In a recent debate article published in the Swedish local newspaper, Uppsala Nya Tidning, Professor Kjell Havnevik of the Nordic Africa Institute, questions the reporting of economic growth in Africa. He commented that the long-term impact of the exploitation of natural resources and implementation of large-scale agricultural systems increases social inequality and is not environmentally sustainable.
According to Hanevik, annual economic growth in Africa is mainly based on exploitation of natural resources for export, especially oil, gas and minerals. The article points out that much of the tax revenues from these activities are small or negligible because of favorable conditions for investors. Moreover, he states that money transfers and illicit capital flights have increased by 12% annually, which is twice as big as the annually aid budget to Africa. He also says that the ones that benefits from the current economic growth in Africa are the already wealthy and foreign investors, which is resulting in increased social inequality. Moreover, he refers to a recent study which shows that less than 1% of Africa’s labor force is employed within the exploitation sector.
Havnevik is concerned that there won’t be enough jobs for the growing population. Those of working-age will grow from 380 million to 500 million by 2020, and of these, 300 million are expected to be left in poverty or with very low incomes. The majority of these people live in rural areas, with farming as a livelihood. The opportunity to get jobs in rural areas will also be fewer since Africa has witnessed closures of processing and manufacturing industries.
Furthermore, the article claims that the over-optimistic reporting from media is further strengthened by recent studies showing that foreign agricultural investors come to Africa to produce biofuel and food for export. These investments are often for large scale agricultural systems which are often collaborations between foreign and domestic African interests along with aid from international aid organizations. The result is that few work opportunities are created for local people. Large-scale agricultural systems often focus on one crop, and the systems are dependent on irrigation, which leads to conflicts with local farmers. Havnevik says that this is a major problem since local farmers have weak water and land tenure rights even though they produce 90% of the food in Africa.
He claims that small scale agricultural systems generate more employment, are more diverse and have less negative effects on biodiversity and climate change compared to large scale agricultural systems. He makes a comparison with the scenario in Brazil where large scale agricultural systems have been in focus for a long time. This system is covering 75% of the countries agricultural land, but only produces 60% of the annual agricultural production. The system only provides employment for 2 people per hectare, whereas small scale provides employment and sufficient income for 15 people on the same area.
Finally, Havnevik concludes that there is a lack of strategy from African governments and organizations to contribute to economic growth that is beneficial to local people in rural areas.
You can read the original (Swedish) Version of the article here.