Effects of climate change on agriculture in Africa

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Climate change is expected to make agricultural development in Africa more challenging. Weather patterns are becoming less favorable in many instances, increasing the volatility of crop and livestock yields. The frequency and/or severity of extreme events is increasing as temperatures are projected to continue rising, and rainfall patterns are expected to shift more than they have already (Exhibit 1).

Expected evolution of drought differs by region in Africa, with the most affected areas in the north and south.

Overall, Africa is vulnerable because for many of its crops, it is at the edge of physical thresholds beyond which yields decline. Moreover, a substantial portion of some countries’ economies (for example, one third of GDP for Ethiopia and one fifth of sub-Sahara Africa’s economic output) depends on agriculture. Finally, some aspects of adaptation may be challenging; for example, African farmers are generally more vulnerable to higher temperatures, fluctuations in rainfall, and variable yields than farmers in developed countries, who can usually more easily secure crop insurance, adjust what they plant, irrigate their fields, or apply crop protection chemicals and fertilizers.

An overview of the case study analysis

In Climate risk and response: Physical hazards and socioeconomic impact, we measured the impact of climate change by the extent to which it could affect human beings, human-made physical assets, and the natural world. We explored risks today and over the next three decades and examined specific cases to understand the mechanisms through which climate change leads to increased socioeconomic risk.

In order to link physical climate risk to socioeconomic impact, we investigated cases that illustrated exposure to climate change extremes and proximity to physical thresholds. These cover a range of sectors and geographies and provide the basis of a “micro-to-macro” approach that is a characteristic of McKinsey Global Institute research. To inform our selection of cases, we considered over 30 potential combinations of climate hazards, sectors, and geographies based on a review of the literature and expert interviews on the potential direct impacts of physical climate hazards. We found these hazards affect five different key socioeconomic systems: livability and workability, food systems, physical assets, infrastructure services, and natural capital.

We ultimately chose nine cases to reflect these systems and to represent leading-edge examples of climate change risk. Each case is specific to a geography and an exposed system, and thus is not representative of an “average” environment or level of risk across the world. Our cases show that the direct risk from climate hazards is determined by the severity of the hazard and its likelihood, the exposure of various “stocks” of capital (people, physical capital, and natural capital) to these hazards, and the resilience of these stocks to the hazards (for example, the ability of physical assets to withstand flooding). We typically define the climate state today as the average conditions between 1998 and 2017, in 2030 as the average between 2021 and 2040, and in 2050 between 2041 and 2060. Through our case studies, we also assess the knock-on effects that could occur, for example to downstream sectors or consumers. We primarily rely on past examples and empirical estimates for this assessment of knock-on effects, which is likely not exhaustive given the complexities associated with socioeconomic systems. Through this “micro” approach, we offer decision makers a methodology by which to assess direct physical climate risk, its characteristics, and its potential knock-on impacts.

Climate science makes extensive use of scenarios ranging from lower (Representative Concentration Pathway 2.6) to higher (RCP 8.5) CO₂ concentrations. We have chosen to focus on RCP 8.5, because the higher-emission scenario it portrays enables us to assess physical risk in the absence of further decarbonization. (We also choose a sea level rise scenario for one of our cases that is consistent with the RCP 8.5 trajectory). Such an "inherent risk" assessment allows us to understand the magnitude of the challenge and highlight the case for action. For a detailed description of the reason for this choice see the technical appendix of the full report.

Our case studies cover each of the five systems we assess to be directly affected by physical climate risk, across geographies and sectors. While climate change will have an economic impact across many sectors, our cases highlight the impact on construction, agriculture, finance, fishing, tourism, manufacturing, real estate, and a range of infrastructure-based sectors. The cases include the following:

For livability and workability, we look at the risk of exposure to extreme heat and humidity in India and what that could mean for that country’s urban population and outdoor-based sectors, as well as at the changing Mediterranean climate and how that could affect sectors such as wine and tourism.
For food systems, we focus on the likelihood of a multiple-breadbasket failure affecting wheat, corn, rice, and soy, as well as, specifically in Africa, the impact on wheat and coffee production in Ethiopia and cotton and corn production in Mozambique.
For physical assets, we look at the potential impact of storm surge and tidal flooding on Florida real estate and the extent to which global supply chains, including for semiconductors and rare earths, could be vulnerable to the changing climate.
For infrastructure services, we examine 17 types of infrastructure assets, including the potential impact on coastal cities such as Bristol in England and Ho Chi Minh City in Vietnam.
Finally, for natural capital, we examine the potential impacts of glacial melt and runoff in the Hindu Kush region of the Himalayas; what ocean warming and acidification could mean for global fishing and the people whose livelihoods depend on it; as well as potential disturbance to forests, which cover nearly one-third of the world’s land and are key to the way of life for 2.4 billion people.

