I. Preamble
1. The expert review workshop on economic growth and inequality in Southern Africa, was organized by the Subregional Office for Southern Africa and the United Nations Development Programme (UNDP) in Zambia and held in Livingstone, Zambia, on 19 and 20 June 2014.
2. The official opening address of Mr. Felix Nkulukusa, Permanent Secretary, Ministry of Fi-nance, Zambia, was delivered on his behalf by Mr. David Zulu, Chief Economist, Ministry of Finance, Zambia, following opening remarks by Mr. Said Adejumobi, Director of the Subregional Office for Southern Africa and Mr. Anders Pedersen, the United Nations Resident Coordinator for Botswana, who spoke on behalf of Ms. Janet Rogers, United Nations Resident Coordinator for Zambia. Experts, policymakers, civil society actors and members of the private sector from the fol-lowing African countries attended the workshop: Angola, Botswana, Malawi, Mauritius, Namibia, South Africa, Swaziland, the United Republic of Tanzania, Zambia and Zimbabwe. Regional or-ganizations represented at the meeting included the Common Market for Eastern and Southern Africa, the Southern African Development Community, the United Nations Country Teams from Southern Africa, the African Development Bank, the Economic Commission for Africa and the African Business Group.
II. Programme of work
3. The experts elected Mr. Tobias Mulimbika, Director of Industry in the Ministry of Com-merce, Trade and Industry, as the Chair of the workshop, and Ms. Elda Chirwa from UNDP-Zambia as rapporteur.
4. The expert review workshop adopted the following agenda:
a) Formal opening of the expert review workshop;
b) Election of the Chair and rapporteur, and adoption of the agenda and programme of work;
c) Presentation and discussion of the background document entitled “Economic growth, in-equality and poverty in Southern Africa: issues and policy options”;
d) Deliberations by expert discussants on the theme of the workshop;
e) General discussions of the background document;
f) Panel discussions on the theme of the workshop;
g) Presentations and discussions on regional and country experiences;
h) Launch of the African Social Development Index;
i) Breakaway sessions to engage in in-depth discussions and generate action plans;
j) Preparation and adoption of the outcome statement;
k) Closure of the meeting.
III. Account of proceedings
5. The experts thanked the organizers and the host country, Zambia, for providing a platform to discuss the important topic of growing inequality. They stated that the good track record of rapid economic growth over the past decade had given cold comfort to the millions left behind. Upon reviewing the background document entitled “Economic growth, inequality and poverty in South-ern Africa: issues and policy options”, they concurred broadly with the causes and consequences of income inequality in Southern Africa as outlined in the document and praised the document for being well researched and providing recommendations that were well grounded and based on clearly identified challenges that member States were facing in closing the income gap.
6. The workshop took place both in plenary and breakaway sessions. The latter sought to reflect more deeply on the following areas: the historical and contemporary basis for inequality in Southern Africa; policy options for closing the income inequality gap; and the role of Govern-ments, the private sector, civil society and development partners in bridging the inequality gap.
7. During the workshop, the Economic Commission for Africa launched the African Social Development Index.
IV. Observations
8. During the discussions, the experts made the following observations:
a) The problem of poverty and inequality had historical and contemporary dimensions in Southern Africa. The legacy of colonialism and apartheid and the structural adjustment policies of the 1980s and 1990s had exacerbated poverty and inequality in Southern Africa.
Also, current policy failures and poor governance had deepened the problem of inequality in the subregion;
b) Inequality assumed spatial (rural-urban and region), racial, ethnic, class, gender and age (es-pecially youth) dimensions in Southern African countries, although in varying proportions;
c) (c) Inequality, poverty and unemployment/underemployment were triple challenges fac-ing most Southern African countries. Those challenges were organically interlinked and required a holistic approach that promoted human security in the subregion;
d) Ownership of land and assets remained disproportionately skewed between a tiny minority and the majority, mostly along racial and gender lines, with implications for poverty and inequality;
e) (e) Many Southern African countries were resource rich, but had not leveraged their natural resources to promote job creation, economic diversification and inclusive growth necessary for reducing inequality and poverty;
f) Economic growth did not necessarily exacerbate poverty and inequality, hence there was a need for a growth strategy that was inclusive, participatory and empowering;
g) Social safety nets that were needed during the height of the economic crisis had limited ef-fect in reducing extreme poverty, and their withdrawal without sustainable alternatives had widened the income gap;
h) Current national and regional social and economic policies had the potential to tackle lo-cation, gender, race and age-based inequality, if well targeted. It was possible that home-grown policies would enhance understanding of the problem of inequality in Southern Af-rica. Measures to diversify economies had been hampered by skills and resource constraints, had encountered policy inconsistencies and had been adversely affected by external factors;
accordingly economies in the subregion remained confined to a few labour-saving sectors;
i) The roll-out of infrastructure in Southern Africa tended to be concentrated in urban areas, with hook-ups to rural areas being limited; as a result, rural farmers had encountered dif-ficulties in accessing markets for their produce;
j) A focused, strategic and inclusive national development plan had the potential to help lessen inequality and boost human resources and countries’ economic prospects. There was a need to explore good practices from the region on the problem of poverty and inequality;
k) Regional integration provided an opportunity for increased production, expanded markets, sustained economic growth, job creation and reducing poverty and inequality;
l) Support of development partners who were keen to enhance market access and support value addition and natural resource beneficiation would be critical to creating inclusive growth, raising living standards and closing income gaps;
m) There was a need for Southern African countries and the continent in general to develop home-grown indicators for measuring inequality, especially in the light of the apparent inadequacies of certain existing indicators; the Social Development Index, which had been developed to measure human exclusion could, therefore, prove a very useful tool.
