Opinion: Answer To Financial Inclusivity Lies In Rural Africa

Opinion: Answer To Financial Inclusivity Lies In Rural Africa

Urban migration of job-seeking African youth from rural areas to cities has been the focus of much media attention, but the majority of Africa’s population is likely to remain rural until the mid-2030s, according to a report in Devex.

Continued population growth in rural areas means that jobs must be created there, and policies focusing mainly on moving the rural labor force to productive activities in the cities may not be enough.

“The main sector that you can tap to create jobs is agriculture,” said Ibrahim Assane Mayaki, CEO of the New Partnership for Africa’s Development Planning and Coordinating Agency, in an interview with Africa Policy Journal. “But not agriculture with (the) yields that we have today. It has to be through a transformation of small-scale farmers into micro- and meso-entrepreneurs.”

The 15th International Economic Forum on Africa was held in September in Berlin. One of its goals was examining ways in which Africa’s economic growth can be more inclusive.

At its current population growth, Africa will be home to an additional 1.2 billion people by 2050, with 47 million youth entering the labor market each year, according to Devex. One of the forum sessions looked at how regional development strategies could help Africa to capitalize on this population boom. There appeared to be general consensus that many of the answers could be found in rural areas.

But how will these opportunities be created?

Rural development needs to be transformed, Mayaki said. Failure to do that has risks including disaffected young men. “We will not be able to employ them,” Mayaki said, “and they will go and join Boko Haram, and gain $5 or $6 a day.”

Mayaki said the role of the state agricultural reform in Africa needs to be rethought. More administrative powers must be moved to the local level. Ethiopia and Rwanda are some of the countries doing the best job of addressing this issue, he said.

“At the end of the day, agriculture is local,” Mayaki said. It is not the business of an agriculture ministry, he added. It’s the business of local institutions managing issues in interaction with small-scale farmers.

Ivory Coast is one African country having some success increasing investment in rural areas, Devex reports.

Ivory Coast has specific tax advantages for private-sector investment in rural areas, said Kassi Jean-Claude Brou, the country’s minister for industry, in a Devex interview. “When you invest in the capital city, you get five years’ exemption from income tax. When you invest in rural areas, you can get up to eight (year’s exemption), and in very, very remote areas you can get up to 15 years.”

Like Mayaki, Brou spoke of the need to empower local institutions. He said the Ivory Coast’s government had doubled its funding “so they can leverage private-sector resources to really develop the region.”