Friday, March 14, 2014

The poverty picture (Africa)

Sub-Saharan Africa may very well be the next big opportunity but it pays to look at the ground conditions (India is facing  the same problem)




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John Page and Abebe Shimeles, authors of a recent study published by the World Institute for Development Economic Research, think they have found an answer: not enough workers have moved from the fields to offices and factories..... 
Indeed, in Tanzania and Uganda, jobs have moved in the other direction, from services to agriculture.

The authors measure how responsive employment is to GDP growth and find sub-Saharan Africa has the most unresponsive labour markets in the world..... 
Page and Shimeles reckon that if employment shifted away from farming, poverty levels would dive.

Rwanda has experienced such a shift in recent years. Agriculture made up three quarters of its employment in 2000; that fell to 52 per cent in 2011. A mining and construction boom emerged.  
Page and Shimeles calculate that the sectoral shift was almost wholly responsible for Rwanda’s subsequent fall in poverty.

There are lessons here for countries like Nigeria....Yet in 2010, 44 per cent of Nigeria’s workforce was still employed in the agriculture sector. For a big drop in poverty, the jobs market needs to change.

regards