Nigeria rebased its national accounts and doubled
the size if its economy. With a GDP of $510 billion Nigeria soared past South
Africa, which has a per capita GDP that is nearly three times larger. Similarly,
Ghana rebased its national accounts in 2010
and expanded its GDP by 60 percent.
But Boko Haram rained on Nigeria’s parade,
bringing into sharp focus the paralyzing incapacity of the Nigerian state.
Moreover, GDP size is just a meaningless statistic for a vast majority of
Nigerians when the country ranks 153 out of 187 in the United Nation’s Human
Development Index. Youth unemployment has reached crisis proportion. In March,
a stampede among jobseekers taking recruitment test at a stadium in Abuja left
many dead and scores injured.
Following the example Ghana and Nigeria,
Kenya plans to rebase its national accounts. It is important to rebase national
accounts regularly to reflect the evolving structure of the economy. Although
rebasing Kenya’s accounts could make it a middle-income economy, life for
ordinary Kenyans will not get better merely because ours is a $50 billion
economy. Despite having much lower GDP, Tanzania and Uganda have a lower
proportion of their citizens living below the poverty line.
Achieving durable and equitable economic
growth is the most urgent social and political challenge facing Africa today.
Sub Saharan Africa is consistently the least successful region of the
developing world when it comes to harnessing economic growth for poverty
reduction. In contrast, rapid aggregate GDP growth in Southeast Asian has been
accompanied by impressive poverty reduction. For instance, according to data
published by UNDP 60 percent of Indonesia’s population lived below the poverty
line in 1970. Today, according to government statistics, only 12 percent of
Indonesians live below the poverty line.
The development trajectory of many Asian countries is
viewed as a success, whereas that of many sub-Saharan African countries is
considered a failure. But Africans are becoming increasingly impatient with the
fact while GDP growth is soaring poverty remains unyielding. I have argued in
this column before that Africa’s economies are growing on quick sand because we
have not laid the foundation for inclusive,
transformational and durable economic growth.
In his opening remarks at the, 50th
Annual General Meeting of the African Development Bank Donald Kebaruka observed
that Africa must advance beyond preening itself on high GDP growth and focus on
economic transformation. Speaking at the same meeting World Bank Vice President
Makhtar Diop observed that such annual meetings should be used for reflection
on what must be done for the continent’s true emergence, with Africa’s people
benefiting from shared growth.
Like Africa, most of Southeast Asian
countries have a colonial history, during which period subsistence agriculture
and export of raw commodities were the mainstay of the economy. I think we have
much to learn from Southeast Asian countries. We have much to learn not just from
their recent economic growth buttressed by rapid industrialization but also
from the policy choices that caused their economic growth trajectory to diverge
radically from Africa’s starting from the late 1970s.
A recent policy brief, Policy for development in Africa: Learning from Southeast Asia, published
by Africa Power and Politics in collaboration with Tracking Development argues
that while immensely critical, sound macro-economic management is not
sufficient to deliver inclusive and transformative economic growth. The authors
of the policy brief observe that inclusive growth and poverty alleviation
depends on adoption of pro-poor policies and public investment aimed at
agriculture and rural development, which raise the productivity and
profitability of smallholder agriculture.
Smallholder agriculture supports the livelihoods of 80 percent of the Africa’s
population, provides employment for about 75 percent of Africa’s largely rural
population. Africa’s
economies are not firing on the vital cylinder, small-scale agriculture.
Limited public investment exacerbates rural poverty, food insecurity and
inequality. Africa’s ubiquitous poverty and the stagnation of rural economies are
easily explicable when you take into account the dire state of agriculture.
Africa’s soaring growth failed to lift millions out of poverty. The economic growth trajectory of Southeast Asia offers
vital lessons for Africa. To achieve economic growth that drives industrialization
and massive poverty reduction Africa must build vibrant rural economies through
large public investment in smallholder agriculture. A Vibrant agriculture-led rural
economy will reduce rural poverty, undergird political stability, encourage
private saving and investment, stimulate domestic markets, and provide cheap,
reliable food supply for urban-based industrial workers.
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