Understanding and Addressing Inequalities in the Context of … · 2017. 8. 27. · policy...

Thematic Section

Understanding and Addressing Inequalitiesin the Context of Structural Transformationin Africa: A Synthesis of Seven CountryStudies

DZODZI TSIKATA ABSTRACT This article features the analysis and comparativeassessment of a set of studies on the dynamics and drivers of andpolicy responses to inequalities in the context of structuraltransformation in Africa, including an overview paper, seven countrystudies, and a paper on gendered assets inequalities, all published inabridged versions in Development 57(3–4) (Armah et al., 2014; Ariyo andOlaniyan, 2014; Bunwaree, 2014; Diene, 2014; Kedir, 2014; Omilolaand Akanbi, 2014; Osei-Assibey, 2014; Owiti, 2014; Wanjala, 2014).Drawing from these studies, it explores the conceptual frameworks,the key domains and the main drivers of inequalities. It furtherexamines recent policy interventions and outlines policy implications,providing a preliminary basis for setting an agenda for research andadvocacy to support African and country efforts to tackle thedeepening inequalities and achieve structural transformation.

KEYWORDS income inequalities; social inequalities; politicalinequalities; Africa 2063; gender inequalities; structuraltransformation

Introduction, context and scope of the assessment

There are two distinct but interconnected questions of Africa’s development that arecurrently very topical in the development discourse. These are as follows: (a) how toaddress the persistent and worsening problem of inequalities in access to resources andopportunities and in development outcomes? and (b) how to reactivate and completethe unfinished agenda of structural transformation of African economies and societies?In Africa, the growing inequality in income, wealth, access to social services anddecent employment in the midst of consistent economic growth in the last decade hasbecome a matter of grave concern (Armah et al., 2014). Seven of the ten most unequalcountries in the world – Namibia, Comoros, South Africa, Angola, Botswana, Lesothoand Swaziland – are in Southern Africa. Many countries are confronted with strikingincreases in inequality, such as South Africa and Central African Republic, where theGini coefficients increased from 58 to 67 (2000–2006) and from 43 to 56(2003–2008), respectively (Omilola and Akanbi, 2014; Armah et al., 2014).1

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Development (2015) 58(2–3), 206–229. doi:10.1057/s41301-016-0002-8; published online 5 July 2016

Rising inequalities have also been recognizedas a global issue. For example, a Credit Suissestudy finds that 10 per cent of the global popu-lation holds 86 per cent of the assets in the worldwhile the poorest 70 per cent (more than 3 billionpeople) holds 3 per cent (Credit Suisse, 2013). 1per cent of households owns 46 per cent of theworld’s wealth and the bottom half of the world’spopulation combined owns less than the 85richest people in the world. The wealth of theone per cent of richest people in the worldamounted to $110 trillion, almost 65 times thetotal wealth of the bottom half (Oxfam, 2014).2

In response to research and effective advocacy bya global coalition of intellectuals, civil societyactivists and policymakers, the recently adoptedSustainable Development Goals have devoted onestand-alone goal to reducing inequality betweenand within countries (Goal 10) in addition to thegoal on achieving gender equality and empower-ing women inherited from the MDGs framework(Goal 5).

Structural transformation is a key pillar ofAgenda 2063, which was adopted by AfricanHeads of State and Government during the cele-brations of the 50th Anniversary of the OAU.3 Itwas born out of concern that a relatively longperiod of sustained and rapid economic growthfailed to translate into the creation of decentemployment and the balanced and sustainabletransformation of African economies. Instead,many African economies continue to experiencestagnation in agriculture, declining levels of indus-trialization and growth in informal services.

That these two questions have become topicalat this juncture is not accidental, and is in factopportune. Studies have suggested that withoutstructural transformation of Africa’s low-produc-tivity agrarian economies to mixed economieswith healthy agrarian, industrial and servicesectors, efforts to deal with inequalities in devel-opment outcomes can only be cosmetic. At thesame time, there is evidence that structuraltransformation will not produce just andequitable economies and societies unless address-ing inequalities constitutes an integral part of theagenda of structural transformation (Armahet al., 2014).

A broad-based consortium of African govern-ments, United Nations agencies, research institu-tions and civil society groups collaborated in2014 to organize a region-wide conference ontackling inequalities and promoting structuraltransformation in Africa as two integral aspectsof Africa’s development agenda.4 This was toinfluence UN processes to fashion the sustainabledevelopment agenda and also to establishresearch, policy and advocacy agendas on struc-tural transformation in Africa. Several back-ground papers were commissioned or adaptedfor the conference. These included seven countrystudies (Ethiopia, Ghana, Kenya, Mauritius, Nige-ria, Senegal and South Africa) on the dynamicsand drivers of the various domains of inequalitiesin Africa, policy responses and recommendationsfor the future, an overview paper on structuraltransformation and inclusive development fromthe United Nations Economic Commission forAfrica (UNECA), and a paper on gendered assetsinequalities in Africa.

This article synthesizes the country studies, theoverview paper and the paper on gendered assetsinequalities. The country studies cover countrieswith different degrees of income inequalities5 andvariations in other characteristics. For example,Ethiopia is largely agrarian and rural (only 17per cent of its population lives in urban areas),while South Africa and Mauritius are the mostindustrialized and urbanized of the seven. Kenyaand Nigeria have significant industrial compo-nents, while Ghana and Senegal are largelyagrarian economies that are increasingly domi-nated by largely informal service sectors. Thus,the majority of the countries in the study cannotbe said to have undergone structural transfor-mation, in spite of the changes they haveexperienced in the contribution to GDP of theirvarious sectors over the years.

The seven papers are not perfectly comparable.The way the brief was interpreted depended ondata availability, the disciplinary orientation ofauthors, their sense of which inequalities weremost important, and in cases where alreadycommissioned papers were adapted, on theiroriginal terms of reference. The differences indata availability were particularly challenging, as

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not all the relevant data existed for all thecountries. Also, the existing data had beencollected over different time periods. Only a fewcountries had longitudinal data-sets. For exam-ple, Ethiopia had the Ethiopian Rural HouseholdSurvey (ERHS) and the Ethiopian Urban House-hold Survey and South Africa also had paneldata. Senegal on the other hand did not havepanel data on households and therefore had touse surveys reported in 1995 and 2001 (EnqueteSenegalaise de Manages-ESAM I and ESAM II).

There were also differences in the kind anddegree of detail in data collected on any particularinequality. Some countries had provincial break-downs (South Africa), while other countriesfocused on rural–urban differences (Ghana). Thedifferences in data availability also affected thechoice of indicators that were used as proxy forthe different domains of inequalities. Thus whilesome papers focused on income in analyzingeconomic inequalities, others combined incomewith employment (Ethiopia) or with employmentand assets inequalities (Ghana). The situationwith social inequalities was no different. Somestudies used health insurance for the healthindicator (South Africa and Ghana), while othersused access to health facilities and skilled person-nel, malnutrition and weight, HIV/AIDS preva-lence (Senegal) and maternal mortality(Ethiopia). These data limitations indicate anurgent agenda for African countries to agree onindicators as well as modalities for data collectionthat can support a regional agenda for monitor-ing and addressing inequalities and structuraltransformation.

The article approaches the challenges of databy using what data are presented as indicative/illustrative of the dynamics of particular domainsof inequalities with the understanding that theabsence of a discussion of a certain domain ofinequalities in a particular country does notimply that there is no issue with that domain inthat country.

The article has five broad segments. Theintroduction is followed by a discussion of theconceptual frameworks and key domains ofinequalities within the various case studies. Thethird section is discussion of the nature and

drivers of inequalities as revealed by the data inthe country studies. The fourth examines policyinterventions, followed by a consideration ofpolicy implications for the African agenda forStructural Transformation.

Framing inequality and its domains

Deepening the challenge on dominantapplications of Kuznets’ thesis

All nine studies consider inequalities as a problemrequiring policy intervention. Thus, they take astheir point of departure recent challenges to thedominant interpretations of Kuznets’ thesis oneconomic growth and inequalities. Kuznetsargues that inequality is one of the costs ofdevelopment and growth (Kuznets, 1955). Histhesis is that inequality is mostly low at the earlystages of development and increases as economiesgrow and advance from being agricultural tobecoming industrial. With sustained develop-ment, and upon reaching a certain stage ofgrowth and transformation, inequalities begin toreduce (Kuznets, 1955, in Kedir, 2014; Armahet al., 2014). Based on this, some have arguedthat although economies of scale and agglomer-ation resulting from structural transformationcan decrease absolute poverty, they are inevitablyaccompanied by rural-urban/regional inequality(Fox and Pimhidzai, 2011).

In the context of the industrial revolution, somecountries in Western Europe and America con-formed to Kuznets’ thesis, which has beenrendered as a curve. However, some more recentexperiences of structural transformation havefailed to confirm the Kuznets’ curve (Armahet al., 2014). Several studies on the relationshipbetween inequality and economic growth andtransformation have yielded mixed results, withsome studies reporting a positive relationship(Okun, 1975) and others reporting a negativerelationship (Alesina and Rodrik, 1994; Perssonand Tabellini, 1994; Berg et al., 2012).

