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Sunday, January 5, 2014

Africa's Youth and Rural Farmers Key to Inclusive Growth

Sub-Saharan Africa’s economies are growing at more than twice the pace of economies of any other region, except China. But Africa’s growth has produced less than a trickle of good fortune for hundreds of millions of Africans who cannot find work.

One in four Africans are hungry. Recent estimates show that the number of people living in extreme poverty in Sub-Saharan Africa has increased. Despite high GDP growth, hundreds of millions of Africans are hungry and malnourished. Between 2010 and 2012, the number of hungry Africans grew from 175 million to 239 million, with nearly 20 million added in the last few years.

In Kenya, it is estimated that less than 7 percent of the nearly 800,000 young people entering the job market annually can find decent wage paying jobs. Moreover, less than 15 percent of Kenya’s 14.3 million people in some form of employment are engaged in the modern, formal sector of the economy, i.e., agribusiness, services and industry.

In 2014, Kenya’s policymakers should make equitable economic growth and creation of high quality jobs for a major priority. To be successful, economic growth strategies and employment opportunities must be designed and calibrated to respond to Kenya’s unique circumstances; a youthful and a predominantly rural population.

Creating opportunity for the youth must begin with how we educate our children. Education in this country is a protracted process of university entrance. This is wrong. Our school system designates as failures too many creative and talented kids who do not enter university. But the irony is that college degrees are not worth much, especially in this economy. A majority of fresh graduates are “hustlers”. Moreover, potential employers think most of our college graduates are not work ready. 

We must re-think our education system and invest in high quality early childhood education, a primary school system that encourages and nurtures the creative instincts of children. We must discard the current system, which privileges memorization and regurgitation. Our secondary school system must lay the foundation for learning to learn. Vocational and tertiary education must produce problem solvers who are capable of complex reasoning, life long learners and creative innovators.

About 70 percent of Kenya’s population lives in rural areas. A majority of this population is self-employed smallholders engaged in subsistence crop production, fishing or pastoralism. Decades of underinvestment in research, extension, rural infrastructure, financial services, and weather information have led to inexorable decline in productivity and left a majority of Kenya’s rural population outside the mainstream economy. Consequently, agriculture’s share of GDP has declined from 88 percent in 1960 to 25 percent in 2012.

The minders of our economy are under the illusion that investing in legacy mega projects like massive irrigation, highways and railway lines alone will deliver sustainable and shared economic growth. Among policy makers in this government, just like the previous three the role of smallholder agriculture is nebulous and often misunderstood.

Agriculture is more than just crops and food. A one-dollar increase in exports of green coffee from Costa Rica generates an increase of USD1.18 in family income. In comparison, each dollar transferred to Costa Rican households produced only USD 0.99 of value added. Agriculture has considerable multiplier effect in the wider economy. A multiplier is a measure of the relationship between an initial increase in spending in one sector of the economy and the total increase in spending in all sectors of the economy, owing to the initial increase.

Recent studies cited by UNEP and International Fund for Agricultural Development (IFAD) show that a 1 percent increase in agricultural per-capita GDP has five times the impact on the poverty gap than the same increase in GDP in other sectors. Other studies have shown that for every 10 percent increase in farm yields, there was 7 percent reduction in poverty in Africa.

Studies have shown that agriculture promotes the inclusion of rural communities, especially the poorest. Agriculture has been identified as an important supplier of inputs and a generator of value added that plays a key role in the distribution of the income between urban and rural regions.

Youth unemployment and grinding rural poverty are the defining challenges of our time. Investing in the youth and rural farmers offers the best pathway to achieving inclusive and socially sustainable economic growth. Investing in our youth and rural development is smart economics. It is also a moral imperative.

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