Expert Review Workshop on Economic Growth and Inequality in Southern Africa:
Issues and Policy Options
19 – 20 June 2014
Livingstone, Zambia
Expert Review Workshop on Economic Growth and Inequality in Southern Africa:
Issues and Policy Options
Distr. : Limited
ECA-SA/AEGM.EGI-SA/2014/ 3 July 2014
19 – 20 June 2014
Livingstone, Zambia
Table of Contents
I. Introduction 1
II. Attendance 2
III. Proceedings 2
A. Session 1 2
B. Session 2 4
C. Session 3 10
D. Sessions 4 and 5 13
Annex 1 20
I. Preamble 20
II. Programme of work 20
III. Account of proceedings 21
IV. Observations 21
V. Recommendations 23
Annex II 26
List of participants 26
I. Introduction
1. Southern Africa is slowly becoming the epicentre of economic activity in Africa, as its estimated combined GDP of more than $700 billion far exceeds that of the other subregions in Africa.
Despite the global economic crisis, the subregion expanded by 4.6 per cent in 2012, compared with 5.3 per cent in the previous year. Some estimates put growth in 2013 at 2.4 per cent.
However, this impressive economic performance has been accompanied by high and growing income inequality, as reflected in the large Gini coefficient indices in most countries of the subregion. Some examples of this are the following: Angola 0.59; Botswana 0.61; Lesotho 0.53; Namibia 0.64; South Africa 0.63; Swaziland 0.52; Zambia 0.55 and Zimbabwe 0.50.
These figures suggest that the higher the country’s income, including per capita income, the higher the level of inequality, as specifically shown in Botswana, Namibia and South Africa.
Why is this occurring and what are the social and economic implications?
2. One theoretical explanation for this is based on the argument that income inequality is a necessary condition for growth, at least in emerging economies. The famous Kuznets curve suggests that in developing countries, economic growth in the initial stages sharply increases the income disparity between rich and poor people and that in the later stages of development the benefits of productivity become more widely shared. This “trickle-down” approach, however, has failed spectacularly in most high and middle-income countries, including the United States of America.
3. Current consensus is increasingly converging on the understanding that high levels of inequality are detrimental to balanced and sustainable growth. However, empirical support remains difficult to tease out even if social instability reflecting such inequality is intensifying, as demonstrated in such events as the Arab Spring, Occupy Wall Street and the widespread service delivery protests in South Africa. There are many possible explanations for this. Joseph Stiglitz, in his 2012 book The Price of Inequality: How Today’s Divided Society Endangers Our Future, argues that high inequality leads to under-investments in education. Furthermore, inequality of income leads to inequality of education. Children from lower-income families end up in lower-quality schools and receive a lower quality education. This results in a workforce that is less productive than one that is in a country that has a more equitable economy. It also perpetuates the intergenerational transmission of poverty.
4. Another theory argues that high inequality leads to policies that undermine growth. As income inequality grows, more and more resources are concentrated in the hands of the wealthiest who, in turn, ensure that the policies implemented are those aimed at protecting the status quo. This further worsens inequality.
5. A third theory is that high inequality leads to lower levels of consumer spending and savings.
The poor are caught in a poverty trap owing to their low disposable incomes and low levels of savings. The social consequences of inequality can be dire. It can create social tension and evoke the possibility of social implosion for countries. Given the above, tackling inequality is imperative for countries in Southern Africa.
6. Against this background, the Subregional Office for Southern Africa of the Economic Commission for Africa (ECA) and the United Nations Development Programme (UNDP) in Zambia organized an expert review workshop entitled “Economic growth and inequality in Southern Africa: issues and policy options”. The workshop examined the relationship between economic growth and inequality in Southern Africa, the consequences for countries in the subregion of the disconnect between relatively high economic growth and rising income inequality, and policy options that may remedy this debilitating situation.
II. Attendance
7. Participants in the workshop included government officials, civil society actors and members of the private sector from the following countries: Angola; Botswana; Malawi; Mauritius;
Namibia; South Africa; Swaziland; the United Republic of Tanzania; Zambia; and Zimbabwe.
Regional organizations represented at the workshop were the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC), the United Nations Country Teams from Southern Africa, the African Development Bank (AfDB), ECA and the African Business Group. The full list of experts is attached as annex II.
III. Proceedings
A. Session 1
1. Agenda item 1: Formal opening of the workshop Opening speeches
8. In his introductory remarks, Mr. Said Adejumobi, Director of the Subregional Office for Southern Africa, thanked the experts for attending the workshop to discuss one of the most contemporary challenges of development: economic growth and inequality. While the problem was global, it was particularly acute in Southern Africa, where 7 countries were among the top 10 most unequal countries in Africa. He noted that the most rapidly growing countries in Africa, namely Angola, the Democratic Republic of the Congo, Mozambique and Zambia, had also experienced growing levels of poverty, inequality and unemployment/
underemployment, indicating that the “trickle-down effect” predicted by liberal economic theory was failing to materialize. Quoting from a recent Open Society Initiative of Southern Africa study, he said that 60 per cent of the population in SADC countries lacked access to an adequate supply of safe water, a third lived in abject poverty and about 40 per cent of the labour force was unemployed or underemployed. This problem, he argued, constituted an economic, social and political liability, which might implode and lead to a reversal of the few development gains that had been achieved.
9. He challenged the experts to deal with the roots of the problem and generate practical recommendations. Such recommendations should take into account the historical context of the subregion, the structure of the economies and the interface between economic growth and inequality, as well as current State interventions and their impact. If properly implemented, such recommendations would lead to diversified economies and the creation of a solid industrial base. Moreover, Africa and the subregion must foster economic growth that was participatory, empowering and met the basic needs of the most vulnerable members of society.
