Transition in Sub-Saharan Africa: Agriculture, Urbanization and Income Growth

Econometric analysis of some 40 years of data has provided mixed results, because of the defects of the data, and because there are some relatively sudden structural economic shifts. An important shift is when agricultural labor ceases to grow, now happening in sub-Saharan Africa (SSA). A model of the interrelationship over time of the rural, mainly agricultural sector, and the urban, mainly manufacturing and service sector, is proposed. Each provides a market to the other. Growth in both requires investment, but of distinctly different types. Their interaction results in an S-shaped curve. Many SSA countries are in the acceleration phase, and its agriculture, particularly in semi-arid areas, is increasingly oriented to the growing home market. Case studies show farmers have invested and adopted new technologies but the transition to an urbanized economy has been hindered by poor policies. The current need is for appropriate investments and policies to develop the productivity of the urban sectors, so that they can continue to stimulate agriculture, and provide jobs for those who are leaving farming.