Presentation on theme: "IS AFRICA GROWING OUT OF POVERTY? Ewout Frankema Wageningen University, Utrecht University Public Lecture at Fundación Ramón Areces, Madrid, 22 January."— Presentation transcript:
IS AFRICA GROWING OUT OF POVERTY? Ewout Frankema Wageningen University, Utrecht University Public Lecture at Fundación Ramón Areces, Madrid, 22 January 2015
A decade ago...
The African ‘Lions’ Real GDP growth EstimateTop sForecastTop Angola11.1Turkmenistan11.3 China10.5DRC (Congo)8.4 Myanmar10.3Paraguay8.3 Nigeria8.9Ivory Coast8.0 Ethiopia8.4Mozambique7.8 Kazakhstan8.2China7.5 Chad7.9Ethiopia7.3 Mozambique7.9Tanzania7.1 Cambodia7.7Ghana7.0 Rwanda7.6Nigeria6.8 Source: IMF 2012
Yet another short-lived commodity boom, or the first stage of a transition towards sustained economic growth and poverty alleviation?
Sub-Saharan Africa, Average annual GDP per capita growth Source: Maddison 2010; IMF 2012
Real wages of unskilled workers, Source: Frankema and van Waijenburg 2014
Scenario’s of poverty trends to 2100
Five main socio-economic trends of the past 20 years
(I) Improved macro-economic stability Source: Africa Development Indicators 2014
(II) Export growth, Source: UNCTAD 2014 Purchasing power of exports in terms of imports (%) Terms of trade (share) Export volume (share) East Africa 108% Central Africa 312% West Africa 151% Southern Africa 60% North Africa 90%
Export-GDP relationship, Source: UNCTAD 2014; African Development Indicators 2014
(III) Infrastructural investment Construction of Highway Nairobi-Thika (Kenya)
Rwanda, rice (paddy), t/ha Source: FAOSTAT 2014 (IV) Glimpses of an African ‘Green Revolution’ Benin, cassava, t/ha
(V) Declining intensity and changing nature of violent conflict Source: Centre for Systemic Peace,
What drove the post-1995 growth recovery? “Lost Decades” of (growth cycle) End of the Cold War Shifting global economic gravity (China, Brazil) Structural adjustment programs?
Exports per capita, ( in constant US$ 1980 )
Per capita exports of ‘non-oil’ countries,
Chinese FDI offers in Africa, since 2010
A slow revolution...
Population density (pp/km 2 ), ca. 1500
Population density (pp/km 2 ), Source: Frankema and Jerven 2014; UN Population Prospects 2012
Concentration of economic power
Drivers of urban growth Ca. 50% of post-2000 GDP growth in SSA caused by domestic structural change (McMillan & Harttgen 2014) Consumer demand concentration (market size) Agglomeration effects in product and factor markets Concentration of investment capital (partly export revenue driven) and human capital Higher potential for labour division and economic specialization
The temporal ‘order’ of development
Urban economic growth comes ahead of agricultural intensification; well-functioning land market institutions (e.g. registration); rural infrastructure Urban growth financed by extra-continental trade relations and foreign investment (FDI) flows. Urban growth goes ahead of human capital investment (educational quality in particular). Urban growth goes ahead of well-functioning financial & fiscal institutions (credit markets, tax systems etc.). Urban growth goes ahead of historically grounded institutions of ‘citizenship’.
Can urban growth induce institutional reforms and agricultural intensification?
Conclusion Yet another commodity boom? No, there is much more going on. However, the specific ‘order’ of development implies a lack of useful historical analogies to understand current African growth, and its sustainability in particular. Policy implications: – Strengthen rural-urban market connections, also if this implies ‘de-liberalization’ and fiscal re-distribution. – Governing institutional reform (land registration, fiscal capacity, financial institutions and evolution of ‘citizenship’).