In conclusion, he assured the experts that ECA and UNDP in Zambia would sustain their commitment to deal with economic growth and inequality and other developmental challenges of the subregion. He called upon regional bodies to redouble their efforts in tackling that potentially explosive problem.
10. In his opening remarks, Mr. Anders Pedersen, United Nations Resident Coordinator for Botswana, observed that the draft report to be reviewed by the experts was well written, stating that it was one of the best reports on economic growth and inequality that he had read recently. He urged that once reviewed, the report should be disseminated widely for use by policymakers in the subregion. He said that there was sufficient consensus that reducing
poverty was not only about promoting growth but also about ensuring that such growth was shared. He reiterated an earlier observation that Southern Africa was one of the most unequal subregions in the world, and that inequality was simultaneously happening against the backdrop of decades of sustained growth in the subregion.
11. He noted that although poverty levels had come down in a few middle-income countries of the subregion, such as Botswana and Mauritius, poverty and extreme poverty remained very high. He asserted that as those middle-income countries possessed the means to eradicate extreme poverty, the authorities needed to marshal a strong political commitment if such poverty was to be eradicated. Finally, he outlined a number of areas that were critical to the discourse on economic growth and inequality, and should be reflected in the report. These were the following:
• Countries should focus not just on social safety nets for vulnerable groups in society, but also on gender equality and the empowerment of women, especially young women, who were economic drivers.
• There was a need to provide young people with incentives to attract them to key sectors of the economy that had potential for growth, including agriculture and tourism.
• The nexus between poverty, HIV/AIDS and gender equality should be at the core of devel- opment; the topical issues of the environment and climate change should not be ignored.
12. In the keynote address of Mr. Felix Nkulukusa, Permanent Secretary in the Ministry of Finance, Zambia, which was delivered by Mr. David Zulu, he thanked the Subregional Office for Southern Africa and UNDP in Zambia for bringing together high-calibre experts to deliberate on the economic growth-inequality challenge. He mentioned that the challenge was of deep concern to Zambian authorities, particularly as the country was striving to roll out policies and programmes to accelerate broad-based growth, diversify the economy and entrench social justice.
13. He explained that the growth-inequality mismatch was not only an issue of concern to Zambia, but affected all Southern African countries. The subregion was indeed slowly becoming the epicentre of economic activity in Africa. The challenge, however, was to ensure that as many citizens as possible benefited from that robust economic activity, thus promoting inclusive growth. He said that the issue of deepening inequality, amid rising prosperity for a few, was a growing concern for Governments. He underscored that while all national stakeholders must be involved, it was the primary duty of Governments to develop policies and programmes to close the gap between high economic growth and high and widening inequality.
14. Regarding the draft background document, he called upon the experts to focus on developing and/or enhancing strategies, policies and programmes that could effectively deal with the challenge of high inequality. He said that in their efforts to improve the overall quality of the background report through a thorough review, the experts should also proffer action-oriented recommendations to member States and other stakeholders on how high growth could help to narrow the inequality gap in the SADC region.
15. In officially opening the expert meeting, the Permanent Secretary expressed confidence that the objectives of the expert meeting would be met successfully, considering the high level of expertise assembled. He said that he looked forward to reading succinct recommendations and a well-considered road map that would guide member States in dealing with inequality.
2. Agenda item 2: Election of the Bureau and adoption of the agenda and programme of work
16. The workshop elected the following officers:
Chair: Mr. Tobias Mulimbika, Director of Industry in the Ministry of Commerce, Trade and Industry, Zambia
Rapporteur: Ms. Elda Chirwa, UNDP, Zambia 17. The workshop adopted the following agenda:
a) Opening of the meeting;
b) Organizational matters;
c) Objectives of the meeting;
d) Presentation of the report entitled “Economic growth, inequality and poverty in Southern Africa: issues and policy options” and the discussants’ deliberations;
e) General discussion on the background document;
f) Open dialogue on the theme;
g) Panel discussions on the theme;
h) Subregional and country experiences;
i) Breakaway sessions for in-depth discussions and action plans;
j) Group presentations and general discussions;
k) Conclusions and recommendations;
l) Closing of the workshop.
B. Session 2
1. Agenda item 3: Presentation of the report entitled “Economic growth, inequality and poverty in Southern Africa: issues and policy options”
18. The consultant, Ms. Jesimen Chipika, presented the background document entitled
“Economic growth, inequality and poverty in Southern Africa: issues and policy options”.
In the document, a wide range of topics were covered, including concepts and definitions, related economic theories, the historical and contemporary basis for growth, and inequality and poverty conditions in Southern Africa. During the presentation, the consequences of economic growth and greater inequality were covered at length, and policy options and recommendations to deal with the triple challenge of poverty, inequality and unemployment/
underemployment were provided.
19. In the document, it was acknowledged that the definitions of inequality differ, including those that are descriptive (“different people having different degrees of something”), those that are economic (“economic inequality as the fundamental disparity that permits one individual certain material choices, while denying another individual those very same choices”), those that stress access to opportunities (“inequalities in opportunities”, such as education and land) and those that stress inequality in economic outcomes (“income inequality”). In exploring various economic theories to help understand the conceptual issues underlying inequality, the document underscored that those theories were indeed useful but not sufficient to tackle the challenges of growth, inequality and poverty. Drawing on lessons from China and India, two countries that had formulated their own development models, the presenter argued that a school of thought on economic growth and development must emerge out of Southern Africa for its own development.
