Africa: transformation, more than just growth

Inclusive Economy18 Jun 2013Annemarie van de Vijsel

African economic transformation should be inclusive, but how can this be achieved? Experts discussed this at the launch of the preview of the 2013 African Transformation Report.

African economies cannot transform if not everyone is included in the process. That is what all the speakers agreed on at the seminar entitled, ‘Challenges and potentials of African economic transformation: can economic transformation be inclusive?’. The more complex question at this seminar, which was held at the Institute of Social Studies (ISS) in The Hague, is how economic transformation and inclusiveness should be achieved.

Yaw Ansu considers employment to be the key driver of economic inclusiveness. He is chief economist of the African Center for Economic Transformation (ACET) in Accra, Ghana. ‘We want economic transformation because it leads to more jobs and thus to inclusion’, he said. The focus should not, however, be just on jobs. In Ansu’s view, they should be productive because that will also lead to more inclusion. And production should be based on science and technology.

By saying this, Ansu touched on two elements that ACET sees as necessary for economic transformation. Besides productivity and technology, Africa also needs diversification, export competitiveness and human well-being for such a change to take place. This is the main point made in the 2013 African Transformation Report, of which ACET launched the preview at the seminar in The Hague.

Economic growth is important but, as the report states, ‘economic growth alone will not sustain development on the continent’. What is needed, according to the report, is ‘growth through the structural shifts from traditional agriculture to modern agriculture, manufacturing, and high-value services. This is broadly acknowledged. But there’s more. It is growth through expanding the technical capabilities of people and institutions. It is growth through upgrading the technologies that people use on farms, in firms, and at government offices. It is growth through becoming internationally competitive and active participants in global value chains. And it is growth through spreading prosperity by supporting productive work and boosting consumption.’1

‘Thus it is that a transforming economy – more than just a growing economy – can weather the ups and downs of global product and service markets, the alternating liquidity and illiquidity of local and global financial markets, and the vicissitudes of commodity and construction booms. Thus it is that a Ghana can become a South Korea, a Senegal a Thailand, and a Kenya a Malaysia.’1

Economic transformation is not easy, as the report’s title shows, describing the current state of the African economy: ‘Growing rapidly, transforming slowly’. However, as Professor Peter Knorringa from ISS noted, ‘economic transformation is not an end in itself’. Someone from the audience remarked that the report seems to assume that economic transformation automatically leads to inclusiveness. ‘But does it?’, he asked the speakers. In general, it does not. Incentives are needed.

As Jeroen Roodenburg from the Ministry of Foreign Affairs pointed out, access to finance, public infrastructure and education and skills are important for inclusive growth. Mr Ansu agreed with him that education and skills matter. ‘We have to give children the skills to participate in the new economy that we want to create’, he said.

André Lelieveld of the African Studies Centre in Leiden explained that the promotion of commercial farming among small subsistence farmers can make the agricultural sector more inclusive. The growth of regional food markets can be a catalyst for economic transformation. In his view, however, it is important that more women are involved in commercial farming.

Although the issue of inclusiveness is important in the preliminary African Transformation Report, some speakers at the seminar argued that it should receive more attention and that a more detailed approach should be adopted to achieving an inclusive economy. The founder and current president of ACET, Mr Amoako, agreed. ‘The African Transformation Report touches upon the transformation of economies for inclusive growth. This is also one of the pillars of the report of the High Level Panel on the Post-2015 Development Agenda. I agree that the African Transformation Report does not sufficiently address this topic.’

One matter that was not discussed at the seminar is the role of different actors in the process of economic transformation. What should the governments of the African countries do and what are the tasks of the African Union, the World Bank, the European Union and China for example?

ACET staff are travelling to several countries around the world to get feedback on the preliminary report. They aim to use this feedback for the final version of the 2013 African Transformation Report that is to be launched in October. However, it is important that one of the strengths of the report remains intact: the fact that it has been written ‘from within’: by African experts themselves.


    1. ACET (2013), Growing rapidly – Transforming slowly. Preview of the 2013 African Transformation Report, p.1