Nepad: Economic transformation major dev’t hurdle in Africa

By Judith Akolo

Nepad Agency has warned that meaningful economic transformation remains a major development challenge in Africa.

Speaking at the 2nd Africa Rural Development Forum in Yaounde, Cameroon, the head of programs at the Nepad Agency Estherine Lisinge-Fotabong said Africa’s high economic growth rates have not translated into high levels of employment and reductions in poverty for the youth and those in the rural areas of the continent.

“We now know and believe that Africa’s fight against poverty, hunger and unemployment will be won or lost in rural arrears,” she said and added, “And that is what frames the rural transformation strategy and agenda for Africa.”

Saying that rural areas hold 63% of the population with 73% of the poor living in rural areas the rural areas remain underdeveloped hence the push factor for youth seeking better lives in the urban areas.

“Even with rapid urbanization, more than 50% of the poor will be in rural areas by 2035, and depend significantly on agriculture,” she added.

She said the African Union Commission and NEPAD Rural Futures strategy and agenda for Africa is about driving every nation and the continent towards full employment in both rural and urban areas.

Noting that the rural areas are lagging behind, Fotabong said “governments have to realize that the only way to break the structural dualism is to re-direct the whole national economy to drive the rural economic transformation.”

The head of programs said poverty in Africa is substantially higher and more highly feminized than in other developing regions.

“The share of the population living below the poverty line of US$ 1.25-a-day threshold is as high today, at 50 per cent, as it was in the 1980s,” she said and added, “With 1 billion people in Africa today and 2.3 billion people projected for 2050(1) the continent’s greatest asset, or potential risk in the coming decade, will be in its capacity to harness this rapidly increasing reservoir of human capital.”

Fotabong said, with out a growing domestic market in terms of ever-growing numbers of rural and urban people whose income is growing, “then it is difficult to escape structural poverty through an outward looking economy,” she added.

She noted that the dualistic economy, low growth rates and an increasing equilibrium rates of unemployment and poverty that are deeper in rural areas coupled by the narrow domestic market base “means that countries have to depend on overseas development assistance (ODA), external financing and trade.”

She said limited economic convergence between rural and urban areas means that the product and factor markets are not integrated.

The head of programs at the Nepad Agency said the narrow domestic market translates into a narrow tax base and “therefore there is a limited capability and reach of the developmental state,” said Fotabong.

While warning that Africa is experiencing urbanization without generating job, Fotabong noted this was a contradiction since typically, urbanization should be a consequence of economic growth, not lack of it.

She called for the need to have the big push interventions saying that poverty and unemployment are not self-correcting situations, “unemployment and poverty are structural not temporary,” she added.

Noting that from evidence, literature, and international best practice, Africa is highly unlikely to escape the poverty trap by giving public expenditure priority to urban-based economic solutions such as import substitution industrialization, export-oriented industrialization and ‘open- economy’ industrialization, Fotabong said rural transformation be driven by the entire economy.

“There is need to: expand the domestic market; create backward and forward linkages within and between rural and urban sector; and pursue a multi-sector approach to rural transformation,” said Fotabong.




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