20. During the presentation, reference was made to data that suggested that the higher the country’s income level, the higher the level of income inequality. It was also noted in the document that Southern Africa was in the middle of a complex transition involving political, social, and economic and governance dimensions that needed to evolve into new political and economic dispensations in order to guarantee broad-based wealth creation, equality, sustained growth and development, and poverty reduction.
21. In the document, it was argued that the current patterns of economic, social and political development in Southern Africa were largely a continuation of the history and political economy that countries had inherited from the late nineteenth century colonial era. Historically, colonial rule in the subregion was implemented in various forms for many years, from the most pervasive white settler rule in South Africa, Zimbabwe and Namibia; to moderate colonial rule in the Democratic Republic of the Congo, the United Republic of Tanzania, Seychelles, Mauritius and Madagascar; to colonial occupation in Angola and Mozambique; and to a variety of colonial protectorates in Botswana, Lesotho, Malawi, Swaziland and Zambia.
22. As a result, the subregion had inherited a special type of social formation in which capitalism was grafted onto pre-capitalist forms of production in a distorted manner. This form of capitalism had created a formal enclave which was totally dependent on external factors, such as markets and capital from Europe. That dependency still exists, which has resulted in increasing poverty, inequality and unmet aspirations for prosperity.
23. Outlining possible policy options, it was argued in the document that policymakers did not have to choose between “pro-growth” and “pro-poor” policies; rather, a more equal distribution of income and assets would foster growth, whereas high inequality could retard it. The adoption of policies that were sound, broad-based, diversified, pro-growth, gender-sensitive, job-creating and pro-poor were called for in the subregion. Those policies could bring about economic structural transformation and create a conducive environment for the private sector to generate new wealth and jobs, particularly through support to local micro, small and medium enterprises. Such policies would support the following: the post-2015 development priorities of the SADC region; economic structural transformation to ensure broad-based and inclusive economic growth and development; poverty eradication; and efforts to combat the spread of HIV/AIDS and eventually eliminate it.
24. Some of the sectoral policy options and recommendations put forward during the presentation were:
• Comprehensive agrarian reform to ensure viable agricultural development and to support broader sustainable human development
• For the mining sector, set strategies aimed at managing the loss of low-skilled employment and ending the practice of exporting raw materials
• For the manufacturing sector, dealing with the competitiveness components of the Global Competitive Index to prevent de-industrialization
25. For other areas, Mr. Chipika suggested that countries should avoid the “race to the bottom”.
Leaders should, therefore, work with the broader labour movement to achieve development objectives. On education, there was a need for a curriculum transformation to deal with the mismatch between the skills and the needs of industry. For countries emerging from conflict, improved governance was needed. This would serve as the basis for economic recovery, including through small-scale private economic activities to encourage inclusive growth.
2. Panel discussion on the background document
26. The panellists comprised Mr. Sibusiso Vil-Nkomo, Research Professor, University of Pretoria, and Chair of the Mapungubwe Institute for Strategic Reflection, South Africa; Mr. Dan Kuwali, Associate Professor of Law and Development, Centre for Security Studies, Mzuzu University, Malawi; Ms. Josine Uwilingiye, Department of Economics, University of Johannesburg and Mr. Buleti Nsemukila, Lecturer, University of Zambia.
27. Mr. Vil-Nkomo stated that he was impressed by the document and welcomed its multidisciplinary approach, which would facilitate long-term analysis, further studies and planning. The triple challenge of poverty, inequality and unemployment was well covered by the paper. Unemployment had proven to be a key challenge in all countries, including South Africa. He also commended the coverage of theories and concurred with the paper’s finding that those theories were useful but would not be sufficient in tackling the challenges of growth, inequality and poverty. He challenged Southern Africa to come up with a region- specific school of thought on economic growth and development, arguing that there was a need for the subregion to devise its own approach for meeting the challenges of and benefiting from globalization.
28. He stated that the paper needed to take into account public services by articulating the role civil society should play in development. Failure to do so could prove to be destructive to an economy from a political, as well as a social, perspective. As examples, he discussed lessons from Greece, Italy and Spain. The paper should highlight unemployment rather than consider it merely in relation to economic growth and inequality. In that regard, deliberate employment policy objectives were a prerequisite for reducing inequality. The authors should also study the work of the African Centre for Economic Transformation, particularly its research report entitled “Growth with depth”. In that report, the Centre had suggested that it was necessary to look beyond policy alternatives and apply a well-thought-out approach to track economic transformation by establishing an African transformation index. Furthermore, it argued that the premise of the first African Transformation Report was that the recent economic growth, while welcome, would not by itself sustain development on the continent. To ensure that growth was sustainable and continued to improve the lives of many, countries needed to promote economic transformation vigorously. Growth so far had resulted from macroeconomic reforms, better business environments and higher commodity prices. Economic transformation required much more than that.
29. Sharing experiences from South Africa, he said that the country had acknowledged its triple challenges (inequality, poverty and unemployment) and that the national debate to tackle those challenges was becoming more lively. An emerging issue was urban and regional political economy policy: it was projected that by 2020 most South Africans would be living
in urban areas. South Africa, therefore, had no choice but to generate progressive urban policy strategies that would deal with the issues related to inequality, poverty and unemployment.
Consequently, South Africa must have in place effective agricultural and rural development policies that would encourage slower urban migration while supporting productivity for food security, employment and poverty reduction. Asset distribution was another development challenge in South Africa. That challenge was receiving keen policy consideration. The country had experimented with income maintenance and distribution policies and was starting to realize the shortcomings of that approach, which had proved to be unsustainable and did not contribute to the long-term goal of economic independence. He argued that a market-driven approach would remain in place, with the State also playing a developmental role. Efforts were therefore needed to promote the emergence of a democratic developmental State. Finally, human capital investment remained critical. Curriculum restructuring to advance growth and development in Southern Africa was urgently needed. He also noted that a distinction had been made in South Africa between democratic protests and civil unrest.
