africa

Yale Center for the Study of Globalization
Given the diversity of initial conditions and stages of development in SSA, the appropriate
strategy for development and employment will need to match the prevailing
structure of the economy. One possible classification was proposed by Thorbecke
(2014b), based on four hierarchical criteria: the quality of the country’s institutions
and governance, the relative importance and potential of the agricultural sector, the
endowment of natural resources, and the geographical considerations, i.e. whether
the country is coastal or land-locked. Based on these criteria, six distinct groups of
SSA countries were identified and an appropriate development strategy outlined.
A second key element of a more inclusive growth structure is infrastructure investment
in such social capital overhead as rural (farm to market) roads, road networks
linking rural and urban areas, schools, clinics, and dispensaries. An improved road
network would go a long way in facilitating the structural transformation by reducing
the transaction costs that potential migrants have to incur. In that sense such an
investment would act as a lubricant for rural to urban migration as well as making
it easier for workers leaving agriculture to move into more productive rural off-farm
activities. Another advantage of improved rural roads is that they would encourage
the commercialization of agriculture. Small-scale subsistence farmers would benefit
from lower transport costs in bringing their products to the market and gain valuable
time in the process. In addition, more efficient roads would lower the costs of
farmers’ inputs and other goods they import from urban areas. In a more general
sense, markets would operate more efficiently.
Investment in schools and health facilities would contribute to human capital. Appropriate
conventional and vocational education would increase labor productivity
and help provide the children of farm households with the skills they may need to
be productive in non-agricultural activities. Clinics and dispensaries contribute to
building up the health capital of the beneficiaries with a direct positive effect on their
productivity. An overarching advantage of all the above examples of infrastructure
investment is that they require much unskilled labor during their construction phase.
Thereby some of the un- or under-employed individuals in the labor force can find
jobs, which will reduce the incidence of poverty. While most of these infrastructure
jobs will tend to be vulnerable, they can contribute to some learning by doing and
better prepare those unskilled workers to compete for more stable jobs.
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