OECD, AfDB, UNDP, CIRAD. 2015. Thinking regional to foster Africa's structural transformation. GREAT insights Magazine, Volume 4, Issue 4. June/July 2015.
African economies need to liberate the potential of their many regions to foster endogenous growth and accelerate structural transformation by adopting regional approaches to development – multi-sectoral, place-based and participative – and building on specific local resources.
See also the interview with OECD’s Henri-Bernard Solignac-Lecomte carried out by Kathleen van Hove of ECDPM at the European Development Days, Brussels, June 2015.
Structural transformation is Africa’s overarching priority. But despite some progress over the last decade, current policies have not proved effective enough at speeding up job creation in productive sectors.
New approaches are all the more necessary to accelerate structural transformation in the face of Africa’s unique demographic and spatial dynamics. In the decades to come, a fast rise in urban and rural populations, acute regional disparities and the constraints of global competition will make the challenge of transforming the continent a unique undertaking, although with wide variations between North, South and sub-Saharan Africa.
Africa’s transformation path will thus have to cross unchartered territory. Past experiences of demographic, urban and economic transition may inspire action, but they cannot provide blueprints. As for current strategic options hinging on specific sectors, they may not be enough to meet the double challenge of massive job creation and productivity growth on their own. Pragmatic, context-specific approaches combining their merits will have to be crafted. Africa has no choice but to innovate.
But how? The 2015 edition of the African Economic Outlook (AEO 2015), themed “Regional development and spatial inclusion”, suggests to start from the unique structural features of African economies: the demographic boom demands to place job creation at the centre of development strategies; its stark regional disparities call for regional approaches to development – multi-sectoral and place-based. The main proposal is thus to help African policy makers better tap African regions’ diversity and unlock their potential by building on specific local resources.
Overall, Africa’s assets represent an immense potential: a young and growing active population; a fast growing domestic market; a diversity of ecosystems; abundant and largely under-exploited natural resources; and large scale and vast land areas, etc. However, in a context of wide spatial disparities, those assets are not easily identified and exploited by private and public actors, who tend to focus on a limited range of large urban centres and natural resource enclaves. Considering the daily practice of policy management, two major factors stand out that hamper effective regional policy-making: strictly-sectoral approaches and inadequate information.
Regional, context-specific policies should not work in isolation from national and sectoral policies. Yet in practice, narrowly-defined sectoral approaches tend to almost exclusively frame governmental action, hampering effective problem-solving at the local level:
In addition, a salient lack of knowledge about African regions and local economies drastically impedes the capacity of policy makers to identify and unlock their potential:
African economies need to liberate the potential of their many regions to foster endogenous growth and accelerate structural transformation. Top-down, subsidy-based interventions aiming to temporarily alleviate regional inequalities must give way to a broader family of policies increasing regional competitiveness and innovation, mobilising untapped resources and stimulating the emergence of new activities. Regional development thus takes a positive approach to developing the potential of the spaces that usually go under the radar of national policy makers: it aims to increase economic productivity and improve well-being in the different regions of a country.
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Promoting regional development requires revamping the entire policy process (see Table 1), and therefore adopting place-based, multi-sectoral and participative development strategies that do the following:
Seven main steps may guide the formulation of development strategies at regional level:
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In order to improve the effectiveness of regional development strategies, four aspects deserve particular attention in many countries.
Firstly, a number of initiatives in Africa illustrate ways of improving the mechanisms that inform policy design and implementation.
Secondly, defining integrated strategic priorities can be done even with limited data thanks to innovative approaches. Regional foresight studies, for instance, bring together different levels of government – national, regional and local – as well as non-state actors to map possible futures, identify opportunities and challenges, stimulate debates on pathways to development and lead to place-based solutions. While many African countries plan for the long term, few use regional foresights studies or a genuine participatory process. Out of 37 countries surveyed in the AEO 2015 report, 27 have medium- to long-term strategies, but while most span 20 years or more, only about a third foresee alternative scenarios. Most tend to overlook the multi-sectoral nature of development and ignore local specificities.
Thirdly, capacity must be strengthened at multiple levels of government so as to make multi-level governance effective. This may be achieved by putting in place “binding” mechanisms – e.g. legal mechanisms or contracts between local and national administrations – or “soft” mechanisms, such as platforms for discussion. Rwanda’s Joint Action District Forum is one example of such a participatory process where local stakeholders articulate development plans, set budgets and allocate district resources. Involvement of subnational governments in policy making takes time, but medium- to long-term benefits should outweigh the costs of co-ordination.
Finally, resources for multi-level governance must be substantially scaled up, and public and private institutions strengthened.
In sum, place-based, multi-sectoral and participative development strategies are one way of “decompartmentalising” existing policies, so as to better tap the potential of African regional resources. They provide an avenue for implementing the African Union’s agenda of integration and structural transformation, including through its Rural Futures programme, which aims to reconnect rural and urban development within a regional perspective. International dialogue and exchange of experience will be essential to inspiring country-specific processes.
For more on this topic please see:
AfDB (et al.). 2015. African Economic Outlook 2015: Regional Development and Spatial Inclusion. Paris: OECD Publishing.
ECDPM was part of the expert group consulted by AfDB-OECD-UNDP for the AEO 2015.
This article was published in GREAT Insights Volume 4, Issue 4 (June/July 2015).