30. In conclusion, Mr. Vil-Nkomo argued that it was important for the research to focus on the competitive or comparative advantages that each country in Southern Africa enjoyed in growing and developing its economy. The domestic model for each country must tackle growth, inequality and poverty. The positive spillover effects from that approach would enhance the subregion’s growth, development, political stability and global competitiveness.
31. Mr. Kuwali welcomed the rich content of the paper, stating that its narrative on equity was what the subregion currently needed. However, he pointed out that in addition to income inequality, the paper needed to deal with the issue of access to services. Moreover, he encouraged the authors to make use of best practices from Southern Africa and indicated that examples from Botswana and Zambia could be cited. In that regard, the factors that had deepened inequalities should be explained in detail. Those factors included low levels of education and skills, access to services, gender inequalities, the impact of HIV/AIDS, disability and ill health. He argued that countries needed to combat the illusion that economic growth automatically resulted in development. Indeed, in many cases, growth had been accompanied by environmental problems and traffic jams, or had been generated by military spending – all of which undermined people’s health and overall quality of life. He questioned whether the poverty line was a good measure of inequality, arguing that the measurement of inequality using the Gini coefficient did not explain many other types of inequality. That implied that there was a need to adopt a holistic approach to developmental issues, including with regard to governance issues.
32. In conclusion, Mr. Kuwali said that there was a need to examine the following issues: (a) the impact of job creation on rural dwellers; (b) the impact of HIV/AIDS on economic growth;
(c) the fact that women were sidelined in policymaking even though they constituted the majority of the population; (d) the fact that young people were not attracted to agriculture – how could African economies attract them to innovative programmes in agriculture?; (e) access to justice, especially for the poor, including those in prisons; (f) mismanagement of resources and the need to regulate multinational corporations to ensure that they paid equitable taxes;
(g) empowerment of women and child victims of violence and formulating policies that deal with the needs of marginalized groups; (h) combating corruption; and (i) investing in young people.
33. Ms. Josine Uwilingiye also praised the authors for a well-researched paper. In offering suggestions for improvement, she urged the authors to deal with the question of how the global competitive pillars were linked to inequality and growth; for example, they should consider the case of the United Republic of Tanzania. By doing that, the paper would not be too focused on the Global Competitive Index. Historical data should also be analysed in order to give a comprehensive picture.
34. Finally, Ms. Uwilingiye suggested that recommendations should be tailor-made to country specificities. Indeed, she argued that individual countries had different characteristics, but the policy recommendations suggested by the document appeared to be too general. Furthermore, the policy recommendations were focused on measures to enhance growth and not on closing the inequality gap. More evidence was needed to substantiate the suggested policy recommendations.
35. Mr. Nsemukila argued that the phrase from the presentation, “Economic policy is necessarily contextual”, was critical to the workshop’s discussions. He stated that it was clear from the document that further efforts must be made, especially with regard to the structural transformation of economies. He further underscored that African think tanks should work to ensure that an economic transformation took place. Currently, he said, those think tanks were unfortunately discussing the same things, often at a macro-level, and were ignoring micro social and economic issues. He raised a number of questions related to the role of think tanks in generating the subregion’s own developmental paradigm. Some of those questions were: (a) what had African think tanks not yet discussed?; (b) were they agents of pervasive dualism?;
(c) were they the comprador bourgeois that had assisted in perpetuating inequality in Africa?;
and (e) what had they done to influence structural transformation?
36. Citing Zambia as an example, Mr. Nsemukila argued that for more than a decade, the country’s economic growth had been about 7 per cent, yet poverty had remained at approximately 60 per cent, which was worse than the average of about 30 per cent for the SADC region. Stunting in Zambia was estimated at 45 per cent and malnutrition was rife, demonstrating the extent of inequality. Strangely, however, the indicators on global competitiveness were very positive for Zambia, except for indicators on human development. In terms of employment, 66.7 per cent of employed Zambians worked in agriculture, 10.3 per cent in trade, 3 per cent in manufacturing, 1.8 per cent in construction and 1.4 per cent in mining. Therefore, if Zambia was to succeed in creating jobs, there was more potential in agriculture than in mining and construction.
37. In conclusion, Mr. Nsemukila argued that with regard to policymaking, Southern Africa tended to concentrate on macro issues while the emphasis should be on micro issues, thereby promoting “community participation and engagement”. He said that there were tools, such as the micro-level estimation, that used censuses and surveys to measure inequality and poverty at a grass-roots community level. Accountability might be more appropriate at the ward level and might assist advocacy discussions, especially on economic growth, poverty and inequality.
For example, within Ndola, the lowest poverty rate was in Yengwe Ward (14 per cent) and the highest in Kawama Ward (78 per cent), underscoring the high levels of intra-district inequality.
3. Agenda item 4: General discussion on the background document
38. During the general discussion on the background document, the experts commended the authors for their thorough research, which would go a long way in helping stakeholders to tackle the poverty-inequality-growth combination. In particular, they reiterated the discussants’
views in welcoming its multidisciplinary approach, stating that it was comprehensive, bold and frank, and did not place too much emphasis on economic issues. They also welcomed the use of graphs, which they said were well done and clarified messages in the report.
