The need for African economies to reposition in the context of the current globalising world is considered an overdue event. The reawakening is considered paramount to award the majority of the poor in Africa with a decent life. Some of these initiatives have given birth to, among others, the New Partnership for Africa’s Development (NEPAD). The NEPAD document (2001) defines it as a pledge by African leaders, based on a common vision and a firm and shared conviction that they have a pressing duty to eradicate poverty and to place their countries, both individually and collectively, on a path of sustainable growth and development. The declaration of NEPAD is in contrast with the declaration of Commission for Africa established by the British Government. The Commission states that the initiative is “Our common interest”.

The two declarations are of interest because of their focal area, and therefore, are imperative for the African development. The questions that are being raised are whether the two approaches are using different routes, and whether there is any possibility of convergence at the implementation stage. The issue that is being emphasised is the ownership of initiatives. The statement presupposes that much literature on African growth concentrates on what Africa needs to develop, underplaying the importance of ownership of such developmental initiatives. The problem is further compounded by the general consensus that the only way to develop Africa is through higher economic growth. Perhaps this is a bit of an exaggeration in Africa as the alternative is rarely ventured into.

African development is discussed in relation to the need for more foreign aid to the continent. Aid here is conceived as Official Development Assistance (ODA). It includes both financial and technical aid, and lending by multinational financial institutions and other official flows.

The challenges that confront Africa on a daily basis have become common knowledge. They have existed for such a long time that they are regarded as inseparable from the African continent. These challenges include high inflation rate, high debt to Gross Domestic Product (GDP), macroeconomic instability and debilitating poverty conditions. It is important to note that, in both the NEPAD’s document and the Commission for Africa’s report, there is mention of the common problems that confront Africa.

The Commission for Africa emphasises aid and high flows of different forms of assistance as the panacea for Africa’s sluggish performance, assuming the environment is conducive. On the other hand, NEPAD emphasises the need for Africans to strive for repositioning to regain a rightful place in the world order. Interestingly, the two do not seem to contradict in principle though the foundations are different. The former deals with what Africa needs to get, while the latter highlights the need for Africa to strive for a better place.

The underlying problem of the two initiatives is the strategy they pursue. They overemphasise the importance of economic growth as measured by GDP, and this is used as a strategy to alleviate poverty. This thinking ignores the teachings of history; most African economies have experienced positive growth, but the same results have not been observed in poverty levels. The same story can alternatively be told through the Millennium Development Goals (MDGs). There is now voluminous research that agrees that if Africa is to continue on the current performance, it falls far behind in achieving the MDGs by the targeted date of 2015. There is a challenge to this effect: in 2004 Namibia was estimated to have grown by 4.4 per cent, Lesotho by 3.4 per cent, South African economy by 4.3 per cent, Angola by 11.2 per cent, Mozambique by 8.4 per cent. These growth rates compare with the average for sub-Saharan Africa’s rate of 4.6 per cent and that of Africa at 4.5 per cent. It is noteworthy that though countries have been experiencing positive growth, the increase falls short of meeting the MDGs’ target of achieving seven per cent of GDP per annum. This is with the marginal exception of Mozambique and Angola with a realised growth of 8.4 and 11.2 per cent respectively.

It has also been noted that though economic growth is highly associated with poverty reduction, some of the ways to achieve growth can offset or outweigh poverty reduction initiatives. The situation can best be presented by assuming a situation of increased economic growth, but in which, income shares tilted towards capital and skills. This directly offsets the poverty reduction initiative, as most developing countries have a high proportion of unskilled labour.

The incompleteness of explaining poverty reduction through economic growth alone can be explained by introducing social variables: health, education and inequality; climatic conditions; political conflict or instability, and access to services. In cross-country regressions using GNP per capita, it is found that when social variables are not included, the results suggest that about 41 per cent of the variance in poverty incidence between countries is unexplained by differences in GNP per capita alone (Lipton and Litchfield 2001). There must be a better explanation on how to close the gap on variance.

In order to move closer to the targeted date, a massive injection of aid is expected to do the miracle to development, maybe the miracle could happen, but there is still a missing link.

Experience in the economics of African growth shows that, ‘Foreign aid can provide critical support when there is society’s desire to reform, but aid cannot “buy” reform’ (World Bank 2001). With the agenda of African renaissance marred by confusion and contradictions as intellectuals get bogged down in concepts, the direction that needs to be followed seems to be even more confusing. Nonetheless, all debates have a common premise which, as the Commission for Africa (2005) puts it, history tells us that the involvement of the industrialised world in Africa is a miserable history of broken promises, and maybe of unfair manipulation. The question of ownership of initiatives becomes paramount. The Commission for Africa may bring capital into Africa; but there is a possibility that a positive change will be slow to come by, especially if some quarters of Africans consider NEPAD as their commitment, and the Commission for Africa is interpreted in historical terms of untrustworthiness and hegemony. It is believed that the positive intentions of the two initiatives could be enhanced with the merging and convergence of implementation strategies. This is what determines the magnitude of the success rate, as measured by accelerated economic growth and subsequent development, and poverty reduction.

