go back to the rural areas. So that's where we were during most of the decades after independence. Now after the 2000s, since the mid 90s, African economies have recovered strongly. We can discuss later what the reasons were. But in average over the last 20 years also African economies actually did better than bricks in the world average in terms of agricultural value added growth, in terms of food production, and in terms of national incomes. This is the first time in history that you have a large number of countries growing at a high rate in a sustained fashion relatively over two decades. It never happened before and we can discuss why it happened. But let's move and look at what happens during those two decades. African governments have almost doubled annual investment in agriculture. Philip was just talking about how about only 10 or a few of them met the 10 percent agriculture budget share of the African Union Commission. This because of a role budget outlets just exploded in the aftermath of the social adjustment programs where there was so much need for investment in health, in education, social service, and so on. So a lot was invested more. But in absolute terms, countries made a lot of efforts and almost doubled expenditure. And agricultural gross domestic product itself grew by two thirds between the 90s and the 2000s. And during that area now, what do you see? African economies now started behaving like normal economies. Within sector productivity growth increased substantially and cross sector, which is really not a good term. I prefer structural change contribution also increased quite a bit and became positive. So suddenly African economies are now behaving like a normal economy. However, and this is where I would like to make the transition, in most economies you will see that during the face of gross, manufacturing will shoot up quite rapidly. It didn't happen in Africa. It is a service sector that shut up quite rapidly. And this service is really informal goods and services sector while agriculture declined here. Agriculture declined very rapidly. The services sector in terms of GDP and in terms of employment agriculture very rapidly and the informal goods and services sector. This is actually what the five decades of stagnation have produced. And you look at the services sector, it is actually the lower productivity segment that grows the fastest. That is the dotted green line in the middle. So you have a large sector which is capturing all of the energy of the economy. And that's because the decline and the stagnation of the 70s, 80s and 90s have created a whole new structure. You remember me talking about the beginning, the fact that the dual economy model really wouldn't work any longer because of the size of the informal goods and services sector. That's why we have to focus in terms of modernizing and transforming the African economies. And that's what I will do next. What do we have in that informal goods and services sector? Which accounts for 50 to 6 percent of most African economies. As I said, it is the largest pool of low productivity labor. It includes a large share of what I call the protein industrial handicrafts and processing, wood, leather metals, small mechanical parts, and I end up with food staples processing because that's what I would like to focus on. So transformation of agriculture really includes that food processing sector. Now, as I said earlier, if you have a condition where the dual economy model of industrial policy based on agriculture versus industry, which becomes almost inapplicable in Africa, it is also agriculture, services, and industry that we have to look at. This is trying to be emotional. I talked about it already. I don't want to go more into that since time is running. But there are three things that needs to happen for the agribusiness sector, which is going to be stimulating farming growth from now on in Africa, and you'll see why. Policies for transformation will have to focus on three things, product sophistication, firm maturation, enterprise growth, and let's look at what's happening here. By 2040, less than a third of the traditional staples in Africa will be consumed in non-processed form. More than two-thirds, whether you're talking about perishable or non-perishable, will be processed. That is a huge opportunity if you can maintain African enterprises to grow and claim that part of the urban demand that is going to be in the processing industry. Let me give you the example of millet, and I'll tell you why it's important. Back in the 70s, when I was in high school, you had to live in a village where women can go, household members can go to the farm, harvest the millet, take it to a mill, and come home and process it into something that you could eat, different dishes. Today, you go to a supermarket, you get ready to cook products from small enterprises, that's how the value chain for millet has changed, to produce, to cook the meals if you want, so ready to cook products, to cook the meals, or you can skip all of that and go and have ready-to-eat products. Now, the reason why I'm saying is that the traditional agricultural sector, now the millet, which used to be in the village level, where you go to the farm, pick stuff, mill and eat, is no longer, if you want a modernized millet, you don't focus on that. You look at all of these things now. But this is also important why the ready-to-eat and the ready-to-cook products are driven by tens of thousands of very small enterprises, one to two to three people who do that. And they are linked to the millet producers. If you can help this part of the economy grow and create jobs and expand, then you also stimulate transformation in the millet sector. The same thing applies in Cassava, the same thing applies to white maize, male, the same thing applies to different Ethiopia. Across Africa they spell the staple sector is modernizing rapidly. It's no longer the traditional sector that we need to know. Now quickly, what do you need to do then? Those companies that are putting out those process products that I talked about are all small. They do the same technology, the same products, targeting the same consumers. The technology is very simple, so it's being copied very rapidly. So the numbers are just exploding. What it does is that profit is going to be falling quickly. And when product falls, they're going to exit. You will never have the growth you need in the sector. So what do you do? Just three things. You have to bend the curve of the numbers of firms to reduce the number by creating an environment where the fittest will survive and thereby you raise productivity. When you do that you allow some firms to emerge, to grow, to create jobs and then come in a position where they can compete with foreign suppliers as they come in to fight for the same urban markets. To do that you need three things. Madam Chair, I'll complete with that. So process and product innovation. You need market development and you need cost of services and infrastructure access. So this is power, telecom, transport, but I'll focus more on vocational training because you wanted me to talk about labor and I'll stop at that one. Labor policies require that you have the opportunity to upgrade skills and to develop skills not just for farmers but also for the emerging processing sector. Currently the absence of professional and vocational training opportunities mean that you have no skill upgrading for existing smallholder farmers, no skill development for emerging value chains, professions, machine operations, machine maintenance, processing technology skills, product and process innovation, management and sales, packaging and distribution, food quality and the like. I'll stop here and in the discussion Madam Chair, I mentioned the others, but in terms of labor this is really where we would like to focus on and across Africa there's almost no country doing that right now. So this is perhaps for wide as well a place to look into in terms of research.