39. To improve the paper, the experts cautioned that the authors should not dismiss agriculture as being less important than other sectors in terms of spurring development. Instead, agriculture should be a catalyst to promote development in other sectors, such as manufacturing and services. Some experts called for the analysis to be based on a differentiated nature of inequality,
underscoring the importance of gender, geography, health, governance, asset distribution and the fragility of States as critical to understanding and dealing with inequality. Echoing earlier comments, the experts called for use of good local case studies and a discussion on the role of institutions in tackling inequality. Moreover, some experts suggested that the number of recommendations should be limited to only a few key ones and that the data should be disaggregated by country groups, according to their commonalities. The experts suggested that policy recommendations should take into account the fact that the countries in Southern Africa were at different levels of development. For instance, countries could be grouped into low-income, middle-income and upper-middle-income and recommendations formulated accordingly. Small island economies could be grouped together and tailor-made recommendations proposed to deal with their specific challenges, while a different set of recommendations could be made for middle-income countries. Some experts were of the view that rather than conducting country-by-country analysis, a more comparative analytical approach would have been more effective and resulted in a shorter paper.
40. Notwithstanding the above-mentioned suggestions, the experts stressed that not all of the comments could be incorporated into the report. Some workshop suggestions could inform future policy research on whether some best practices in inequality programmes could be replicated elsewhere, and on the potential role of regional institutions.
41. The experts argued that when discussing broader issues, poverty needed to be analysed at the lowest level of society. The report needed to examine how assets, including land, were distributed, as that was vital in tackling inequality. The experts also reiterated the point made earlier that Governments needed to undertake poverty analyses not just at the macro level, but also at the meso and micro levels. That could be done, for example, by using available census data, which would enable the researchers to formulate more targeted policy recommendations and interventions. Analysis could look at multiple facets of deprivation, such as access to social services. There was also a need to address the limited trade within African States. The experts bemoaned the over-dependence of Africans on international organizations for the implementation of development programmes, even among those that were locally generated.
They therefore called for collective action and an African framework.
42. Some experts raised questions pertaining to the following: the factors that had spurred growth in China; to what extent a national development plan could drive growth; whose mandate it was to reduce poverty and inequality; and the actors involved in economic development. Other experts agreed that all stakeholders had a role to play in a country’s development process. The private sector could play an important role in reducing poverty and inequality, as in Mauritius and Seychelles.
43. Experts noted that the role of a democratic developmental State was necessary for reducing inequality, as markets alone could not achieve that goal. Such a democratic developmental State should create an enabling environment and invest in key strategic sectors, which should also be open for investment by the private sector. However, the experts argued that sustainable development could not be achieved through foreign direct investments alone; national entrepreneurship must also be nurtured. Since more African countries were attaining middle- income status, additional strategies on applying domestic resource mobilization to implement poverty and inequality reduction policies and programmes were needed. The experts mentioned the important role that a modernized agricultural sector could play in addressing inequality.
They also called for concerted efforts to ensure citizen participation in key sectors of the economy, such as mining.
44. Some experts commented that the report needed to flesh out the role that regional institutions, such as COMESA and SADC, could play in dealing with the issues of growth and inequality.
They also pointed to the need to reduce the number of recommendations in the report and to
C. Session 3
1. Agenda item 5: Panel discussions on the theme of the workshop
45. During the session, the facilitator, Ms. Faith Kandaba, from the Zambia National Broad- casting Corporation, posed questions to four respondents representing government, civil society organizations, academia, the financial and banking sector, and international donors and develop- ment partners.
46. Responding to questions on the roles, actions, policies and programmes of Governments in reducing inequality, the representative of the Ministry of Finance of Zambia, Mr. David Zulu, indicated that it was imperative that development priorities were home grown, with a clear identi- fication of critical problem areas. He mentioned that the development of road infrastructure in his country would help to alleviate the challenges faced in linking up the country, noting, for example, that work had begun on roads in rural areas, which would make it easier for rural farmers to bring their produce to markets. He also stated that for government programmes and policies to be ef- fective and to achieve maximum impact, it was necessary to focus on targeted social sector spend- ing which would directly improve the lives of disadvantaged beneficiaries. On the role of regional integration in dealing with inequalities, he indicated that it was necessary to put in place common systems that worked better with large numbers or groupings. There was also a critical role for re- gional economic communities to harmonize processes and reduce barriers for regional political, social and economic cooperation.
47. Citing copper mining as an example, Mr. Zulu stated that the industry was capital-intensive and export-orientated and, as a result, had little or no downstream linkage to the local economy.
However, he said that the Government of Zambia was focusing on diversifying its agriculture sec- tor to encourage varied crop plantation and support value addition to agricultural products. It was also striving to achieve double digit and sustained growth, which would serve as a springboard for reducing inequality.
48. On the role of financial institutions in reducing inequalities, the official from the Bank of Zambia, Ms. Brenda Mwanza, acknowledged that the big players in the banking sector had a bias towards investing in urban areas where businesses were well established and the potential to make profits was greater. Microfinance institutions were being encouraged to operate in rural areas and banks were also being encouraged to structure financial products for young people, women and special skill groups, and educate them on loan management. She conceded that challenges existed in appraising projects with a view to approving beneficiaries for funding. The Government, how- ever, was rolling out a financial education programme to tackle that capacity challenge.
49. Speaking on behalf of the civil society organizations, Mr. Geoffrey Chongo of the Jesuit Centre for Theological Reflection acknowledged that civil society organizations had tended to operate in urban areas owing to the nature of their work and proximity to key decision makers. He indicated, however, that some civil society organizations were implementing and monitoring proj- ects in rural areas. He also stressed that women and local entrepreneurs needed to be empowered in order to alleviate poverty.
50. Representing the members of academia, Mr. Buleti Nsemukila emphasized that, when de- signing academic programmes, Governments must put in place mechanisms and structures to inte- grate output from academia that was relevant to the industry and development needs of countries.
