Africa’s economic performance in the last
two decades has been impressive. Leaders of multinational corporations and
development bureaucrats have proclaimed the irreversible march of prosperity. But
Africa’s path to durable and inclusive prosperity is far from certain.
Many economists and development experts
believed that Africa’s most promising path to growth would be through
modernization of agriculture and the advancement of rural prosperity. Many,
including myself have argued that harnessing the combination of vast land
resources and the abundance of rural labor would lay a most durable foundation
for inclusive growth and economic transformation.
Imagine the eruption of agriculture-based
cottage industries, which in turn spur increased productivity and value
addition while attracting requisite enabling investment in services and
infrastructure. I am talking about water and sanitation, financial services, health
centres, electricity, broadband Internet, roads and railways.
Africa’s growth has been impressive and the
continent has shaken off the stigma of squalor and deprivation. But such growth
has not spread beyond the clutch of economically dominant minorities and the
precincts of major urban neighborhoods. For all intents and purposes, Africa’s
rural economies are comatose. The tragedy is that this is where a majority of
Africans are born and live.
A majority of these rural Africans practice
subsistence agriculture. They keep livestock and grow crops, mainly for
subsistence. In many rural African communities cattle is not reared for beef or
hide. Cattle are kept as fungible capital assets. Many cleaver things have been
said and written about why Africa’s agriculture is shackled by low productivity.
What is tragic is that so little has been done, based on these cleaver
diagnoses, to increase the productivity and profitability of Africa’s
agriculture. My view is that we don’t have the right diagnoses.
How one might think about Africa’s growth
and shared prosperity is so different today than it was 20-30 years ago. A path
of inclusive growth and prosperity predicated on mass employment through
industrialization and agriculture is pretty unlikely, thanks to globalization
and large educated youthful population.
The emergence of China and other countries
like India, Mexico, Indonesia, Turkey and Brazil as industrial powerhouses has made
improbable Africa’s path to industrialization. African economies have been
turned into warehouses and consumer destinations for cheap manufactured goods.
A fairly sophisticated service economy is emerging to support this veritable
trend of de-industrialization.
Take a walk downtown Nairobi and you will
encounter a staggering density of retail shops. Our roads, streets and alleys
are chocking with merchants who brave the sweltering heat, dust and foul air to
sell Chinese toys, razor blades, clothes, watches, cheap art, groceries and
mobile phone accessories. The business of building and renting warehouses is both
booming and lucrative. What used to be Nairobi’s industrial area is now
warehouse central.
Agriculture is unlikely to drive meaningful
growth. FAO estimates that the average age of the African farmer is about 60
years. A study by the East African Institute of the Aga Khan University
revealed that only 11 percent Kenya’s youth would prefer to work in
agriculture. Interest in farming was negatively correlated with educational
attainment. Moreover youth below the age of 25 years were least interested in
farming. Emboldened by high education and enticed by the glamour of urban living
the youth are city-bound and find low paying jobs in the service sector more
appealing than working the land.
Today a large number of African countries are
largely agrarian, but characterized by rapid urbanization, a well-educated
youthful population, a trend of de-industrialization (thanks to globalization),
a weak modern economic structures and primordial democracies. It is not
surprising that a majority of the so-called development experts get Africa wrong.
The content is replete with failed projects.
The structural transformation models of the
past century focus on the mechanism by which underdeveloped economies transform
their domestic economic structures from a heavy emphasis on traditional
subsistence agriculture to a more modern, more urbanized, and more industrially
diverse manufacturing and service economy. Such simplistic staging of
development is irrelevant for 21st century Africa.
In my view African scholars lack the
conceptual apparatus with which to define generalizable theories to guide
economic growth, which take into account Africa’s unique contemporary context. Many
intellectuals, including myself have argued for structural transformation for
Africa. However, the transformation must be integrated and capable of simultaneously
leveraging agriculture-based rural economies, educated youthful population,
urbanization and the emergence of a strong service sector.
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