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Tuesday, October 14, 2014

Moribund rural economies could undermine Africa rising momentum

In 2000 The Economist magazine painted the portrait of a continent riddled with corruption, ravaged by conflict, poverty, debilitated by hunger and disease. Africa was ‘The Hopeless Continent’. But in 2011, with a cover titled ‘Africa rising’ and an illustration of a boy flying a rainbow-colored kite the shape of the continent, The Economist magazine released a revised edition of Africa.

In the revised edition The Economist magazine wrote not about the abundance of brutality or disease or poverty in Sierra Leone. The revised edition was about the pulsating Onitsha market in Nigeria, with shops stacked high with goods and streets jammed with buyers and sellers. It was about Africa having a real chance to follow in the footsteps of the Asian tigers.

The Economist’s Africa rising saga was preceded by Lions on the move: The progress and potential of African economies, a 2010 McKinsey Global Institute (MGI) report on Africa. The report showed that the year 2000 was an inflection point, heralding Africa’s growth acceleration with 27 of its 30 largest economies expanding more rapidly after 2000. MGI projected that services and products industries, agriculture, extractive resources and infrastructure could generate $2.6 trillion in revenue by 2020.  

In 2012 TIME, with an ‘Africa rising’ title of its own, described Africa as the “world’s next economic powerhouse”.  But it cautioned that hundreds of millions were at risk of being left behind. Similarly, in its Africa rising story, the Economist warned that optimism about Africa must be taken in small doses because things remained exceedingly bleak across the continent. 

That African economies are on the upswing is undeniable. The cities are throbbing. The energy and the hustle and bustle in the streets of African cities is tangible. Perpetual traffic gridlock, chronic water shortages, and eruption of informal housing in a majority of African cities, underscores the fact that growth has outpaced the capacity for planning and management. But there is some hope. There is infrastructure frenzy across many African cities – elevated highways, ring roads and by pass corridors are under construction – especially to deal with traffic congestion.

But something else is happening. The rural economy is pretty stuck. The intensity of rural poverty has not eased. Rural economies are predominantly sustained by remittances from the cities. Rural infrastructure is in a veritable state of decline. Agriculture is comatose. Land values are lowest in rural Africa. And for the most part, most rural landowners do not have land title deeds or proof of property ownership. So land is essentially dead capital. The returns on labor and land are too low. Women, who often lack the power to make critical decisions about land operations or choice of crop or use of technology, manage agriculture.

Moreover, the burden of disease is highest in most of rural Africa. Infant and maternal mortality are highest in rural Africa. The prevalence of stunting and other nutrition related problems are highest in rural areas. It is not surprising that rural districts have the worst education outcomes. For example, only 16 percent of Kenya’s rural population has post-secondary education. Enrollment, retention and completion rates in rural schools are deplorable. Numeracy and literacy scores among children in rural schools are consistently lower than for children in urban schools. Teacher absenteeism is worse in rural schools compared to urban schools.

Africa’s growth is really a tale of two economies. The first economy is the vibrant, pulsating urban economy. What happens in this economy is what feeds the Africa rising hysteria. Urban areas are home to the emerging middle class, which has got the global services and products aficionado all excited about Africa’s emerging consumer market.

The second economy is rural. It is largely characterized by socio-economic stagnation and decline. Over 50 percent of Kenya’s rural population lives below the poverty line, compared to 33.5 percent in urban areas. Only 3 –10 percent of Kenya’s rural population works for pay. Describing his community, a young pastoralist from northern Kenya wrote: “The youth in my community are idle and mostly indulge in reckless consumption of alcohol. Teen pregnancies are rampant and young men marry too early.

Inclusive growth and shared prosperity will depend on adoption of pro-poor policies and public investment aimed at agriculture and rural infrastructure. Things will remain exceedingly bleak as long as over 75 percent of Africa’s population is not implicated in the Africa rising saga.  

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