With the renewed interest in income distribu-tion, there have been several re-examinations ofKuznets’ theory. For example, Lee et al. (2015)have argued that the long-held view that

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inequality was an inevitable outcome of struc-tural transformation had been based on a partialreading of Kuznets. This is because his turningpoint, beyond which inequality begins to decline,was not economic or based on the naturalprogression of an economy or the unseen handof the markets. It was instead due to political andpolicy choices propelled by the growing power ofthe urban working classes. Therefore, reducinginequalities in the context of structural transfor-mation is not automatic. Rather, it is a matter ofsocial and political choice, and robust policies.The empirical evidence supports this view inshowing that much depends on country-specificconditions and national policies (UNDESA,2013).

The UNECA study also provides concrete proof ofthe policy basis of inequalities in discussinginequality trends in three countries undergoingstructural transformation – Brazil, India andChina. The paper argues that while Brazil contin-ues to experience ‘record-high levels of inequality’,its recent economic growth has improved thesituation of poor people partly because of improve-ments in education and labour market conditions,as well as expanded social assistance programmessuch as cash transfers. China and India, on theother hand, have experienced rising inequalities inspite of high levels of growth. The paper alsoattributes the high levels of inequalities in LatinAmerican countries, which are mostly middleincome ones, to a combination of unequal distri-bution of land and education, high returns toskilled workers, high fertility rates in poorerhouseholds and regressive public spending. Coun-tries such as Argentina, Brazil, Ecuador, Uruguayand Paraguay are said to be successfully tacklinginequalities by addressing some of these problems(Armah et al., 2014).

The argument about the policy basis of inequal-ities is important in thinking about how toapproach structural transformation in wayswhich ensure equity and sustainability in out-comes. It is a welcome departure from theapproach that considers inequalities to beinevitable in the context of structural transfor-mation. While there is some discussion of thepositive effects of income inequality (Kedir,

2014),6 the overwhelming majority of recentcommentary has drawn attention to the negativeeffects of income inequality such as creditrationing, collateral requirements which restrictinvestment opportunities of the poor, and the riskof violence, social unrest and insecurity (Kedir,2014).

Several, though not all, of the country studiesdistinguish between poverty and inequalities bypointing to the paradox of progress in povertyreduction combined with growing inequalities.Both the South African and Ghanaian studiesmake this point, arguing that while there isevidence of poverty reduction after decades ofhigh levels of economic growth, inequalities haveincreased sharply over the same period. Bothstudies also suggest that there are linkagesbetween inequalities and poverty (Osei-Assibey,2014; Omilola and Akanbi, 2014). The SouthAfrican study notes that the South Africaneconomy is facing a triple challenge of high levelsof poverty, unemployment and inequality, andthat high levels of unemployment and inequalitycould deepen poverty. It argues that the Millen-nium Development Goal (MDG) of reducingpoverty is flawed in concentrating on achievinghigh growth and neglecting questions of howgrowth is distributed. This has led to povertyreduction due to rising incomes, but to increasedinequalities that have dampened the impact ofgrowth on poverty reduction (Omilola andAkanbi, 2014). The Ghanaian and Ethiopianstudies make a similar argument, that growinginequalities are undermining the progress ofpoverty reduction. As the Ethiopian study notes,‘inequality weakens the poverty reducing capa-bility of growth’ (Kedir, 2014: 2; see also Osei-Assibey, 2014 for similar arguments).

Recognizing different domains of inequalityand their linkages

There are three main domains of inequalities –economic, social and political – identified by thecountry studies. The UNECA study formulatesthis slightly differently when it argues that‘inequality is multi-dimensional with economic,social and political underpinnings’ (Armah et al.,


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2014). This formulation is useful in highlightingthe point that inequality is one phenomenon withdifferent dimensions. However, there is merit indiscussing the different domains or dimensions ofinequality. Economic inequality is mainly definedin relation to income and its distribution betweengroups. Armah et al. (2014) have a broaderdefinition which has three measures – income,assets7 and access to productive employment. Ithas been pointed out that income, wealth andconsumption have dominated inequality discus-sions because they directly contribute to thewelfare of individuals and families, define people’slife prospects, and the future of their children. Aswell, they shape other dimensions of inequality,particularly access to social services (Armahet al., 2014). The addition of productive employ-ment to the definition improves our understand-ing and appreciation of economic inequality, asemployment is an important source of incomeand assets.

One critical dimension of income inequality ismissing from all the papers. This concerns howtotal income is distributed between capital andlabour. Increasingly, it is being argued that howtotal income is distributed between individualsand households is only part of the story of incomeinequalities, and therefore, focusing solely on thisaspect will not address inequalities fundamen-tally, and would increase the costs of addressingpersonal income distribution (Mkandawire,2013; Lee, 2015). While this issue is beyondthe scope of this synthesis, it requires attention infuture work on inequalities.

The social dimension of inequality is associatedwith differences in access to basic social servicessuch as education, health care, housing, energy,water and sanitation, while political inequalitiesrefer to the differences in the possession andallocation of political resources in society such asvoice, participation, access to policymaking insti-tutions and processes, and government respon-siveness (Armah et al., 2014). See alsoNeckerman (2004) for a discussion of the conse-quences of social inequalities.

The value of identifying different domains ofinequality enriches and deepens our understand-ing of this most complex subject beyond the

traditional focus on income inequality and laysbare the linkages and contradictions among thedifferent dimensions of inequality. Several of thestudies discuss and demonstrate this in more or lessdetail. As one study argues, the fact that theamount of wealth and income a person has candetermine their access to social goods such ashousing, healthcare, education and other socialservices demonstrates the close link betweeneconomic and social inequalities (Armah et al.,2014). In the same vein, there are linkagesbetween economic and political inequalities.Whereas inequalities in economic resources canaffect the ability of citizens to influence govern-ment policies, elites in politics can also enactpolicies that will further improve or benefit alreadyadvantaged groups (Armah et al., 2014). Forexample, the Kenya study shows how the mono-poly of political power allows certain groups tocontrol economic and social power or how eco-nomic inequalities disable groups from access tosocial resources and thereby promote inequalitiesin the social domain. As the study argues,

‘economic activity generates the resources withwhich to invest in social goods, but the way inwhich these resources are accessed, harnessed anddeployed have a huge impact on the quality of lifeof the majority, which decision is largely affectedby the political context’ (Owiti, 2014).

Similarly, in relation to gender, inequality in onedomain influences inequalities in other domains.For example, imbalances in access to educationand formal institutions of power are reflected ininequalities in economic power (Wanjala, 2014).The Kenya study also found that women own lessthan 5 per cent of land as a result of institutionaland legal barriers, and this in turn affects theiraccess to financial services (Owiti, 2014).

At the same time, all three domains of inequalitydo not move in the same direction. For example,the experiences of women and ethnic minorities insome countries suggest that social and politicalexclusion can go hand in hand with reductions ineconomic inequalities. Thus women, regardless ofeconomic status, can experience social and polit-ical exclusion. On the other hand, impressive


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progress in increasing the number of womenholding parliamentary seats in African countriessuch as South Africa has not gone hand in handwith a reduction in wage inequalities between menand women. Thus, tackling one domain of inequal-ity does not necessarily assure progress in otherdomains. Even within the same domain, tacklinginequality in one area does not guarantee progressin others. The promotion of gender parity inprimary school enrolment has not translated intoaddressing inequalities in women’s access tohigher education or their access to paid non-agricultural work (Armah et al., 2014).

The three domains were discussed along severalaxes in the country studies – classified by wealthand income; type and sector of employment,gender, age – children, youth and aged; spa-tial/geography – rural/urban, ethno-regional,ecological zones – as they affect individuals (ver-tical inequalities) and groups based on identitiessuch as gender, ethnicity and religion; and inparticular locations (horizontal inequalities). Afew studies discuss spatial inequality as a domain(Kedir, 2014), or a dimension of the three domains(Osei-Assibey, 2014).

A complication in accounting for inequalities ishow the domains and axes intersect. This can beclearly seen in the data on gender inequalities. Asthe UNECA study notes, gender inequalities inter-sect with class and geography to disadvantageparticular categories of women even more thanothers. This issue is important in thinking aboutdifferent kinds of vertical and horizontal inequal-ities, as certain persons carry more disadvantagesthan others within particular social groups.

Identifying the drivers of inequality

The studies identify the drivers of inequality, inkeeping with the approach to inequality thatsuggests that it is not inevitable or accidental.Several drivers of inequality have been identifiedin the studies and other literature, and theseinclude historical factors, the inter-generationaltransfer of inequalities, contemporary policy fail-ures, socio-cultural practices and politicaldiscrimination.

With regard to historical factors, the develop-mental differences between northern and south-ern Ghana have been attributed to colonialneglect of northern Ghana (Osei-Assibey, 2014).On the other hand, some of the socio-economicinequalities in countries such as Kenya have beenattributed to the establishment of settler econo-mies, which are some of the most unequal, or theemergence of a land-owning capitalist group, as aresult of the dismantling of settler estates throughafricanization programmes in the early post-colonial periods (Owiti, 2014).

History is also important with regard toanother driver of inequalities. This concerns theinter-generational transfer of disadvantages. Chil-dren and adolescents from the poorest householdsare three times more likely to be out of schoolthan children from the richest households are. Aswell, children from the poorest households aretwice as likely to be stunted as children from therichest households, and as stunting affects edu-cational prospects, this is likely to be a factor ininequalities in educational attainment (Armahet al., 2014). This perpetuates inequality anddisadvantage over generations.

