The Narrative for Sub-Saharan Africa

Abstract

This book looks at growth, jobs and poverty reduction in sub-Saharan Africa (SSA), where the quantum of growth in the last two decades has been markedly weak and volatile, especially compared to other regions of the world. We trace this weakness in the quantum of growth to the quality or pattern of growth, which has come to be based on exogenously given global demand—not for manufactured goods, but for extractives. SSA is richly endowed with extractives—a valuable asset in high demand in the rest of the global economy. The problem lies in the nature of global demand for extractives from SSA, which is volatile, running in successive cycles of high demand with high prices, met by oversupply, causing slumping into lower prices. We argue that a growth strategy based predominantly on exports of extractives is prone to price volatility in exogenous demand given by global markets. However, these boom-bust cycles in export demand affect not just the export sector in SSA as a ‘resource curse’ but also the production of output of the entire economy. The tradeables market for extractives inhibits the entire domestic goods market from Kaldorian productive transformation into manufacturing and services. This relative lack of productive transformation in the goods market works in complement with a relative lack of Lewisian transformation in the labour market, thereby inhibiting contractual transformation of low-productivity, self-employed labour in agriculture into higher-productivity wage labour in manufacturing and services—especially trapping women in unpaid family labour. These weaker outcomes in the goods and labour markets, influenced by the tradeables market for extractives, in turn affect incomes, poverty, prices and hunger. The vulnerability in exports of extractives is best seen in what economists call general equilibrium, affecting all the major markets of the economy. The book captures this through the working out of equilibrium in four major markets: the tradeables market for extractives, affecting the domestic goods market and the labour market. Policy to correct weaknesses in these three markets requires correcting weaknesses in the money market for greater accumulation and investment of physical, human and knowledge-based capital.

Appendix

1	Angola	LDC
2	Benin	LDC
3	Burkina Faso	LDC
4	Burundi	LDC
5	Central African Republic	LDC
6	Chad	LDC
7	Comoros	LDC
8	Congo, Dem. Rep	LDC
9	Eritrea	LDC
10	Ethiopia	LDC
11	The Gambia	LDC
12	Guinea	LDC
13	Guinea-Bissau	LDC
14	Lesotho	LDC
15	Liberia	LDC
16	Madagascar	LDC
17	Malawi	LDC
18	Mali	LDC
19	Mauritania	LDC
20	Mozambique	LDC
21	Niger	LDC
22	Rwanda	LDC
23	Sao Tome and Principe	LDC
24	Senegal	LDC
25	Sierra Leone	LDC
26	Somalia	LDC
27	South Sudan	LDC
28	Sudan	LDC
29	Tanzania	LDC
30	Togo	LDC
31	Uganda	LDC
32	Zambia	LDC
33	Cabo Verde	LMIC
34	Cameroon	LMIC
35	Congo, Rep	LMIC
36	Cote D’ivoire	LMIC
37	Eswatini	LMIC
38	Ghana	LMIC
39	Kenya	LMIC
40	Nigeria	LMIC
41	Zimbabwe	LMIC
42	Botswana	EE
43	Equatorial Guinea	EE
44	Gabon	EE
45	Namibia	EE
46	South Africa	EE
47	Mauritius	AE
48	Seychelles	AE

1. Note LDC = least developed country, as provided by the United Nations’ list of least developed countries. LMIC = low- or middle-income country, as provided by the World Bank’s country classification based on income groups with a gross national income per capita between USD1,046 and USD4,095. EE = emerging economy, as provided by the World Bank’s country classification based on income groups with a gross national income per capita between USD4,096 and USD12,695. AE = advanced economy, as provided by the World Bank’s country classification based on income groups with a gross national income per capita of USD12,696 or more