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Promoting inclusiveness in Africa within the framework of Dutch policy on international development cooperation and trade could consider at least four or five areas of focus: supporting agriculture production and productivity, promoting agro-processing programmes through partnerships between Dutch private investors and African industrialists, supporting formalisation of the informal sector through application of information technology and convening the advancement of political settlements and national consensus building.
Over the past 15 years, there has been a consistent growth of macro-economic indicators in many African countries. Eleven of the twenty fastest growing economies in 2014 were African countries. While there is an obvious link between economic growth and citizens’ well being as no country has ever achieved sustained reduction in poverty without economic growth, Africa’s growing economy has not been inclusive -it has left millions of people behind. Not only is poverty reduction not keeping pace with economic growth but also there is rising income, gender and geographical inequalities. Inclusiveness means participation in the growth process through employment creation, rising household income and changing social and power relationships. Africa’s economic growth has not been inclusive because sectors that are driving growth are not employing many people, while those that are employing millions of people (for example agriculture and informal service sectors) are not structurally growing. To promote inclusiveness, Dutch development cooperation in Africa could consider the following areas to focus support:
One, support productive sectors that employ people. Emphasis on aid is too much on social sectors but without substantial support to productive sectors that the poor and marginalized are involved these people will stay perpetually excluded because the structure of their livelihoods is linked to poverty. For development aid to have stronger impact on inclusiveness, it must focus on employment creation, in the African context that means supporting structural transformation of the agriculture sector that employs about 60% of the population; majority of them poor and marginalized people.
Two, consider supporting agro-processing industrial programmes through partnerships between Dutch private investors and African industrialists. That will not only create industrial jobs in anticipation of structural transformation in agriculture but also will add value to agricultural products and improve general household income. Currently, average income of industrial employees is more than twice that of agriculture. Close to 85% of poverty originates from employment in agriculture and informal service sectors. Africa’s industrial policy is the least supported by international development agenda because of ideological dichotomy of the role of the state and the private sector. But the rise of South East Asia has questioned this rigid ideology.
Three, support formalisation of the informal sector. Given that many new jobs in the immediate future will be in the informal sector, inclusive strategies will need to make informal sector an important priority for reforms. Majority of the labour force in the informal sector works under poor conditions, receiving insufficient income and social security. Providing information and technology support can radically change the structure and organisation of the informal sector and improve the social conditions of the working poor.
Four, regardless of structural transformation and economic growth, there will still be vulnerable people like physically impaired, old age, and single parents who will need social protection. Dutch support to social protection programmes in Africa could be a short-term catalyst but in the long run that should be the role of African states and the citizens. Recent research by the African Development Bank shows increasing growth of the African middle class. Historically, solidarity of the middle class with low-income earners has led expansion of welfare needs of society. Supporting advocacy and education campaigns that will bring the rising middle class to play a major role in the drive towards inclusiveness and to exact accountability from the state will be needed.
Five, and perhaps one of the most important toolkits to achieve inclusiveness in Africa: support for political settlements and national consensus building. While many countries have imbibed multi-party democracy as the preferred mode of governance, a winner takes all democratic system that alienates almost half of the population only tears countries apart, unable to reach consensus on national priorities for development. No doubt a country like Ghana for instance would benefit from support that aims at transforming its polities of winner takes all that is currently having deleterious effect on the economy and welfare of the people. Convening political settlements among political parties on one hand and ‘elite’ consensus among economic and bureaucratic interest groups has broader development objectives beyond peace and state stability. It is also needed for the promotion of shared growth; enabling national consensus on redistribution of the benefits of growth to marginalized groups.
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