Generating Rural Employment in Africa to Fight Poverty Janvier D. Nkurunziza United Nations Economic Commission for Africa Sub-regional Office for Central Africa Yaoundé, Cameroon

2 Outline Key message Poverty and Unemployment: Facts Poverty, unemployment and growth Generating rural employment: 3 issues Conclusion

3 Key Message Africa’s high poverty rates are the result of past economic policies that have neglected rural economies. Fostering rural employment will have a lasting effect on poverty reduction

4 Africa has highest poverty in world

5 Poverty varies across countries

6 Poverty is a rural phenomenon…

7 Unemployment is high

8 Unemployment figure misleading… Data collection problem High number of discouraged workers High number of working poor: 56 percent Large variations across:  Age groups: youth unemployment is twice the average  Gender: Female unemployment is underestimated  Countries: highest rates in Southern Africa  Geographical areas: rural is higher than urban

9 Growth has not created jobs

10 Growth has not created jobs… Growing sectors are capital-intensive. In 2005:  Oil economies grew by 6.1 percent  Non-oil economies grew by 4.1 percent Poor intersectoral linkages between growing sectors and the rest of the economy Terms of trade not favourable to labour-intensive sectors Policies favour capital rather than labour-friendly technologies Limited employability of the poor

11 Does job creation have priority status? If job creation is high priority, this should be reflected in PRSPs Analysis of 21 PRSPs shows the following:  33% (7 countries) have a low employment content  62% (13 countries) have a medium-low employment content  5% (1 country) has a medium-high employment content These findings contrast with several declarations at highest political level on centrality of employment creation Key issue is how to translate declarations into actions

12 Creating rural employment Completing Africa’s demographic transition Structural transformation based on agriculture Fostering development of rural nonfarm activities

13 Completing demographic transition Reduction in fertility rates will reduce working age population:  Low demand for jobs  Shift from quantity to quality of jobs (decent jobs) Low pressure on land  Higher agriculture productivity (see table 3)  Higher economic transformation (see table 3) The surge of HIV/AIDS is profoundly affecting African economies, particularly rural areas

14 Agriculture transformation & sectoral linkages Agriculture is source of income for 90% population Allocate sufficient resources to agriculture  In Burundi, 99% of poor are rural & agriculture sustains livelihoods of 90% but it receives 0.68% of total credit  Commerce receives 72% of total credit Good governance to make efficient allocation of resources possible: rural populations are poorly represented Address land-related issues (see table 4); they include:  Property rights to those using land  Redistribution of land to landless  Encourage investment in land & soil conservation measures  Increase land productivity: use of fertiliser & high-yield seeds

15 Developing rural nonfarm activities 30-50% of landless derive income from RNF activities 10% of rural force (47% in Eastern Europe) but 42% of rural incomes: big potential for employment creation Integrated with agriculture development (see box 2 on Uganda): agroprocessing, services to agriculture, etc. Needs different types of capital to thrive:  Human & social capital: networks and information are crucial  Financial capital: more than for agriculture  Physical capital: electricity, roads, telecoms, etc. For example, electricity allows technological upgrading & new activities  Natural capital: determines the nature of activities, for example tourism (see Box 3 on Zimbabwe)

16 Conclusion Agriculture development is the backbone of rural employment in most African countries; so, focus here Agriculture needs to create links with nonfarm activities to amplify the effects of agriculture growth To facilitate this economic transformation, Africa will need to:  Complete its demographic transition  Invest in human, social, financial, physical and natural capital Making rural employment a priority will also require improvement in political and economic governance.

Thank you very much