V. Recommendations
9. The experts recommended actions for improving the background document and for mem-ber States in the following areas:
A. On addressing the injustices of the colonial and apartheid past, countries of Southern Africa should:
a) Deal with the legacy of the past in a systematic manner, supported by social and economic policies that raise human and productive capacity levels, encourage entrepreneurship and empowerment, and promote domestic and international investments;
b) Tackle racial, ethnic, gender, age and geographical-based inequality through active and sys-tematic inclusiveness in policymaking and implementation, equity in resource distribution, and a merit system that factors in past discrimination.
B. On making economic growth more inclusive and sustainable, countries of Southern Africa should:
a) Structurally transform their economies through economic diversification and inclusive growth in agribusiness natural resources and other economic sectors, as this transformation will be important in eradicating poverty and inequality in Southern Africa;
b) Recalibrate the structure of economies through public and private investments in value ad-dition activities that will support labour-intensive sectors, including tourism, agribusiness and manufacturing. In this regard, more efforts should be expended to implement regional protocols and national policies, such as the Comprehensive Africa Agriculture Develop-ment Programme, in so far as investDevelop-ment in agriculture is concerned;
c) Notwithstanding the actual and potential backlash from external forces, ensure that min-eral resource beneficiation gains traction. To realize this, there is a need for human skill upgrading, formulation and implementation of requisite regulations, and strengthening of institutions to create the right conditions for the local processing of raw mineral resources and other natural resources;
d) Work collectively, in partnership with trade unions, the private sector and civil society, to promote the interests of the country as a whole in terms of job creation, citizen empower-ment, closing of the inequality gap and poverty reduction. Accordingly, protection of those employed should be balanced against the need to create more job opportunities for the unemployed, especially young people;
e) Include citizens in remote areas in development efforts, by, for example, ensuring that the rolling out of social and economic infrastructure reaches rural areas;
f) Ensure that non-governmental organizations reach out to all parts of each country to take into account the needs of those at the lowest rung of the economic ladder and ensure that their voices are heard when social and economic policies are formulated and national re-sources distributed.
C. On recalibrating social and economic policies, Governments of Southern Africa should:
a) Encourage academia and indigenous think tanks to generate regionally and nationally rel-evant research to feed into policymaking. In that regard, the education system should be tailored to address the needs of local industry and ensure that it supports the long-term integration agenda of the subregion. There should be continuous exchange and interaction between academia and the policy community in Southern African countries;
b) Put in place well-targeted policies and programmes that have a direct impact on reducing inequalities;
c) Introduce and entrench stable macroeconomic frameworks, a sound trade policy and an ap-propriate investment climate that will help fuel the industrialization needed for sustainable and inclusive growth;
d) When formulating industrial and trade policy, give high priority to indigenous national and small scale enterprises through, for example, instruments of fiscal policy such as tax regimes and access to finance;
e) Eschew policies that are designed to appear good from an external observer’s viewpoint, but that have no relevance to local developmental conditions.
D. On addressing gender, race, age and geographically based inequality, countries should:
a) Design and implement a policy mix that combines targeted transfers with the provision of quality education, affordable and quality basic social services and infrastructure. Countries should note, however, that social protection measures are not a long-term solution towards reducing poverty and inequality;
b) Comply with regional and national laws and protocols on gender equality to ensure that gender-based inequality is dealt with in a systematic and sustainable manner;
c) Tailor financial and credit packages to effectively support the empowerment of women, young people and other disadvantaged social groups;
d) Focus on “one country, one region” and therefore refrain from adopting a narrowly focused development approach at the expense of other parts of the country or subregion;
e) Deal systematically with race-based inequality from colonial times and apartheid, including through land redistribution, while at the same time ensuring that State support for food security and skills retention is in place.
E. On improving the background document, the Subregional Office for Southern Africa and the United Nations Development Programme in Zambia should:
a) Make recommendations that are precise and brief and place them upfront;
b) Rather than focus on a country-by-country situation, conduct a comparative analysis of inequality; this will make the publication more user-friendly;
c) In addition to the main study, produce a policy brief and wall charts with the aim of attract-ing interest and effectively engagattract-ing policymakers;
d) As there are some notable good practices in the region, such as the case of Mauritius, high-light these practices in the report;
e) Africa-based indicators for measuring inequality, such as the African Social Development Index, which measures human exclusion, a euphemism for inequality, can be used by the study. Experts have welcomed this tool for its usefulness in exploring the use of Africa-based indicators in measuring inequality.
F. The way forward
10. The experts underscored:
a) The need to finalize the background document to enable the rapid implementation of its recommendations, as amended by the experts;
b) The need to present the recommendations of the workshop and the final background docu-ments to policymakers in Southern African countries;
c) The critical importance of the follow-up policy dialogue, which will facilitate the discussion of inequality at the highest level of policymaking within national Governments, the African Union, the Common Market for Eastern and Southern Africa and the Southern African Development Community.