|Achieving inclusive growth In Africa: An agenda of The African Development Bank (AfDB)
|11 April 2013
Acknowledgements: Source: VibeGhana
'The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have little' - FRANKLIN D. ROOSEVELT
By Paul Frimpong, Associate Chartered Economic Policy Analyst- ACCE-USA
Although Africa is experiencing a tremendous growth rate and rated as the fastest growing continent in the world. A new economic growth momentum has been established. But what does this mean to the very people on the continent? What actually are the strengths and the patterns of growth on the continent of Africa?
Africa has recorded high rates of economic growth over the past decades; this growth has not been inclusive and has tended to exacerbate income inequalities. This growth has also been largely jobless and therefore associated with increasing unemployment especially among African youth. In addition, this growth has left out many already disadvantaged groups such as rural communities, women, traditionally marginalized people, etc. In short, growth in Africa has not been inclusive on the African continent.
The AfDB defines inclusive growth as an economic growth that results in a wider access to sustainable socio-economic opportunities for a broader number of people, countries or regions, while protecting the vulnerable, all being done in an environment of fairness, equal justice, and political plurality. The African Development Bank has strategized as part of their development agenda for the continent, the means of achieving what they call an inclusive growth and why various governments should endeavor to attain inclusive growth. This is because; it is through inclusive growth that the continent can reduce poverty to the minimum level. Inclusive growth would make the poverty reduction efforts more effective by explicitly creating productive economic opportunities for the poor and vulnerable sections of the society . It will decrease the rapid growth rate of poverty in a country and increase the involvement of people into the growth process of the country. The African Development Bank targeted inclusive growth as a strategy of economic development due to the rising concern that the benefits of economic growth have not been equitably shared. The whole strategy of the African Development Bank on inclusive growth on the African continent is to ensure that the excluded in the society whose participation is essential in the very design of the development processes, are included.
Inclusive growth simply implies that there is a conscious effort to ensure equitable allocation of resources with benefits incurred to every section of the society. That is, a growth which is shared and geared towards the excluded in the society and one which is broad based. Inclusive growth deals with policies that allow people from different groups -gender, ethnicity, religionâ€, and across sectors - agriculture, manufacturing industry, services, to contribute to, and benefit from economic growth. It is based on both the pace and the pattern of the economic growth . Inclusive growth is realized when it creates economic opportunities along with ensuring equal access to them by all. Inclusive growth means eliminating and addressing the issues of inequalities on the African continent. This means there is equal access by the rich and the poor to employment creation, market, consumption, production, health care, improved standard of living etc.
Dr. Ngozi Okonjo-Iweala, the former World Bank Managing Director and the current Minister of Finance of the Federal Republic of Nigeria, on February 22, 2012, in Accra, at the Global Development Series lecture organized by the John A. Kufuor Foundation, registered the same plight as to why the growth on the continent should be inclusive. She said that, conscious efforts should be made to reduce the gap between the poor and the rich in our societies. This is because rising inequalities and youth discontent can have a serious political consequences coming from the background of the Arab springs. Therefore, the growth pattern should seek to address the issues of the left outs in our societies.
We all admit the fact that, growth alone is insufficient to advance human development. And that, a major weakness in the growth of Africa, is the absence of its inclusiveness for all groups of the population. There is inequality in terms of: income; access to education and health services; limited job opportunities, especially for the youth; and, weak institutional, regulatory and business frameworks.
The growth on the continent should therefore be looked at from two angles; who gets involved in the production and how the growth is distributed. These two scenarios have a critical bearing on poverty reduction on the continent. Remember, the main objective of achieving inclusive growth is to bridge the gap between the rich and the poor and thus reducing poverty on the continent. So, we look at the process of generating growth and thus look at who participate in the baking of national cake? This process requires that, a large number of people should be involved as inputs in the production of the cake. This makes growth a broad-based and hence very inclusive.
The other issue after the production process, has got to do with the distribution of the national cake? How is the national cake distributed? Who gets what and why? This is particularly concerned with the equitable distribution of the national cake. It should seek to benefit all section of society; the rich and the poor and the middle income earners.
The African Development Bank (AfDB) has made the term, inclusive growth in the past decade a core pillar as a response to reducing high poverty levels and rising inequalities despite the rapid growth on the continent. The AfDB believes that per the number, poverty reduction on the continent is very difficult but it is not inevitable.
The road to achieving inclusive growth
Therefore, achieving inclusive growth on the continent is very critical as far as working to reduce the high level of poverty on the continent is concerned. It has become a matter of urgency on the continent for institutions such as the AfDB, to help reduce the widening gap between the rich and the poor. Deliberate and concerted efforts to develop policies to reduce inequalities and promote inclusion are now needed in Africa more than ever before. It is now time to focus on reducing poverty on the continent.
Doing this requires growth with equity. A conscious effort should be made to ensure equitable growth on the continent. Economic growth is vital but not sufficient to reduce poverty. It requires policies to support it to advance the reduction of poverty on the continent. This can be manifested in policies to boost agricultural production, quality education, private sector involvement and improvement, addressing gender and regional disparities and improving the investment climate.
Again, achieving inclusive growth on the continent requires a high level of political commitment. There is the need for a political will and political stability before all policies to achieve inclusive growth by countries across the continent is realized. There must also be the framework to increase institutional capacity on the continent. This will help to breed effectiveness and efficiency at the various institutions tasked to ensure the attainment of inclusive growth.
Furthermore, achieving inclusive growth and reducing poverty and joblessness on the continent requires strategies for job creation. Africa has the most youthful population in the world with most of them dominant in agricultural and informal employment and a small share of private industrial employment. Hence to be able to absorb the millions of these youth, labor intensive production strategy is highly necessary. Thus, to increase and sustain the absorption of these youth in agricultural production, African governments should increase their budgetary allocation to the agriculture sector, invest more in agriculture-related infrastructure for instance, rural roads, access to electricity, water and sanitation programs; and promote agro-business and small / medium entrepreneurship e.g. create an enabling environment for private sector development and investment. This will help to include more people in the production process hence bridging the gap between the haves and have not.
Yet another strategy is to focus on women inclusion in the production process. Most often, women are marginalized in society. They are often left out in the production process and this does not encourage equitable distribution of wealth in society. Therefore, inclusion of women in all aspects of the economic, social and political spheres is critical for achieving inclusive growth in Africa.