In this case study, we focus on major crops in Ethiopia and Mozambique (See sidebar, “An overview of the case study analysis”). Using crop yield models, we assess the expected impact of climate change in 2030 on wheat and coffee in Ethiopia and on corn (maize) and cotton in Mozambique. It is important to note that Africa is a climatologically diverse continent and that the results presented here are not representative of the challenges or changes faced by other African nations. Climate change will affect some regions of Africa more or less than it affects Ethiopia and Mozambique.

By 2030, Ethiopia may face significant volatility in coffee yields while Mozambique may face greater volatility in corn production

While volatility is often symmetric, meaning positive and negative shocks are roughly equally likely, we find that the overall effect of increasing volatility is negative. Farmers and other players in the value chain usually do not fully capture the benefits from good years due to a limited ability to sell bumper harvest into shallow local markets, absence of storage infrastructure to smooth supply over many years, and poor transportation infrastructure that makes sale into other markets difficult. At the same time, a bad year can have longer-lasting effects for farmers. For subsistence farmers, they may for example have to go into debt or not be able to service existing debts.

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We find that by 2030, Ethiopia’s wheat farmers are projected to face an 11 percent greater likelihood than today of a 10 percent or greater drop in annual yield. For coffee farmers in Ethiopia, the chance of experiencing a 25 percent or greater drop in annual yield could climb from 3.2 percent to 4.2 percent in 2030, which is a 31 percent increase, and a 28 percent cumulative likelihood over the next decade. Should yield shocks of this magnitude take place for both crops in the same year, we estimate that Ethiopia’s GDP growth rate would be cut by approximately three percentage points (Exhibit 2).

The effects of climate change on African crop yields in 2030 are projected to be uneven.

In Mozambique, we find a large seasonal loss (more than 30 percent) of the corn crop is expected to go from a highly improbable event to a 100-year event. We estimate that a 25 percent or greater drop in corn yields would reduce Mozambique’s GDP by 2.5 percent. Conversely, we find that cotton yields would become more stable; however, given the small size of cotton farming, this does not provide a strong counterbalance to the negative impacts on corn.

What can African farmers do to mitigate the impact of climate change?

Higher volatility in the yields of major African food crops is likely to result in higher price volatility for both farmers and consumers. African countries are already working to counteract growing volatility, but better and more localized planning and financial mobilization will be key.

Modernizing Africa’s agriculture in the face of a changing climate will require significant investment. Investments in irrigation can increase the likelihood that farmers maintain yields even when the weather is unfavorable. Better roads can help connect markets, which would help farmers sell their crops at fair prices. Improvements in the functioning of seed production systems would provide farmers with new varieties of seed that are suited to new conditions. Upgraded crop-storage facilities would prevent spoilage and food waste.

Climate change’s varying effects on regions and crops underscore the importance of targeted planning on the part of governments, investors, and international donors. Today’s planning models have difficulty accounting for these effects. First, published projections of climate change’s impacts typically focus on 2050 or 2100—too far out to aid nearer-term decisions. Second, climate and economic models that focus on local contexts are less common than broader models. We believe that governments, companies, development banks, donors, and other organizations stand to benefit from bringing highly localized, commodity-specific forecasts into agricultural planning in Africa.

Wider access to agricultural financial instruments, such as crop insurance, would enable individual farmers and households to better manage climate-related risks. However, expanding crop insurances may require support, because most farmers are not able to pay the full premium.

Overall, successful adaptation may depend primarily on changes in farmers’ behavior (for example, use of improved inputs such as fertilizer and better seeds), institutional improvements (for example, localized, commodity-specific forecasts), as well as the collaboration of affected stakeholders on certain adaptation measures (for example, to solve storage issues).

For additional details, download the case study, How will African farmers adjust to changing patterns of precipitation? (PDF–2MB).

About this case study:

In January 2020, the McKinsey Global Institute published Climate risk and response: Physical hazards and socioeconomic impacts. In that report, we measured the impact of climate change by the extent to which it could affect human beings, human-made physical assets, and the natural world over the next three decades. In order to link physical climate risk to socioeconomic impact, we investigated nine specific cases that illustrated exposure to climate change extremes and proximity to physical thresholds.