Another driver of inequalities is policy failures,inaction or neglect as well as the intended andunintended consequences of policies which createsome of the binaries in the three domains ofinequalities known as axes of inequalities. Forexample, decades of economic liberalization poli-cies have resulted in the expansion of informalwork and the increase in temporary, part time,sub-contracted jobs and self-employment and acontraction of formal work. As much as informalwork becomes the norm, so is low productivitywith underemployed, vulnerable workers in pre-carious labour conditions. This creates conditionsfor economic inequality based on access to decentemployment (Armah et al., 2014). Relateddichotomies such as rural and urban, exportcommodities-food crops dependent also structureinequalities in work and income. Inequalitieshave also been attributed to the emergence offinance capital as a key player in the globalpolitical economy. It has resulted in a smallnetwork of financiers who own much of the newwealth. It has been argued that investment


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decisions of this small group sometimes havemore critical impact than the economic policiesand interventions of national governments(Armah et al., 2014).

Sources of socio-economic power, which alsocreate inequalities, are the unequal distribution ofvalue producing resources – labour, animals,land, water, natural resources, technologies,financial power and weapons of coercion (Armahet al., 2014), distance from or proximity to powercentres and the governing elite (Owiti, 2014).Also important are differences in access to thestate, educational attainment, geography,demography, occupation, gender, race and class.

As regards political inequality, its main drivers havebeen identified as ethno-regional patronage, cronycapitalism and political exclusion (Owiti, 2014).

Those who suffer most from inequalities areuneducated women living in poverty, slum dwell-ers, pastoralists living in drought prone areas,subsistence farmers, the landless, the disabled, andthose with fragile livelihoods or who belong toindigenous minorities (Owiti, 2014).

Discriminatory cultural practices are also animportant driver of inequalities, particularly gen-der inequalities. Examples of such practicesinclude early marriages, which underminewomen’s education, and the gender division oflabour, which assigns women the bulk of repro-ductive work that remains unpaid and under-valued (Owiti, 2014). An institutional approachto gender inequalities argues that the state, thefamily, the community and the market conditionwomen’s and men’s ability to accumulate wealth,their access to land and natural resources, thesize and profitability of their businesses, and theiraccess to finances and political capital (Wanjala,2014).

Inequality of opportunities versus inequalityof outcomes

What kinds of inequalities should be the subject ofpolicy interventions? This question is examinedextensively by the UNECA study, which distinguishesbetween inequality in outcomes and inequality inopportunities, and more controversially, between

inequalities attributable to effort and thoseattributable to opportunities or circumstances. Thestudy argues that

‘there is an increasingly widespread normativeview that it is inequality of opportunity rather thaninequality of outcomes, which should inform thedesign of public policy. It is thought that publicaction need not necessarily aim to eliminate alloutcome inequalities, but may be justified inseeking to reduce those that arise from unequalopportunities’ (Armah et al., 2014: 11).

This position is based on the view shared bysome influential economists that inequality ofoutcomes is ethically acceptable if it arises fromindividual choices, but unacceptable if it is from‘opportunities, capabilities and circumstances’(Armah et al., 2014: 11).

This is a troubling argument on a number ofgrounds. First, the definitions of ‘effort’ and‘opportunity/circumstance’ are problematic.Effort is defined as encompassing factors overwhich individuals have a measure of control or acertain responsibility, such as the number ofyears spent in school and the nature of studiesundertaken, or the number of hours of work, etc.Circumstances, on the other hand, are defined asfactors that individuals have no control over,such as race, gender, physical conditions, familybackground, etc. These factors are generallypredetermined (Armah et al., 2014: 9).

The use of the phrases and words such as ‘ameasure of’, ‘a certain’ and ‘somehow’ suggeststhat there is unsureness about the claims thatindividuals have control and choice in the mat-ters being referred to. This is precisely thedifficulty with distinguishing effort from opportu-nity/circumstance. While we can assume thateveryone, including those who experience eco-nomic, social and political inequalities, hasagency which they exercise within the limits oftheir circumstances, it is a different matter tomake a clear distinction between inequalityoutcomes which are the result of effort and thosewhich are due to circumstances. Since educa-tional choices are made for minors by their


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parents and guardians, circumstances or opportu-nities are likely to be as critical as effort ineducational outcomes. Regarding educational out-comes based on effort and subject choices, there aremany examples of mediocre students who went tothe best schools and went on to be employed in thebest jobs because of family connections. Further-more, the ‘education as effort and choice’ argu-ments ignore the complicated structures ofinequality and its systemic character in payingtoo much attention to individual effort.

Thus, while it may be theoretically possible tomake such a distinction, how to make thisdetermination among the vast numbers of peopleexperiencing inequalities is not at all simple,feasible or reasonable in practice. On the otherhand, it can have damaging implications forpolicy efforts to address inequalities, providingammunition for those who blame inequalities onthose who are disadvantaged. The neo-liberaleconomics literature is replete with such justifi-cations, which are embodied in phrases such as‘perverse incentives’ and ‘moral hazard’, thatappear benign, but whose import is to discouragepolicies that take inequalities seriously.

The success or otherwise of policies which onlyfocus on opportunities will be assessed by bothopportunity and outcome indicators because theopportunity indicators are a means to an end, andthis creates an integral relationship between oppor-tunities and outcomes. For example, the point ofimproving access to health facilities is to reduce thetime and costs of accessing health care in order toincrease coverage, but most importantly to improvekey health indicators such as life expectancy andmaternal and infant mortality rates. It is pertinentto note that all the background papers and theUNECA paper use both opportunity and outcomeindicators in their discussions of inequalities. Whatthis implies is that policy should combine measuresthat target both opportunities and outcomes. Inany case, certain inequalities that are opportunitiesin some circumstances will be outcomes in others.This is best seen in the relationship betweenequality and inclusiveness. When growth isachieved through policies that enable people tobenefit from the fruits of growth while also takingpart in the productive activities that generate that

growth, the results are more inclusive and sustain-able than policies that only focus on the distributionof growth (Armah et al., 2014).

The nature of inequality in Africa

Economic inequality

Indicators and income inequalityMost of the studies used income, as either theonly measure or one of the several measures ofeconomic inequalities. For example, the Ethiopianstudy used income and land ownership as its twomeasures of economic inequality. Secondly, moststudies used the Gini Index to measure incomeinequality. For example, the Mauritius studyfound that income inequalities had increased inMauritius in the last 16 years (from 0.387 in1996 to 0.388 in 2006, and to 0.413 in 2012).The study argues that wealth was concentratedin the hands of a few people while the majority ofthe population lived in poverty, with the dispar-ities between the poor and the rich rising at analarming rate (Bunwaree, 2014). Similarly, inNigeria, income inequality had increased, andthis was associated with the traditional farmingpractices usually found in the rural areas (Ariyoand Olaniyan, 2014). The Senegal study reportedthat the Gini indices were 39.19, 38.98 and 41.3during the years 2009, 2010 and 2011, respec-tively, thus showing an increase in incomeinequality as well (Diene, 2014).

Only the Ethiopian study used both the Atkin-son’s Inequality Measure8 and the Gini Index.The study found more inequality in rural thanurban areas using the Atkinson’s InequalityMeasure and land ownership. However, it foundmore inequality in urban areas than in ruralareas using the Gini Index. The study also foundthat urban inequality had declined over the lastten years while the gap between urban and ruralinequality had also reduced. Consumption expen-ditures were also higher in urban than in ruralareas (Kedir, 2014). The differences in findingbetween the two measurements raise questionsabout the two measures that need to be resolvedto harmonize measurements.


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Another dimension of differences in data collec-tion on inequalities are those which measuredifferences within particular groups and those thatmeasure differences between groups. All studiesused a mix of these measures. For example, theSenegal study compared income inequalitieswithin groups and found higher inequalitieswithin urban areas, particularly in Dakar, thanin rural areas, and within certain ethnic groupssuch as the Wolof and Pulaar ethnic groups. Thestudy also recorded higher income inequalities inmale-headed households than in female-headedhouseholds (Diene, 2014). The Nigeria study alsofound that income inequalities were more preva-lent in rural than urban settings of Nigeria, andmore serious in the northern than southern partsof the country (Ariyo and Olaniyan, 2014). InSouth Africa, there were severe income inequali-ties in certain regions of the country (Omilola andAkanbi, 2014).

While in group/location inequalities are inter-esting and could have policy import, it is morerevealing to see the nature of income inequalitiesbetween rural and urban areas, among regions,among the different occupational groups, betweendifferent racial groups and ethnicities and betweenmen and women. The Kenya study demonstratesthe value of this latter approach with a discussionof a 2004 study that found that Kenya’s top 10 percent of households controlled 42 per cent of its totalincome, while the bottom 10 per cent controlledless than 1 per cent. The study also foundsignificant regional differences in the distributionof poverty, the most extreme being 21.8 per centfor Nairobi and 87.5 per cent for Turkana (SID,2004, see also Kenya National Bureau of Statisticsand Society for International Development (2013)for more recent statistics on inequality in Kenya).Most of the seven country studies found incomeinequalities between rural and urban areas. InGhana, there were also economic inequalitiesbetween northern Ghana and the rest of thecountry.9 In South Africa, the racial dimensionsof income inequalities were pronounced. Themajority of the black/African population were inthe low-income bracket whereas most of the whitepopulation was in the high-income bracket (Omi-lola and Akanbi, 2014).