51. Reviewing the role of international donors in development and how they could support countries in their efforts to tackle inequalities, the United Nations Resident Coordinator for Bo- tswana, Mr. Anders Pedersen, underscored the need for closer working ties between the United Nations and the general population in order to enhance understanding of issues affecting the latter.
He stressed that the United Nations would continue to work with member States and key stake- holders in providing advice and finance, and in facilitating the building of networks to enhance development efforts in a gender-balanced manner. This would effectively deal with inequalities and make a difference in people’s lives. He also indicated the need for home-grown interventions with a clear understanding of problems at the grass-roots level to ensure the success of inequality- reducing programmes and activities.
52. Mr. Freddie Kwesiga of AfDB indicated that a careful study of inequality and how it af- fected various groups in society, such as women and young people, should be undertaken in order to design appropriate interventions to tackle those inequalities. Issues of concern included land ownership and related matters. He also stated that financial institutions could play a critical role by providing credit to the agricultural sector and women’s groups to deal with inequalities and poverty and promote women’s empowerment.
2. Agenda item 6: Regional and country experiences
45. During the session, country experiences on economic growth, inequality and poverty were presented by Mr. Amedee Darga on Mauritius, Mr. Babatunde Omilola on South Africa, Mr.
Francisco Songane on Angola and Mr. Victor Mbumwae on Zambia.
46. Mr. Darga gave a presentation on the Mauritian experience, which was entitled “Mauritius:
experience of growth with inclusiveness”. He said that the central objective of the country’s economic policies and strategies had been job creation. The Mauritian economy had evolved from being dependent on sugar in the 1970s to one that was relatively well balanced with manufacturing accounting for 19 per cent of GDP, followed by financial services and intermediation at 13.5 per cent. Trade policy was formulated with the goal of creating jobs, and government support was applied to the tourist sector with the aim of encouraging repeat tourist visits. Furthermore, the Government offered fiscal incentives to spur investments in housing and education, create wealth in certain sectors, and incentivize consumption from which revenue could be captured. As those interventions were not directed exclusively to one sector, they helped generate jobs that were relatively insulated from sector-specific shocks.
47. In a presentation entitled “The dynamics and drivers of social and economic inequalities in South Africa,” Mr. Omilola informed the experts about a study that identified sources and drivers of economic inequalities, such as income distribution and social inequalities, including access to good education, health and land use, and outlined strategic policy interventions to reduce inequalities. Due to its apartheid past, inequality in South Africa was largely racially based. However, geographical inequality was also well entrenched, with some provinces, particularly those with a high concentration of so-called “homelands”, doing far worse than others. To reduce inequality, the Government had invested heavily in education, including in boosting the requisite skills to facilitate the transfer of land ownership for agricultural production. Health services and economic infrastructure were receiving attention in all provinces, with the latter being carried out largely through relevant State-owned enterprises and through public-private partnerships. To further fight inequality, efforts were under way to promote good governance through a stable socioeconomic and political environment, a corrupt-free society, an effective civil service, a good regulatory environment and a transparent leadership structure.
48. Mr. Songane presented his country’s case study in a presentation entitled “Equity and inequalities in Angola”. He reminded the experts that the country was emerging from a protracted civil war and remained highly dependent on oil production. Inequality was deep in both gender and geographical terms. Under the motto “Grow more and redistribute better”, the Government intended to use the rapid economic growth resulting from oil production
an aim to improve primary and secondary school enrolment, and on health, to significantly reduce maternal and child mortality rates. With such high dependence on oil (70 per cent of GDP, 98 per cent of exports and 78 per cent of government income), the country was mindful of the need to diversify the economy using agriculture as a starting point.
49. The Zambian case study was presented by Mr. Mbumwae in a presentation entitled “A gender perspective from Zambia”. He stated that inequality was both gender and geographically based, with current policies worsening the condition of women in rural areas. For example, women comprised about 70 per cent of the agricultural work force, yet for every bag of fertilizer given to a woman under the country’s Fertilizer Support Programme, a man received two bags.
While the country’s economy was one of the fastest growing in the world, extreme poverty remained high, with 42 per cent of the country’s 13 million people living below the poverty line. Of those people, about 60 per cent of them resided in rural areas and depended on agriculture. There was a need for policies to tackle poverty by improving incomes, particularly agriculture incomes, promote human development through improved education and health, and improve access to growth enablers, such as roads and energy. Fundamentally, Zambia must focus on women’s empowerment and equality in order to be in a better position to eliminate inequalities related to income and human development. Unless policies such as gender budgeting were to take root in various sectors, the development cycle would remain the same, resulting in good macroeconomic indicators while inequalities in incomes, human development and growth continued to increase.
50. Subsequent to the presentations, the experts’ discussions and questions varied. In response to questions posed about Mauritius, the experts were informed that with a small economy and limited natural attractions, the country had focused on presenting a good tourist experience to ensure that high-value tourists would return. The authorities also worked to ensure the creation of high-quality jobs in various economic sectors. The country had worked to foster a culture of caring for children and the aged, with responsibilities for such care being shared by the State, families and employers. Ethnicity was an issue in Mauritius, and Government had taken action to reduce ethnic inequality, including through educational initiatives.
51. The workshop was also informed that South Africa welcomed the fact that Nigeria was now recognized as the largest economy in Africa, as it more accurately reflected economic realities and an improvement in statistical collection and processing. Nigeria had also risen in the rankings of the world’s leading economies. The new economic status had not only opened the country up to new opportunities to deepen intra-African trade, but had also sharpened the focus on the long-standing issue that the voice of Africa should be louder in international forums dealing with economic, social and political issues.
