africa

Africa at a Fork in the Road: Taking Off or Disappointment Once Again?
to the human capital of the poor) can engender a virtuous spiral generating a more
rapid and more inclusive growth structure which, in turn, could lead to a less unequal
income distribution and still further reduction in poverty, and so on.
Next we identify three of the most fundamental elements of a sustainable inclusive
growth strategy. First, the creation of new productive jobs should be given the highest
priority within the context of SSA, where under-employment and low-productivity
employment in informal activities are rampant and where demographic pressures
keep on adding masses of new workers to the labor force. The highly comprehensive
and influential McKinsey report on Africa at Work: Job Creation and Inclusive
Growth (2012) concluded that “For growth to be inclusive, African workers need to
be employed. Employment income is the only sustainable mechanism for most of the
population to share in the proceeds of growth” (McKinsey, 2012: 11). The traditional
distinction between formal and informal jobs dear to development economists has
been replaced in that report by a more operational distinction between stable and
vulnerable jobs. Most of the labor force in Africa is employed in vulnerable jobs (a
little under two-thirds in 2010), with only about a quarter enjoying stable jobs and
roughly one-tenth unemployed.
While Africa has been reasonably successful in creating new stable jobs in the first
decade of this century, this trend needs to be accelerated. A particular source of
concern is the relatively slow growth of manufacturing employment. As mentioned
previously, the majority of the workers who moved out of agriculture found jobs in
the urban services sector (still largely informal) rather than in manufacturing. Rodrik
(2014) deplores this trend and outlines four possible scenarios for sustained, rapid
growth into the future: (a) the revival of manufacturing and industrialization, which was
the traditional route to convergence among the early developers; (b) agriculture-led
growth with diversification into higher-valued products; (c) the generation of rapid
growth in services; and (d) growth based on natural resources. Rodrik sees major
obstacles to the fulfillment of each of these scenarios and concludes that if African
countries are able to continue to grow fast “…they will do so pursuing a growth model
that is different from earlier miracles based on industrialization” (Rodrik, 2014: 15).
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