Monday, 31 March 2014

Retelling the tale of "two-speed economies" - inclusive growth imperatives

Picture of Zimbabwean children working in a field
by Mabel Hungwe
Trustee, Barefoot Education for Afrika Trust
One third of the world's people depend on small farms for their livelihoods. This is a key development statistic. Inclusive smallholder agriculture driven growth should be a central part of our development priorities. Africa has experienced trends of impressive economic growth, improved governance and improved human development over the past decade. 

However, the pace and pattern of recent growth in Africa has not delivered the jobs and poverty reduction that Africa has been seeking. Africa's rural communities have been left behind in its “positive” economic growth. 

This is the “two-speed” economy tale told by the McKinsey Global Institute in a Mexican report titled "Growth and prosperity in a two-speed economy." The report shares how Mexico, a modern, fast-growing economy, with globally competitive multinationals and cutting-edge manufacturing plants exists amid a far larger group of traditional  enterprises that really do not contribute to growth. You can read the McKinsey report via this link

After reading this report, I got interested in unpacking the black box of the disparity between the developed minority and underdeveloped majority, I began to study more about Mexico. I learned that, in the rural areas of Mexico, 61% of people lived beneath the national rural poverty line in 2010, according to World Bank data. Given that the country’s rural population was estimated at about 25 million, this means that more than 15 million people in those areas were living in poverty.
A picture of a Zimbabwean farm worker in a Rose greenhouse
Picture also by Mabel Hungwe

I related this story to our homeland Africa, where we are similarly going through a trend of “two-speed” economies. Therefore inclusive growth is an imperative... not just for Africa... It is an imperative, no matter where in the world you are!

Last year I was working in an African agriculture organization. It so happened that one of our experts was engaged to assist in developing an issues paper for a renowned annual African agriculture event. 
Inclusive growth is an imperative... not just for Africa... It is an imperative, no matter where in the world you are.
It is at this time that I began to dig deeper into the world of "inclusive" economic growth and development. I came across a variety of materials, interacted with a variety of scholars and researchers, networks and platforms such as the Africa Green Revolution Forum (AGRF), The World Economic Forum and the Barefoot Education for Afrika Trust (BEAT).

In a nutshell, this is why Inclusive growth is an imperative for the African century:

Africa and other developing regions have millions of smallholder farmers who are settled on some the world's scarce arable land. These are potential producers to feed the world. Africa also has millions of youths with untapped innovation potential as entrepreneurs to drive the emerging food markets. With a growing population, Africa carries billions of people who are huge consumer market.  

Given Africa’s unique resource endowments and demographic features, inclusive, innovative, smallholder-centered business models are the entry point to the transformation that Africa is seeking.

The future of African agricultural development means making rural farming and entrepreneurship broader, deeper and stronger; also creating more economically viable non-farm activities linked to the growing rural farm activities to meet the emerging demands of a changing population.

Africa's Bottom of the Pyramid have the will, the qualities, the opportunity  to “lead” development in Africa as long as the right incentives are in place. 

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