EmploymentSeveral of the studies discussed employment andwork as an example of economic inequality. A fewstudies, however, considered employment as anissue in the social domain (Senegal, Nigeria, Kenyaand Ghana). In this synthesis, we discuss work andemployment as an indicator of economic inequal-ity. In Africa overall, women and youth had themost limited access to productive employment. In2012, 84.9 per cent of women were in vulnerableemployment as opposed to 70.6 per cent of men.Women were also more heavily concentrated insubsistence agricultural activities, informal work,and unpaid household work which, in addition tolow pay, also have poor working conditions. Youthemployment in Africa in 2012 was 12 per cent,while adult unemployment stood at 6 per cent(Armah et al., 2014).

The structure of the workforce also revealedinequalities between rural and urban areas, as wellas gender and educational differences in most ofthe countries examined. However, the contours ofthese differences could be country specific. Theunemployment rate in Senegal was 13.3 per centfor women and 7.7 per cent for men (Diene, 2014).In Nigeria, on the other hand, more men thanwomen were unemployed (Ariyo and Olaniyan,2014). The Kenya study found that in rural areas,female heads of households were more likely to beinvolved in wage work than male heads (31 percent and 16.8 per cent, respectively). In urbanareas, the opposite was true – male heads ofhouseholds were more likely to be in wageemployment than female heads (40.2 per centand 12.8 per cent respectively) (Owiti, 2014).

In relation to work, an important issue ofinequality is the amount of time spent on unpaidproductive and reproductive work. This is impor-tant because more time on unpaid work limits howmuch time can be devoted to paid work, andtherefore is a factor in income inequality andaccess to decent work. The Ethiopian study, forexample, found that married women worked fewerhours in the labour force and more at home, whilemarried men did the reverse. The average timeallocated to housework was 36 h for women and7 h for men, while for market work, the figure was16 h for women and 29 h for men. There were also


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differences between men and women in whether ornot they did housework at all. While almost allwomen did some housework, about half of menwere not involved. When men and women partic-ipated in housework, they performed differenttasks, with the proportion of women collectingfuel wood and fetching water two times that of men(Kedir, 2014).

Unemployment, a serious problem in several ofthe study countries, widens inequalities. In Mau-ritius, there were high rates of unemployment,particularly among the youth and women. Thishas been attributed to the increasing corruptionand collusion between the political and economicelite, jobless and unproductive growth, landspeculation, and the sale of lands to foreignersat escalating prices, as well as the nature of FDIS(Foreign Investment from Diverse Sources) (Bun-waree, 2014). In Kenya, people with no educa-tion were 1.7 times more likely to have no workthan people with secondary education were. Onthe other hand, urban dwellers with no educationwere twice as likely to be without work as theirrural counterparts were (Owiti, 2014). In Sene-gal, long-term unemployment (over a year) was amore serious problem for graduate heads ofhousehold (74 per cent) than for secondaryschool graduates (52 per cent), and this waspartly on account of the labour market segmentsoccupied by the two groups (Diene, 2014).

High rates of youth unemployment had severalramifications, and these are discussed in a few ofthe studies. The Senegal study found that highlevels of youth unemployment had resulted inillegal migration to Europe, drug use, and traf-ficking and theft. Many young people had beenexcluded from the labour markets and some hadresorted to the informal sector as a way to survive(Diene, 2014).

Social inequalities

IndicatorsThe studies used a range of indicators to measuresocial inequality. These included education,health and access to services indicators such as

life expectancy, under five mortality, maternaldeaths, immunization coverage, health servicedelivery and labour market participation (Kedir,2014). Several studies found unacceptable levelsof social inequality. For example, the Senegalstudy described social inequalities as serious,identifying health, education, employment andinfrastructure, as key areas of inequality. Thestudy also found that social inequalities had beenreinforced by the demographic imbalance ofhaving 62 per cent of the population under25 years old (Diene, 2014).

The country studies highlighted the connectionbetween economic and social inequalities inseveral ways. On the one hand, reductions ineconomic inequalities have failed to translate intolower levels of social inequalities in some cases.For example, the Ethiopian study argued that inspite of the reductions in economic inequalitiesbetween rural and urban areas, there remainedserious inequalities in service delivery and non-income and non-expenditure parameters. On theother hand, high levels of income inequality feedinto social inequality (Kedir, 2014). For example,the South African study argued that the highlevels of income inequality in South Africa hadfed into social inequalities in education, healthand land ownership. The study highlighted thehuge gap between the quality of public andprivate education systems in South Africa, espe-cially at the basic education level. Consequently,only middle- to high-income earners could accessprivate education with good quality delivery, anobstacle for many South Africans wanting toproceed to higher educational institutions (Omi-lola and Akanbi, 2014). The Kenyan study alsofound that income differences were replicated ininequalities in access to education. 50.8 per centof people in Nairobi had secondary education orhigher, compared with 3.3 per cent in TurkanaCounty. The Nairobi figure was 2.2 times thenational average (Owiti, 2014).

With regard to education attainment, therewere striking racial differences in South Africa.The white population remained the most edu-cated, with the majority holding diplomas, bach-elor degrees and higher certificates. The blackpopulation on the other hand did not usually


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complete high school, and had recorded highdrop-out rates (Omilola and Akanbi, 2014). Thesame trend was found in Kenya where only therich had access to quality education (Owiti,2014). Also, many children in urban areas inNigeria were unable to complete primary school.In addition, the children of the rich were usuallybetter educated than those of the poor majority(Ariyo and Olaniyan, 2014). Several of thestudies identified gender differences in educa-tional attainment (Ariyo and Olaniyan, 2014;Diene, 2014; Osei-Assibey, 2014).

In Senegal, there were large differencesbetween regions, as well as significant genderdisparities in certain regions with respect toprimary enrolment. There were also disparitiesbetween rural and urban areas in terms ofenrolment and literacy. Beyond enrolment, therewere striking inequalities in the distribution ofeducational facilities. For example, the DakarRegion in Senegal had 80 per cent of universitiesand graduate schools and their students (Diene,2014).

HealthThe health situation was no different fromeducation. Healthcare distribution in SouthAfrica was still not comprehensive. Althoughpublic healthcare was free for citizens, it was notwithin the reach of the majority of SouthAfricans. Where it was accessible, the quality ofhealthcare provided was inferior. There weredisparities between the public and private healthcare systems, and in all nine provinces, mosthouseholds had difficulty providing health insur-ance for at least one member (Omilola andAkanbi, 2014). In Kenya, the difference in lifeexpectancy between two regions was 16 years,while doctor patient ratios were 1: 20,700 in theCentral Province and 1:120,000 in the NorthEastern Province (Owiti, 2014).

In Senegal, there were rural–urban and regio-nal inequalities in access to health infrastructureand skilled personnel, rates of malnutrition,underweight and HIV/AIDS prevalence.Although the country had registered improve-ments in each of the above areas, these were notenough to bridge the rural–urban gap, even

in situations where urban areas were experienc-ing a noticeable deterioration in access. Forexample, in 2005, only 2 per cent of people inDakar took more than 1 hour to access healthfacilities. By 2011, this figure had increased to4.88 per cent. While in rural areas the percent-age had reduced from 39.65 per cent to 13.98per cent, it was still more than three times thefigure for Dakar (Diene, 2014).

In Ghana, the gap between the rich and thepoor with regard to health care access hadnarrowed because of the introduction of theNational Health Insurance Scheme (NHIS). How-ever, there were higher rates of maternal mor-tality in rural than in urban areas. In addition,children from poor households were twice aslikely to die before the age of five as children ofthe rich were (Osei-Assibey, 2014). Child mor-tality was also high in Nigeria, especially in thenorthern parts of the country. There was alsoevidence that a great majority of Nigerians didnot have access to modern medical facilities andskilled medical personnel (Ariyo and Olaniyan,2014). In Senegal, health care infrastructure andskilled health experts were unequally distributedin favour of urban areas. In addition, malnutri-tion was more serious in rural than urban areas(Diene, 2014).

Access to other servicesThe Senegal study is one of the few that examinedaccess to water and transportation as indicatorsof social inequalities. The study found a mixedpicture. While urban areas were generally betterserved than rural areas, Senegal had recordedreversals in urban areas. With regard to cleanwater for example, between 2005 and 2011,there were reversals in Dakar and other urbanareas in the percentage of people who took morethan one hour to procure water, while thefigure for rural areas had stagnated. The situationwas the same for transportation and educationalfacilities, where, in spite of better conditions inurban areas, difficulties had increased in someurban areas (Diene, 2014). This has beenattributed to lack of infrastructure, growingurbanization and high rates of rural–urbanmigration.