The approach of conventional economics to the problems of Africa underplays the nature of the problems on the ground. Better put, there is a lack of comprehension of the multi-faceted nature of poverty in Africa. Increasing GDP will in most cases fail to address the problems of poverty, because there is high in-country inequality. There is a high uneven distribution of income, with much of the wealth concentrated in smaller sections of the population. The majority of the poor do not have access to most of the amenities brought about by economic growth (GDP per capita). Some growth researchers have gone to great lengths advocating that a distribution-neutral growth will not help countries to do better (Ravallion 2001). This state of affairs calls for exploring the alternative approach, or more austerely, a complementary approach to the economic growth story.

The complementary approach should be looked at as a geographically targeted programme. Different places within a country are endowed differently; therefore geographically targeted programmes are likely to increase the benefits to those who most need them. This is in contrast with the GDP approach where the benefits accrue to all at the same weight, but only those who adopt better to a new changing environment benefit the most.

The majority of poverty surveys use representative regions to assess the level of poor households. The important consideration here is that, though surveys do not say which areas in which district have the poorest people, it is a shortfall of such surveys to give concise information on the level of household poverty. This is particularly important because different regions and districts have different resource endowment and different levels of poverty. It would therefore be a blanket approach, and falling short of achieving intended objectives. The blanket approach comes in the form of macroeconomic driven policies aimed at reducing poverty. It is however acknowledged that sound macroeconomic policies are a precondition for rural development. It is worth noting and widely acknowledged that economic growth by itself is not sufficient to reduce poverty. This is not a new idea, as Ravallion (2001) had observed that it is not the rate of growth that matters but the distribution-corrected rate of growth.

Policy design in most developing countries tends to concentrate on agriculture as the primary drive of the poor. This is mainly because poverty is generally a rural phenomenon especially in Africa, and the means of livelihood is low return activities in the agriculture. This policy strategy has not proved to be a significant tool, particularly when looking at the trend in the number of people ameliorated out of poverty as a result of this approach. The issue here is that a policy of agricultural production should be accompanied by the non-agricultural sector development in rural areas. The complementarity of the two approaches comes out of production linkages where agricultural output will need markets to sell and the market would have provided some of the inputs. The growth of rural communities can have considerable implications for the speed of the rural-urban migration and the growth of urban areas.

As a target, rural poverty reduction policy should not only aim at food production and security, but should also aim at increasing assets and income. This is not currently observed. As Mwabu and Thorbecke (2001) noted, in most African economies, diversification is a strategy for coping with poverty rather than a mechanism for escaping from it. There are a number of reasons to explain the lack of growth in rural communities.

World Bank reports (2000; 2001 as quoted in Mwabu and Thorbecke) list the following factors as responsible for rural underdevelopment:

Low agricultural productivity;

Environmental degradation;

Unsustainable population growth;

Poor rural infrastructure;

Lack of access to markets and market information;

Low levels of investment in people;

Ethnic and tribal conflicts;

HIV/AIDS pandemic;

Inappropriate economic policies;

Adverse effects of globalisation; and

High disease burdens.

The task of designing of an appropriately targeted programme has certain challenges. First, there has to be a survey that clearly assesses household economic situations in different districts and recording differences in various regions of the district. The main challenge here is the budgetary cost for undertaking a study of this magnitude. The information would help in designing benchmarks in which least developed areas will be targeted to be raised to the second best area in terms of development.

Second, there is a lot of subjectivity in the selection of an area to start with; therefore political considerations are of paramount importance to make the process credible.

The last challenge is the dynamism of policy design, as different areas may require different approaches to achieve the same results of rural growth and generation of income. And there is also a need to re-evaluate different sectors of the economy in order to understand their individual capacity and performance. This is important as it will help to know which sectors have growth potential and which of those are the major contributors to growth and have a direct link to poverty reduction.

It is therefore concluded that the retributive policies would be more suited to addressing poverty. The current approach of macroeconomic policies is limited in how growth actually trickles down to the poor. The challenge of designing distributive strategies first requires knowing the degree of inequality in the economy. This is still an unanswered question and an area for further research.

* Centre for African Renaissance Studies , University of South Africa