52. It was also explained that, even though gender inequality was critical in Zambia, there were other forms of inequality that needed to be dealt with, including low literacy levels, high rates of children dropping out of school, a heavy disease burden, low access to opportunities, increased dependence on hand-outs, poor choices and decisions in life, an inability to sustain livelihoods and an increase in gender-based violence.
D. Sessions 4 and 5
1. Agenda items 7 and 8: Group presentations and general discussions
During those sessions, the experts split into three groups in order to hold in-depth discussions on selected topics related to the main theme of the workshop. Those discussions were held under the following sub-themes:
• The historical and contemporary basis for inequality in Southern Africa, including the structure of economies and the social, political and economic consequences of inequality, and assessing current policy interventions to close inequality gaps
• Closing the income inequality gap: policy options
• Roles of different actors, including the Government, private sector, civil society and devel- opment partners, in bridging the inequality gap
a) Breakaway session 1: historical and contemporary basis for inequality in Southern Africa
53. What are the historical and contemporary dimensions of inequality in Southern Africa? What are the forces or dimensions of inequality today?
• Colonization and apartheid in South Africa is a historical problem.
• Administrative and policy failures by Governments and ongoing blame of colonization.
• Governments’ continued acceptance of stringent conditions attached to development aid.
Countries need to agree to terms and conditions that they know they can fulfill.
• Rampant corruption by public service employees.
• Continued voting by citizens for Governments that fail to deliver services, owing to fears that development will bypass their communities if they vote otherwise, namely a sense of political victimization.
• A culture of impunity and zero faith in democratic approaches and institutions.
• Resistance to democracy modernization by Southern African States.
• A widening economic gap between the “haves” (rich) and “have-nots” (poor).
• Revolutions and continued protests by populations, such as those taking place in South Africa, underscore the repercussions of persistent inequality.
• Low participation of citizens in decision-making, including in constitutional drafting com- mittees, referendums and elections. As a result, the views of the masses are poorly under- stood.
• Education systems that fail to meet international standards, which results in graduates who
54. What positive actions are Southern African countries taking to deal with racial inequality?
What should Southern African countries do to improve on those actions without losing skills needed by the agricultural, manufacturing, mining and tertiary sectors?
• Agrarian and land reforms for the indigenous populations, such as in South Africa and Zimbabwe.
• Financial sectors being used to empower local business, such as in Ethiopia.
• Localization of jobs, in which certain jobs can only be held by country nationals, such as in Zambia, where human resource positions must be held by Zambians.
• Increased investments in the tertiary sector to develop the skill sets needed in specific eco- nomic areas, such as mining and manufacturing.
• Empowerment programmes, such as the Black Economic Empowerment programme in South Africa.
• Investment in manufacturing industries to create employment opportunities for local popu- lations.
• Deliberate policies to combat corruption among public service employees and politicians.
55. In the light of current progressive regional and national laws on gender equality, shortcomings in their implementation should be highlighted and actions that countries must take to tackle those shortcomings outlined.
(i) Shortcomings
• Visible exclusion of country nationals from more lucrative jobs
• Unequal access to land, which has exacerbated gender inequality
• Poor education investments by Governments
• Few women in the political arena and in decision-making positions
• High poverty levels among women and young people
• Lack of access to information on political and economic issues, particularly in rural areas
(ii) Outcome actions
• Ensure that access to basic services, including health, education and sanitation, is available for all, regardless of gender
• Take concrete action to empower women and encourage them to take up decision-making positions
• Increase the number of women in parliament
• Raise public awareness of gender equality issues, including the need to ensure equal access to land
• Take action to narrow wealth disparities
• Create jobs for both men and women, which will, among other things, enhance competi- tiveness
• Implement government policies that provide for social safeguards and combat extreme pov- erty in rural areas
• Implement awareness-raising programmes with a view to changing entrenched cultural beliefs, including the belief that women should not be allowed to own land or occupy deci- sion-making positions
56. The experts concluded that social safety nets were not sustainable strategies for combating long-term poverty and reducing inequality. Specific exit strategies that nonetheless address those challenges need to be recommended.
• Social safety nets are viable if they are properly targeted.
• Social safety nets are usually fragmented during implementation.
• Creation of more jobs in both the informal and formal sectors constitutes an exit strategy.
• Phased graduation for people receiving support through social safety nets is needed; such programmes should have timelines.
• Work-based social safety nets are also recommended as opposed to complete exit strate- gies; the group felt that, in the light of the numerous developmental challenges in Southern Africa, it was premature to implement complete exit strategies.
b) Breakaway session 2: Policy options for closing the inequality gap
57. In the light of the progress that countries in Southern Africa have made through the adoption of programmes and policies aimed at closing the inequality gap, specific actionable and viable plans to accelerate the process in the following areas need to be highlighted:
(i) Social policies
• Governments should adopt measures establishing appropriate policy frameworks and insti- tutions to promote income-generating activities and opportunities.
• Fiscal management policies should be reviewed in order to ensure that resources are man- aged and targeted appropriately.