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Political inequalitiesThe political inequalities identified in the countrystudies were mostly based on class, age, genderand ethno-regions. In Kenya, the youth (18–35)were identified as the most politically excludedgroup in spite of their significant numbers (60 percent of the population). Ethno-regional inequal-ities were also serious, and the study providedstatistical evidence of the over-representation ofcertain regions in the cabinet, military, diplo-matic service and the public service duringperiods when presidents from those regions werein power. The figures also showed the grossunder-representation of regions of oppositionleaders considered hostile to the government(Owiti, 2014).10 The study also found that thepolitical elite in Kenya enjoyed the differentialapplication of public policies including economicmanagement tools such as fiscal governance, aswell as benefits accruing from office such asparliamentary remuneration and access to devel-opment funds. Other instances of elite capture offiscal governance include the fact that restrictionswere lifted on the involvement of public servantsin private businesses, and this in turn fuelledpatronage politics, corruption, tax avoidance andevasion, and was responsible for decisions such asthe suspension of the capital gains tax, whichbenefitted business sectors dominated by theruling elite. The passage of the post-electoralviolence constitution notwithstanding, theskewed distribution of political office along ethniclines continues to be a problem in Kenya (Owiti,2014).

The Mauritius study also found that discrimi-nation was a factor in political inequalities. Therewas discrimination against people of particularethnic groups, especially Mauritians of Africandescent, and certain religious groups. Somemembers of these groups responded to theirdiscrimination by lobbying for positions in thepolitical system. Other factors fuelling politicalinequalities were the lack of transparency inpolitical party financing and costly bureaucraticdemands on political parties which acted asbarriers to organized participation in the politicalsystem.11 Moreover, opposition parties did notappear to stand a chance of winning elections in

Mauritius. This situation, coupled with high ratesof corruption and discrimination, was reflected inthe worsening of Mauritius’s position on thecorruption index (from 53 in 2007 to 43 in2012), constituting a threat to the country’sability to sustain its democracy (Bunwaree,2014).

Gender inequalitiesAs has become clear in the preceding discussion,within the three domains of inequality, therehave been intersecting inequalities linked withclass, gender, kinship, ethnicity and geography.This segment highlights some of the findings ongender inequalities in the background paperdedicated to this study and in the seven countrystudies. This is to illustrate the linkages amongthe different domains of inequalities. Most of thecountry studies acknowledged a long history ofgender discrimination and resulting inequalitiesin education, health, politics, employment andland ownership. Global statistics on assets own-ership point to women being more constrainedthan men in acquiring and keeping assets. Inrelation to land specifically, women are disad-vantaged in relation to men in reported landownership, documentation of ownership, opera-tion, management and decision making (Dosset al., 2013). The Ethiopian study found that thediscrimination against women in social andeconomic spheres had been achieved throughoppressive social norms and unequal pay inlabour markets. Some of the social norms wereso severe that they prevented women in certainethnic groups from inheriting assets, makingindependent decisions in asset ownership, andparticipating in business and other occupations.It had also hampered their access to employmentin the formal sectors of the economy (Kedir,2014). In Nigeria, women did not have theopportunity to own certain categories of land dueto the particular form of patrilineal inheritancepractised in that country. Similarly, in Kenya,women owned less than 5 per cent of registeredlands, and usually faced several institutional andlegal obstacles in respect of land and propertyrights. These deficits have had a negative impacton women’s capacity to access the kind of


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financial services that would significantly supporttheir economic activities (Ariyo and Olaniyan,2014; Owiti, 2014).

The Ghanaian study found that women earnedlower wages than men did, regardless of theireducation, age and experience. The hourly earn-ings of women in Ghana were 57 per cent of thatof men. In addition, the majority of women werefound in non-farm self-employment and privateinformal jobs where earnings were relatively low,whereas the formal sector, where earnings werehigher, was dominated by men. In addition,women did not have control over many of theassets within households. For example, women insome parts of the savannah zone did not have theopportunity to own and control livestock, espe-cially the big ruminants. In other places wherethey could own livestock, women still needed thepermission of their husbands to sell their ownlivestock and, as such, they did not have absolutecontrol over their assets (Osei-Assibey, 2014).Similarly, women in Mauritius constituted 35 percent of the labour force, with a vast majority ofthem in low skilled, low paid and low status jobs(Bunwaree, 2014).

With regard to discrimination against women inthe political sphere, Wanjala noted that women’sparticipation in formal political structures andprocesses where decisions regarding the use ofnatural resources are made was insignificant.Women comprised 22.9 per cent of members ofparliament in sub-Saharan Africa, with countriessuch as Rwanda leading with 64 per cent, followedby South Africa at 45 per cent, Kenya at 19 percent, Ghana at 11 per cent and Nigeria having only7 per cent in the lower houses of parliament(Wanjala, 2014). In Ghana, women were alsopoorly represented in the executive branch ofgovernment, in major public administrative posi-tions, in the judiciary and within local govern-ment, all of which are critical sites of adjudicationand decision-making with far reaching economic,social and political implications (Tsikata, 2009;Osei-Assibey, 2014). Even in countries with affir-mative action measures in place, implementationwas sometimes a challenge (Tsikata, 2009). Forexample, although Mauritius had a protocol for 30per cent representation for women in parliament, it

continued not to meet this quota. In 2010, thecountry achieved 21.4 per cent representation forwomen in parliament.

Some of the factors that have resulted in thenomination of few women by their political partieswere the shrinking potential of female spaces in theface of male-dominated alliances and coalitions,gender biased socialization patterns, lack of finan-cial resources, the ‘‘first past the post’’ electoralsystem, and the widespread opposition to any formof affirmative action (Bunwaree, 2014). Therewere also high rates of discrimination againstwomen in Ghana’s political sphere, which hadresulted in the dominance of male representationin decision-making spaces such as parliament andother public offices. The representation of womenin both parliamentary and presidential electionswas poor, and progress very slow. This was in spiteof the fact that several women were interested inparticipating in electoral processes (Osei-Assibey,2014).

Gender-based violence is another marker ofgender inequality which very few of the studiesdiscussed. The Mauritius study reported highrates of domestic violence (Bunwaree, 2014). InGhana, female genital mutilation and the practiceof female ritual bondage (Trokosi system),although in decline, were prevalent in particularregions (Osei-Assibey, 2014).

The Kenyan study examined negative responsesto inequality, a very pertinent issue in understand-ing the repercussions of inequalities. The studyfound that the manipulation of demographic datafor economic and political gain was one of theresponses to inequalities. In Kenya’s devolutionprogramme, revenues to counties were allocatedon the basis of their population size. Some countieshad therefore increased their population numbersin order to attract higher allocations, and in onecase, a county grew from 900,000 to 2.3 million inten years. Other undesirable responses includedpolitical insularity, in which groups that consid-ered themselves disadvantaged only focused ontheir narrow interests. The study also identified taxevasion and non-compliance, particularly in theinformal economy, as an example of negativeresponses to inequalities of opportunity and access(Owiti, 2014).


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Development policy interventions and theircapacity to address inequalities

Trajectories of policymaking and programmingSince the 1980s, African countries have gener-ally pursued several economic stabilization andstructural adjustment policies largely aimed atachieving economic growth through economicliberalization and privatization. From the 1990s,several African countries took up political liber-alization and institutional reforms to promotegood governance, strengthen the institutionalbase of their economic and social policies andattract foreign direct investment. Multi-partyconstitutional rule became the dominant formof government, with countries taking up variousvariations of this system, albeit with differentlevels of success. Economic liberalization contin-ues to be the bedrock of policymaking andprogramming in the economic, social and polit-ical domains. While the studies did not directlydiscuss the capacity of economic liberalizationpolicies to address economic, social and politicalinequalities, the unanimous finding that inequal-ities have grown in all three domains wouldsuggest that tackling inequality was not a priorityfor these policies.

From the late 1980s, social safety net pro-grammes designed to give limited attention tosome of the deleterious effects of economicliberalization policies on segments of the popula-tion replaced the more universalist approach tosocial policy of the 1960s and ‘70s. From the2000s, tackling poverty became a serious policyconcern and the first Poverty Reduction StrategyPapers (PRSPs) were drawn up in several Africancountries. The first generation of anti-povertypolicies were replaced more recently by moreambitious development programmes which canbe loosely described as being aimed at structuraltransformation. Some of these more recent pro-grammes were derived from Continental initia-tives such as the New Partnership for Africa’sDevelopment (NEPAD)12 and its ComprehensiveAfrica Agriculture Development Programme(CAADP),13 as well as sub-continental policieslinked with regional integration agendas.

The trajectory of policymaking described above iscaptured in several of the country studies. TheNigerian study, for example, identifies twelve pro-grammes between 1982 and 2012, which are amixture of structural adjustment and privatizationprogrammes (1982–1993), national planning andpoverty reduction programmes (2002–2007), andlong range plans (2010–2012) (Ariyo and Olaniyan,2014). This is no different for Senegal (Diene, 2014),Ghana (Osei-Assibey, 2014) and Mauritius (Bunwa-ree, 2014). Diene has observed that for Senegal,progressively more comprehensive and multi-sec-toral programmes have been accompanied byincreased spending on social programmes since2000 (Diene, 2014).

