Are Biofuels Good for African Development? An Analytical Framework with Evidence from Mozambique and Tanzania

Posted on April 30, 2011

Many low income countries in Africa are optimistic that producing biofuelsdomestically will not only reduce their dependence on imported fossil fuels, but alsostimulate economic development, particularly in poorer rural areas. Skeptics, on theother hand, view biofuels as a threat to food security in the region and as a landgrabbingopportunity for foreign investors. As a result of this ongoing debate, nationalbiofuels task forces have been asked to evaluate both the viability of domestic biofuelsproduction and its broader implications for economic development. To guide thesecomplex evaluations, this paper presents an analytical framework that prioritizes different aspects of a comprehensive national assessment and identifies suitableevaluation methods. The findings from recent assessments for Mozambique andTanzania are used to illustrate the framework. While these two country studies foundthat biofuels investments could enhance development, their experiences highlightpotential tradeoffs, especially at the macroeconomic and environmental levels, wherefurther research is needed.

Arndt, Channing, Msangi, Siwa and Thurlow, James, (2010), Are Biofuels Good for African Development? An Analytical Framework with Evidence from Mozambique and Tanzania, Working Papers, World Institute for Development Economic Research (UNU-WIDER), http://econpapers.repec.org/RePEc:unu:wpaper:wp2010-110.

Read the rest of the working paper by downloading the PDF: Are Biofuels Good for African Development? An Analytical Framework with Evidence from Mozambique and Tanzania.