(ii) Specific actions on social policies
• Invest in social and economic infrastructure
• Create an environment that promotes private sector job creation
• Formulate specific programmes to address issues affecting the informal sector
• Roll out microfinance and financial education and/or business coaching programmes Political setup
• Mobilize the required political momentum Traditions and customs
• Raise awareness among traditional leaders of the negative impact of certain practices that put women at a disadvantage
• Eliminate the practice of female genital mutilation Economic policies and programmes
• Promote access to finance by small and medium-sized enterprises
• Promote fiscal consolidation and alignment of budgets with developmental priorities Governance structure
• Encourage institutional development and create an appropriate legal framework that pro- motes accountability
c) Breakaway session 3: the role of various stakeholders in closing the inequality gap
58. In the light of ongoing efforts by international, regional and national actors to combat poverty and rising inequality, and the international, regional and national laws and protocols that underpin those efforts, highlight up to five new actions and/or programmes to be undertaken by governments (central, provincial, municipal and traditional); the private sector (domestic and foreign); civil sector organizations (non-governmental organizations, trade unions and academia); development partners, such as regional and international financial institutions, and the United Nations; and regional economic communities, such as the Common Markey for Eastern and Southern Africa, the East African Community and SADC:
(i) Actions by governments
• Strengthen policy frameworks on inequality, such as on decent job creation and redistribu- tion
• Allocate sufficient resources for poverty and inequality reduction programmes
• Decentralize decision-making and ensure that requisite structures are in place
• Effectively coordinate interventions and actors to maximize their impact in the fight against poverty and inequality
• Establish monitoring and evaluation mechanisms and frameworks to strengthen account- ability
• Enhance the capacity of local organs to implement, monitor and evaluate policies on pov- erty and inequality
• Establish platforms to strengthen public participation programmes to foster transparency and accountability
• Design government procurement policies to promote job creation for citizens, particularly in government infrastructure and development programmes
• Adopt a long-term vision on tackling poverty and inequality through job creation, building on the good practices established by Mauritius
(ii) Actions by the private sector:
• Ensure that companies comply with tax laws and pay taxes
• Strengthen private sector corporate social responsibility and empower local communities through backward and forward linkages to the local economy
• Ensure that information on compliance is shared among counties’ tax regimes
• Promote private sector reinvestment of profits locally to create more jobs
• Encourage investors to promote meaningful skills transfer with a view to strengthening local skills pools
• Promote labour-intensive production methods to ensure a human face in economic activity
• Ensure that the private sector complies with global and local labour laws
• Encourage the private sector to explore public-private partnerships with a view to maximiz- ing the private and social impact of their business activities
(iii) Actions by civil society
• Strengthen the means by which citizens can hold Governments and the private sector ac- countable
• Strengthen the capacity of civil society to call for change and hold stakeholders accountable
• Adopt appropriate statutory or self-regulatory frameworks for civil society organizations
• Enhance collaboration among civil society organizations, government agencies, the private sector and development partners
• Support policy-focused and relevant research among academia
• Integrate academia into the poverty and inequality reduction agenda through participation in related policy debates and formulations
• Establish effective think tanks within academic institutions (iv) Actions by development partners
• Invest in science and technology, and in vocational training, with a view to enhancing the skills of young people and women, and, as life expectancy among members of the middle class has improved, to enhance the skills of early retirees
• Provide financial support to young people and women to enable them to raise the necessary collateral to qualify for loans
• Reinvest profits into agricultural productivity and value addition
• Support governance initiatives that strengthen inclusivity
• Fund research that is relevant to policymakers
• Invest in capacity-building in member States, including in the area of public financial man- agement
• Scale up successful best practices
• Enhance the coordination of initiatives that reduce the compliance burden of recipients in accordance with, among others, the Paris Declaration on Aid Effectiveness and the out- comes of the Third and Fourth High-level Forums on Aid Effectiveness.
(v) Regional economic commissions
• Promote implementation of existing resolutions, including by establishing mechanisms to measure progress towards implementation
• Focus on market size and integration
3. Agenda items 9 and 10: Conclusions and recommendations
59. The experts discussed and adopted the amended workshop outcome statement. The full statement is attached as annex I to this report. The experts stressed that the background document and other workshop documents should be finalized quickly and submitted to policymakers as soon as possible.
4. Agenda item 11: Closure of the workshop
60. The Chair thanked ECA for the opportunity to participate in the meeting and the participants for their lively discussions and contributions. He also noted with appreciation the confidence extended by the participants to Zambia and his election as Chair of the workshop, a role which he believed that he had carried out to the best of his ability. He urged ECA to promote
implementation of the recommendations of the workshop to ensure that they strengthened efforts to tackle inequality and reduce poverty among members States and the subregion as a whole. He concluded by urging participants to continue to network on the issues discussed at the workshop.
61. Speaking on behalf of the United Nations Country Teams, Mr. George Lwanda expressed his appreciation for the active involvement of the experts in the discussions. He reassured the workshop participants that the organizations involved in arranging the workshop would continue to work to ensure that the document was completed rapidly and disseminated to the uppermost echelons of national and regional policymakers. He invited the experts to spread the messages articulated during the workshop in their respective countries and within their national organizations to ensure the mainstreaming of the fight against inequality.
62. In his closing remarks, the Director of the Subregional Office for Southern Africa, Mr. Said Adejumobi, expressed his gratitude to the experts for their insightful and engaging discussions and to the Chair and the rapporteur for effectively guiding the meeting. He also expressed gratitude to the Government of Zambia for the support extended in hosting the workshop.
63. Mr. Adejumobi commended the consultant for a high quality report, which would be updated with input from the workshop. He also promised to take forward the work of ECA on the African Social Development Index, finalize and publish the workshop report, prepare a policy brief on the basis of the report, organize policy dialogue on issues emanating from the report and disseminate the report and bring salient issues to the attention of policymakers in member States and the subregion. He encouraged experts to engage ECA on other ways of taking the recommendations of the report forward to achieve maximum results, narrow inequality and reduce poverty.
Annex 1
Outcome statement of the expert review workshop on economic growth and inequality in Southern Africa: issues and policy options
19-20 June 2014 Livingstone, Zambia
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 investment 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.