This history of development policymaking hasattracted critical commentary. The Nigerianstudy notes that several of the initiatives wereexternally conceived and driven, and failed to bedomesticated. In their design and implementa-tion, the programmes were not inclusive, did notencourage popular participation and citizens’ownership, and were often short-lived becauseof regime change. Other shortcomings were thefact that they were implemented with scantregard for particular outcomes and impacts, andlacked a strategic framework to translate theminto targets and deliverables. Some failed toinclude safety nets to mitigate short-term nega-tive impacts and were not designed to addresslong-term development problems (Ariyo andOlaniyan, 2014). All in all, the results of all theprogrammes have not been commensurate withtheir stated objectives. The most important cri-tique of these policies, however, is the observationthat they either failed to reduce inequalities oreven worsened the problem (Ariyo and Olaniyan,2014). In the absence of systematic assessmentsof effects of these policies, it is difficult to attributeparticular policies to the rising inequalities in thevarious domains. However, it is possible to arguethat the sum of policies implemented since the1980s failed to make a dent in the problem ofrising inequalities. In the section that follows, wediscuss some of the more recent policies andprogrammes which are common to the countrystudies.


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Recent policies and programmes

Economic and social development programmesPoverty Reduction Strategy Papers, which coin-cided with the MDGs regime, marked a significantshift in economic policy and programming. BothGhana and Senegal had PRSPs while Nigeria hadthe National Economic Empowerment and Devel-opment Strategy I and II. Mauritius also adoptedpoverty alleviation programmes and established aMinistry of Social Integration (Bunwaree, 2014).The PRSPs were often accompanied by economicgrowth programmes, such as Senegal’s Acceler-ated Growth Strategy. The Senegal study arguesthat while the PRSP had resulted in more peopleacross Senegal being able to access water andelectricity, it had failed to address many of theMDGs (Diene, 2014).

The successor programmes to the PRSPs havetended to be more comprehensive and ambitious.For example, Senegal’s 2012 National Strategy forEconomic and Social Development seeks toimprove health and nutrition as well as access todrinking water, support universal education, theeradication of illiteracy and the promotion ofnational languages, thus addressing the mainsectors where social inequalities are more severe.14

The Ghana Shared Growth and DevelopmentAgenda (GSGDA I, 2010–2013, and II,2014–2017) is another example of thisapproach. It includes strategies for macro-eco-nomic stability, private sector competitiveness,agricultural modernization, sustainable naturalresource management, oil and gas development,infrastructure and human settlements, humandevelopment, productivity and employment andtransparent, responsive and accountable gover-nance. All these programmes share the fact thatthey are mostly geared towards economicgrowth, the enhancement of productivity, andpoverty reduction. The reduction of inequalitieshas, in most cases, not been a policy priority.

Sectoral policies and programmesThe development programmes under discussionare accompanied by various sectoral developmentprogrammes, some related to the real economy

e.g. agriculture and employment, and othersfocusing on social sectors such as socialprotection.

Social protectionSocial protection programmes in particular havebecome very popular since the MDGs wereinstituted. Ethiopia has one of the largest on theAfrican continent, the Productive Safety NetProgramme (PSNP). Other countries with similarprogrammes are Kenya, Mozambique, Malawiand South Africa (Kedir, 2014). Three socialprotection measures – cash transfer schemes(modelled on similar schemes from Latin Americasuch as Brazil’s Bolas Familia), health insuranceand youth employment – have been instituted inmany African countries, including the case studycountries. Ghana for example has adopted mea-sures such as the enrolment of the extremely poorand vulnerable in the National Health InsuranceScheme (NHIS), per-capita grants for schools tocover household education costs, a cash transferprogramme known as the Livelihood Empower-ment against Poverty (LEAP), a school feedingprogramme and a National Youth EmploymentProgramme (NYEP) (Osei-Assibey, 2014). Assess-ments have found that Ghana’s LEAP and theNHIS have reached some of the poorest people.However, both programmes do not reach themajority of the poor and have problems withsustainability. While the LEAP is donor-depen-dent, the NHIS is threatened by small premiumsrelative to its budget, and the fact that most of thecontributions come from payroll taxes, which areinadequate because only a minuscule percentageof the labour force is found in formal work.

In general, social protection interventions faceimplementation challenges and are limited inscale because of resource constraints, operationaldeficiencies, and corruption (Osei-Assibey, 2014).Beyond this, social programmes should be judgedby their reach and ability to solve multipleproblems, including inequalities and socio-eco-nomic development challenges. Because they arenow largely targeted at the poor, and focusmainly on protection, they are too limited inscope to perform many of the functions of social


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policy, including support for production andreproduction, redistribution, and social cohesion(ISSER, 2013).

Agricultural policiesIn relation to economic sector policies, agricul-tural modernization programmes are commonacross the case studies. For example, the Back toAgriculture Programme (BATA) was instituted inSenegal to deal with unemployment and toencourage participation in agriculture (Diene,2014). As a means to tackle gender inequalitiesin agriculture, the Agriculture TransformationAgency (ATA) in Ethiopia established a sectorspecific programme of gender mainstreaming topromote gender equality in all aspects of theirwork (Kedir, 2014). While these various effortshave supported smallholders who constitute themajority of Africa’s labour force, questions havebeen raised about their success with tacklinginequality in agricultural policies and policyoutcomes (Kedir, 2014). Diene (2014) hasargued that the BATA programme did notaddress inequalities arising from employmentbecause the educational system had not preparedpeople to work in production. Thus, the lack ofcoordination between policy sectors was under-mining the aims and objectives of the programme(Diene, 2014).

Employment policiesA few countries have programmes to addressunemployment. A good example is Senegal’s NewNational Employment Policy (NNEP), whichaimed to provide 700,000 new jobs between2010 and 2015, the National Action Plan forYouth Employment (PANEJ), the National Fundfor Youth Employment (FNPJ) and the NationalAgency for Youth Employment (ANEJ). All theseprogrammes aimed at integrating youth withinthe labour market and supporting youth-ledbusiness projects in agriculture, fisheries, textiles,ICT and tourism (Diene, 2014). Similarly, thegovernment of Ghana designed the NationalYouth Employment Programme to create jobsfor unemployed youth. Targeting particular sec-toral problems has become the preferred

approach to development issues. In the case ofyouth unemployment, job creation for youngpeople has not been particularly successfullargely because unemployment is not simply asectoral problem. It requires macro-economicpolicies and social policies which translate intoeconomic growth that generates decent work inthe key sectors of the economy.

Decentralization and regional developmentSince the 1990s, there have been renewed effortsin several African countries to tackle ruralunderdevelopment through decentralization poli-cies. These are aimed at empowering localgovernment entities to deliver basic services totheir communities and strengthen subsidiarity ingovernance. Decentralization has different ele-ments – administrative, political, and fiscal,which point to different degrees in decentraliza-tion programmes in different countries. Therehave been different forms of administrativedecentralization – de-concentration, delegationand devolution, the most far-reaching of thesebeing devolution. Kenya’s devolution programmeis arguably its most important effort to deal withspatial inequalities. The Kenya Constitution pro-vides that a minimum of 15 per cent of govern-ment revenue be given to the country’s 47counties. Laws have been passed since then toestablish how the revenue will be shared and howcounties would receive the revenues, and insti-tutions have been tasked with ensuring thatresources meant for the counties have beenbudgeted and disbursed. There are also arrange-ments to ensure that, on the basis of their relativepoverty, counties receive equalization grants. TheKenya devolution programme is supported byseveral institutions and programmes.15 Whilethese programmes may have improved welfare tosome extent, they have been adjudged not tohave significantly reduced socio-economicinequalities, either because of pre-existing differ-ences at their initiation, or technical weaknesses,poor prioritization, and elite capture (Owiti,2014). It remains to be seen the extent to whichdevolution in Kenya will succeed in reducinginequalities.


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Ghana’s Savannah Accelerated DevelopmentAuthority (SADA) is another example of a pro-gramme to tackle spatial inequalities, this timebetween northern and southern Ghana. It aims,through a series of coordinated interventions, tocreate employment, reform agriculture tostrengthen value addition, improve the assetsbase of poor farmers and invest in irrigation andother technologies. SADA is yet to establish itselfas a credible intermediary for northern Ghana’sdevelopment, has experienced challenges withfunding and has had its reputation tarnished byallegations of corruption and mismanagement(Osei-Assibey, 2014).

Legal and institutional reformsLegal and institutional reforms have been addi-tional approaches to certain inequalities. Forexample, to tackle the problem of gender inequal-ity, Ethiopia passed a Family Law Amendment in2000 to raise the legal age of marriage from 15 to18 years, give women a greater say in thedecisions about marital property, and providespouses the freedom to work outside the housewithout obstruction from either spouse. This lawallowed girls to stay in school longer and improvetheir labour market prospects (Kedir, 2014).Mauritius also passed legislation on corporatesocial responsibility (CSR), making it mandatoryfor all companies to allocate 2 per cent of theirnet profits to non-governmental organizationsworking to improve welfare. As well, the govern-ment announced a programme of democratiza-tion of the economy. As in all other cases, thesepolicies may have reached a few, but have notaddressed the increasing concentration of wealth(Bunwaree, 2014).

Ethiopia also established a Ministry of Women,Children and Youth Affairs and improved thenumber of seats held by women in its parliament(Kedir, 2014). Similar efforts to tackle genderinequalities have been made in Kenya (seeWanjala, 2014, for details on legal efforts totackle gender inequalities in Kenya).

In addition to the policies and programmeswhich are common to several countries in ourcase studies, there are specific programmes thataddress particular crises rooted in inequalities.

Kenya’s National Accord and Reconciliation Actof 2008 (NARA) is a good example of this. NARAis a political pact among the Kenyan elite to stoppolitical violence, and establish a coalition gov-ernment to stem the violence in the aftermath ofthe 2007 elections.16 In spite of its challenges, itwas an important attempt which yielded a new,more progressive constitution with a bill of rights,affirmative action to address representationalinequalities, and devolution (Owiti, 2014). Mostimportantly, the constitution represented thesuccess of long years of advocacy by certaininterest groups, such as the women’s movement,to protect themselves against the most overtforms of discrimination, disadvantage and exclu-sion (Owiti, 2014). The amended constitutionnotwithstanding, women still face structuralbarriers such as financial constraints, and a malechauvinist political culture characterized by vio-lence and intimidation. So far, this has largelyprevented women from fulfilling the promises ofthe 2010 Constitution (Owiti, 2014).17

The discussion of the state of inequalities in theprevious section suggests that the policy andprogrammatic framework as well as specificmacro-economic and sectoral policies have suc-cessfully reduced poverty levels in some coun-tries. However, they have failed to stem, and insome cases have been responsible for, risinginequalities over the years. As most of thecountry studies found, policy and programmaticinterventions have focused on tackling poverty,with the reduction in inequality seen as a by-product of poverty reduction. Cecile Jackson’scritique of policies that address women’s povertyis instructive in this regard. As she points out,policies that tackle women’s poverty do notnecessarily address gender inequalities, and insome cases could even worsen them (Jackson,1996). This lesson can be extended to otherinequalities.

In any case, according to at least one countrystudy, the prospects for tackling inequalities atthis juncture are not good. Ongoing fiscal con-solidation and tight monetary policies aimed atreversing high budget deficits in several countrieshave proved to be a threat to reducing inequality.In Ghana, for example, measures such as the


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removal of energy subsidies and the growing debtstock, which is keeping interest rates very high –above Africa’s average – are worsening povertyand inequality (Osei-Assibey, 2014).

Inequality and structural transformation:comparative experiences and lessons

What do these policy deficits and persistentinequalities mean for structural transformation?Structural transformation is defined by fourprocesses which are largely economic and demo-graphic: the declining share of agriculture in GDPand employment; rapid urbanization as a result ofrural–urban migration; the rise of an industrialand service economy; and a demographic transi-tion from high to low rates of births and deaths.The outcome of these processes is that agriculturewould be no different from other sectors in termsof productivity of labour and capital and thelocation of poverty, and the economy enjoyssustained growth and development because of itsdiversification and high levels of value additionand productivity of all economic activities (Tim-mer, 2012).

On the basis of these criteria, most Africancountries have not yet experienced structuraltransformation. Instead, they have experiencedrapid labour migration out of a stagnatingagricultural sector into an informal servicessector with even lower productivity levels, whichtherefore does not contribute significantly tooverall economic productivity (Ariyo and Olani-yan, 2014). While the Ethiopia study argues thatstructural change has taken place in Ethiopiabecause the service sector has overtaken agricul-ture, the authors point out that its service sectoris predominantly informal and unprotected, andwomen are in the majority of those who operatein it. As well, it is characterized by low returns,low technology, low productivity, and is unableto transform the lives of those who work in it. Thestudy therefore recommends state intervention toprovide productive capital and support the for-malization of the sector (Kedir, 2014).

The nexus between inequality and structuraltransformation is discussed in two ways in theUNECA study.18 The first is the impact of

inequality on structural transformation, whilethe second is the impact of structural transfor-mation on inequality. In relation to the first, thestudy argues that in the absence of robustempirical and theoretical data about the impactof inequality on structural transformation, thiscan only be inferred from the literature that linksinequality and economic growth. The majority ofthose studies argue that inequality has a negativeeffect on growth. This is because initial inequalityaffects the ability of economic agents to partici-pate effectively in economic activity and thereforeresults in the misallocation or under-utilization ofresources. This will slow the pace of growth andpossibly of industrialization and structural trans-formation (Armah et al., 2014).There are at leastthree channels through which inequality affectsgrowth. First, initial inequality in resourceendowment affects the ability of the poor toborrow for productive investments from imperfectcapital markets. Thus, capital market imperfec-tions not only perpetuate inequalities, but alsolead to the under-utilization of resources, lowinvestment, low pace of growth and industrial-ization. Secondly, such inequality has adverseeffects on investments in human capital andsocial reproduction, which creates a vicious cycleof low human capital development, high fertilityand poverty. A third channel is how the lowincomes of the majority of the population have anadverse effect on the size of the domestic markets(Armah et al., 2014).

With regard to the impact of structural trans-formation on inequality, the UNECA study arguesthat African policymakers can benefit fromlearning about conditions under which structuraltransformation reduced inequalities while gener-ating wealth. The study therefore compares andcontrasts the experiences of countries thatachieved reductions in inequalities and thosethat did not. The report notes that in WesternEurope and North America, industrializationplayed an important role in structural transfor-mation by increasing the demand for certainskills and creating the need for educationalreforms to facilitate labour intensive production.These reforms were associated with increases inworkers’ productivity, incomes, and assets


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accumulation, thus leading to a gradual declinein inequalities. In the case of Taiwan and SouthKorea, economic growth was not associated withrising inequalities in the early stages of theirdevelopment. This is because land reforms andimproved agricultural extension services con-tributed to increased agricultural productivity,leading to poverty reduction. This suggests thatgrowth in both industrialization and agriculturereduced inequalities.

In the case of Latin America, import substitu-tion industrialization has been credited withcontributing significantly to reducing inequality.Brazil and Mexico enjoyed rapid economicgrowth, which increased employment opportuni-ties until the industrial and debt crises of the1980s resulted in the collapse of import substi-tution industries, a reduction in the size of theunionized working class and negative growth.This then resulted in increased inequalities.

More recent analysis about the relationshipbetween inequalities and structural transforma-tion has argued that while structural transfor-mation can reduce absolute poverty, it is oftenaccompanied by rural–urban and regionalinequality, and therefore it is important to man-age the transformation to control the increase ofdisparities. China illustrates this situation inundergoing transformation while remaining lar-gely unequal. This is in spite of its enviablegrowth record since the 1980s and progress inpoverty reduction, as a result of agricultural andland reforms which gave farmers more space.While this has achieved a more equitable distri-bution of income, the adverse effects of trade andfinancial liberalization have resulted in increasedincome inequalities between rural and urbanareas. Better-off industry workers were moreheavily represented in urban areas. Similarly, inIndia, while the information technology revolu-tion resulted in economic growth and reducedpoverty, the skill intensive nature of the servicessector and its small share of employment hasincreased income inequality (Armah et al., 2014).

In Malaysia, privatization and liberalization inthe mid-1980s were associated with risinginequality. In order to keep exports competitive,Malaysia opened up to foreign workers to drive

wages down. This worsened income inequality, asituation ameliorated by affirmative action infavour of indigenous Malaysians. The result wasa reduction in inter-ethnic income inequality.This is now being reversed by Malaysia’s recentshift to capital-intensive production, which hasdriven up the wages of a small segment ofworkers.

Russia, on the other hand, had a differentexperience of inequalities. In the socialist era,industrialization went hand in hand with lowlevels of inequality because of the emphasis onthe production of food and consumer goods. Theoverthrow of this system and the re-introductionof market liberalization resulted in de-industrial-ization, price rises, and the collapse of real wagesin the agricultural and manufacturing sectors.This resulted in rising income inequalities wors-ened by energy becoming the leading sector of theRussian economy. The capital intensiveness ofthe sector and its demand for highly skilled highlypaid labour created enclaves that drove upincome inequalities.

In the Nordic countries, centralized pay nego-tiations, unionization, the collective managementof resources, progressive taxation and universalsocial security systems kept inequalities at bay,even in the 1980s and 1990s, when manycountries were experiencing rising inequalities.Other studies have identified the central role ofthe developmental state and governments indriving change through long-term planning(Kedir, 2014).

The cases discussed above and the limitedexperiences structural transformation in Africaare instructive. South Africa and Kenya, two ofthe most industrialized countries in Africa, didnot undertake progressive land redistribution.The Ethiopia case complicates the discussion ofland redistribution. Ethiopia’s land redistribution,which took place in the 1970s, appears not tohave positively affected its wealth inequality, norhas it transformed agriculture or increased agri-cultural productivity in Ethiopia (Kedir, 2014).The lesson is that transformation – characterizedby the predominantly informalized, low returns,low technology, low productivity service sectorovertaking agriculture in its contribution to


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GDP – which has occurred in Ethiopia, Ghana,Senegal and other countries, does not reducepoverty and inequality and transform the lives ofpeople, even if it is optimistically referred to asstructural transformation (Kedir, 2014).

From the foregoing, it is clear that differentcountries have experienced different interactionsbetween structural transformation and inequali-ties, with a range of factors in a complex interplaywith the initial conditions of a country todetermine outcomes. Countries need to determinethe kind of transformation they wish to pursue,understand what is required to achieve this, andapply measures that would ensure successfultransformations that also reduce inequalities.

Toward economic structural transformationand equitable and sustainable societiesin Africa

This review essay has a number of messages. Thefirst is that inequalities are not an inevitable resultof economic growth or structural transformation.They are driven by history and initial conditions,current policies and inactions. Therefore, theycan be solved by policies that alter initial condi-tions and aim to reduce inequalities. In thisconnection, an important message is that eco-nomic growth should be driven by those sectorsthat have the best possibilities for backward-forward linkages and generate high qualityemployment. Growth that is dependent on natu-ral resource extraction and services with verylimited backward and forward linkages withagriculture, has not been pro-poor or inclusive.In other words, who benefit from economicgrowth depends on the drivers of growth, thequality of growth, and its distributional effects.Therefore, economic growth, though necessary,is not sufficient to bring about the social andeconomic transformation that reduces povertyand inequality in its various dimensions.

Secondly, inequalities which are found in threebroad domains (economic, social and political) andon several axes (class and occupation, gender, race,ethnicity, generation and space – region; ruralurban; agro-ecology) are interlinked and reinforceeach other. At the same time, progress in reducing

inequalities in one domain does not necessarilytranslate into progress in another domain. Thustackling inequalities is a complex task, particularlyin a period where dominant policy choices deepenrather than address inequalities.

While economic, social and political inequali-ties are common to all countries, how particularinequalities present themselves depends on thestructure of each country’s economy, its socialstructure and political systems as well as policychoices. This implies that while some policies maywork in all countries, policy details have to takethe specificities of each country into account. Arelated finding is that inequalities in all threedomains are growing across Africa between ruraland urban areas, between regions within acountry, between occupational groups, ethnicand racial groups, between the general popula-tion and young people, and between men andwomen. This is in spite of economic and socialpolicies that are geared towards tackling povertyand related developmental challenges. Part of theproblem is that poverty and inequality are not thesame and policies directed at reducing povertywill not necessarily reduce inequalities and viceversa. This implies that policies have to deliber-ately tackle inequalities, a departure from theanti-poverty measures that were considered aproxy for addressing inequality.

Social policy continues to be of vital importanceto reducing inequalities. However, its currentfocus on social protection needs to be expanded inscope to support production and redistribution ofthe benefits of growth and should be funded bystates to reduce donor dependence. Anothersocial policy recommendation is the equal distri-bution of quality physical infrastructure in orderto ensure the more even spread of investments toreduce spatial inequalities. In addition, there wererecommendations of investments in education toboost skills across the economy, land redistribu-tion and farmers’ training programmes. Anotherimportant recommendation was to support infor-mal sector trade and agriculture to reduce youthunemployment.

Paying attention to inequalities in particularsectors is important. For example, several studiesemphasized the creation of productive


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employment through improvements in labourmarket access and the quality of jobs, rather thanincome distribution, as key to reducing inequal-ities and promoting structural transformation.While direct attention to particular sectoralinequalities had achieved reductions in povertyand inequalities, contradictions between eco-nomic and social policy agendas made such gainsunsustainable. This points to the need to ensurethat both economic and social policies, as well asmacro and sectoral policies, work in tandemtowards the goal of reducing inequalities, anddraw synergies from each other.

With regard to the relationship between inequal-ities and structural transformation, lessons fromother countries were instructive. Those countrieswhich had strong social policies to accompanytheir processes of structural transformationwhether these were land reforms, redistributivepolicies or investments in sectors with substantialproportions of the labour force, tended to controlrising inequality. The lesson learned here is two-fold: it identifies which policy options wouldsupport structural transformation and which oneswould ensure that inequalities are reduced.

A key demand from several studies was afundamental change in the culture of policymak-ing to ensure the full participation of all citizensand the coordination and alignment of thenumerous economic and social policies, includingtheir systematic evaluation.

Last but not least, due to grave data challenges,few of the studies were able to comprehensivelyreview the situation with inequality and struc-tural transformation, determine the most effectivepolicy and programmatic approaches, and mon-itor their implementation. This is an urgentquestion that requires an Africa-wide approachto data collection to reduce costs and ensure thatdecisions are based on high quality data. Relatedto this, there is the need for clarity on the kind ofdata and indicators to be collected as a priority.For example, it would be important to determinewhich inequality index to adopt and whichindicators to use for the different domains ofinequality. Omissions in data collection, such asthe total income distribution between labour andcapital, would then receive full attention.

This essay, though limited in scope and chal-lenged by incomplete data, provides a preliminarybasis for setting an agenda of research andadvocacy to support African and country effortsto tackle the deepening inequalities and achievestructural transformation.

Acknowledgments

I am grateful to Sylvia Marfo for research assis-tance and to Bartholomew Armah, Alex Cobham,Yao Graham, Takyiwaa Manuh and Stefano Pr-ato for very useful comments on an earlier draftof the article.


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Notes

1 This is in contrast with West Africa, where the Gini coefficients in Cote d’Ivoire, Mali and Niger dropped between7 and 10 points within similar periods. Looking at Africa as a whole, out of 35 African countries with data, 37.1per cent experienced an increase in income inequality while 54.3 per cent experienced a decline between 1990and 2012. In Asia, a higher percentage of countries experienced rising inequalities, while in Latin America,there were net reductions in inequality in this period (Armah et al., 2014).

2 While these statistics are stylized, and it is unclear what precisely these assets and wealth consist of, we assumethat that they measure some of the components of wealth, income and assets we discuss in this article.

3 In both the Common African Position on the post 2015 Development Agenda and the African Union Agenda2063, African countries have prioritized structural economic transformation as a strategy for inclusive,sustained and sustainable development (Armah et al., 2014).

4 Africa-wide Conference on ‘Inequalities in the Context of Structural Transformation’, which was held in Accra,Ghana, on 28–30 April 2014. Under the leadership of the Government of Ghana (with the facilitation of theNational Development Planning Commission), the Conference was organized by the following institutions (inalphabetical order): Council for the Development of Social Science Research in Africa (CODESRIA), Institute ofStatistical, Social and Economic Research (ISSER), Society for International Development (SID), Third WorldNetwork Africa (TWN-A), United Nations Children’s Fund (UNICEF), United Nations Development Programme(UNDP), United Nations Economic Commission for Africa (UNECA), United Nations Millennium Campaign(UNMC).

5 South Africa and Kenya are at one extreme with Ethiopia and Mauritius at the other end, while Senegal, Ghanaand Nigeria are in the middle.

6 These include increased savings by rich people resulting in increased investment, and the motivation of poorpeople to work harder to increase growth and discourage the use of taxation to address income inequality (Kedir,2014).

7 Assets have been defined as the stock of resources such as savings, vehicles, real estate, mortgages, mutualfunds, stocks and bonds. Armah et al. point out that assets are key indicators of wealth and poverty, provide amore reliable and stable measure of wealth than income and are an indicator of social status. They also can beused to access goods and services in place of money (Armah et al., 2014).

8 The Atkinson Index is a welfare-based measurement of inequality. See Kedir (2014) for a discussion of itsparameters.

9 Factors accounting for this situation include the history of neglect of northern Ghana dating back to the colonialperiod, the extreme nature of droughts, flooding and windstorms, the dependence of most of the inhabitants on asingle source of provisioning, and the non-inclusive governance practices and dereliction of duty by someofficials (Osei-Assibey, 2014).

10 Ethno-regional inequalities were a factor in Kenya’s electoral violence of 2007/08, fuelled by the belief thatpolitical power enables the ethnic group of the President of the Republic to enjoy unprecedented patronage andexclusive access to economic and political resources. These include control over institutions and decisions thataffect welfare, such as employment and public contracts (Owiti, 2014).

11 For example, the requirement that political parties submit a balance sheet to the registrar of associations or theMauritius Revenue Authority requires expenditures, which add to the cost of the political system.

12 An economic development programme of the AU adopted at the 37th Session of the Assembly of Heads of Statesand Governments in 2001.

13 Adopted as a NEPAD programme in 2003 to help Africa reach a higher path of economic growth throughagriculture – led development which eliminates hunger, reduces poverty and food insecurity and enables theexpansion of exports.

14 In addition, the Document of Economic and Social Policy, the National Strategy for Economic and SocialDevelopment (2013–2017) and the Plan for Emerging Senegal (2014) are to increase wealth, welfare and socialdemand; to tackle unemployment, gender inequality, and promote social protection and sustainabledevelopment.

15 These include the District focus for Rural Development (DFRD), the Local Authority Transfer Fund (LATF),Safety Net Programs, the Anti-Poverty Commission, the Gender Commission, The Constituencies DevelopmentFund (CDF), Free Primary Education (FPE) and Decentralised Public Health Services (Owiti, 2014).

16 Some of the initiatives under NARA were aimed at addressing horizontal political, social and economicinequalities. These included a comprehensive constitutional review, land reform and poverty alleviation.

17 In a few cases, e.g. cabinet secretaries, women occupied 30 per cent of positions. However, as ethno-regionalpatronage still revolves around men, it was reported that men from certain ethnic groups felt aggrieved that


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women were appointed to the only cabinet secretary positions given to their communities. This also points tosome of the challenges of implementing affirmative action designed to tackle multiple sources of inequalitiessimultaneously (Owiti, 2014).

18 As this is the only study that theorizes structural transformation in any detail, this section relies mainly on itsinsights.

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