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Development in South Africa: Bridging the Gap

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To live in one of the most unequal yet highly urbanised societies in the world means that there are high levels of inequality, poverty and other injustices that the majority of the population have to live with  (Burger, Van der Berg, van der Walt, and Yu, 2017). This reality carries with it not only decades of discriminatory policies, but poverty stricken livelihoods that cripple any chance of progress in a society where wealth has a strong racial correlation (Burger, et al, 2017; Leibbrandt, Woolard, and Woolard, 2000). While South Africa is the most advanced and diversified economy in Africa, and the wealthiest in terms of GDP per capita, the country is still haunted by high levels of inequality. According to the 2018 World Bank Report, more than half of South Africa’s population lives below the upper poverty line of R992 per month per person by use of 2018 prices. These are the realities that we are faced with – this is in addition to being the leading country in the world in unequal income distribution with a Gini index of 63.4 as shown in Table 1.1. Although great strides have been made in targeting unemployment and economic growth to ensure that development has taken place, historical inequities still need to be addressed adequately in order to improve the quality of life for the majority of South Africans, and to bridge the gap between these parallel worlds. This chapter will take measure of the nature of inequality as well as advance some routes which could be taken to allay the present challenges.

The world’s 10 most unequal countries

(Source:https://www.worldatlas.com/articles/the-world-s-most-unequal-countries.html)

Ranking Name of country Gini coefficient
1 South Africa 63.4
2 Namibia 61.3
3 Haiti 60.8
4 Botswana 60.5
5 Suriname 57.6
6 Zambia 57.1
7 Central African Republic 56.2
8 Lesotho 54.2
9 Belize 53.3
10 Swaziland 51.5

Not a New Idea

The idea of bridging the gap between two parallel worlds is not one that is unheard of (Zhu, 2017). Asia, being the largest continental economy by GDP (Gross Domestic Product), also implies that it has experienced rapid socioeconomic development in recent years. A great example of this is China – since the late 1970s, the development in the cities has not only attracted immense inflows, but have also been a key driving force for urban growth and development, with the 2010 census stating that 87 percent of China’s “floating” population migrated to cities and towns from villages. Zhu and his colleagues make use of the in situ urbanization, which refers to the process of rural settlements and populations transforming themselves into urban or quasi-urban ones with little geographical relocation of the residents. This phenomenon has two dimensions whose development has played a key role in China’s urban growth between the late 1970s and the late 1990s (Zhu, 2017). Of the two dimensions, one of them focuses on the creation of new industrialised centres, and the other dimension refers to the practical and physical modifications of rural areas through the expansion of township and village enterprises (TVEs) (Zhu, 2017).

The experiences of developed countries propose that in the industrial period and post-industrial period, many individuals and their families move between and/or within cities numerous times due to changes in either employment status or housing needs, which are often caused by various life cycle events such as marriage, child bearing, etc. This is the kind of urban-urban and intra-urban mobility that is often observed in many developed countries (Zhu, 2017).

From the case study mentioned above, we learn that incorporating migration along with in situ urbanisation will not only ensure that people residing in the rural areas benefit from the prosperity of the cities, but will also benefit from the resources and potential development that could occur in their hometowns (Zhu, 2017). Spatial links will need to be visualized and implemented at finer spatial levels, with “a coordinated regional approach” required to “cuts through fragmented boundaries” in order to assist the movement of people between and/or within urban and rural spaces (Zhu, 2017). Additionally, more attention will need to be given to issues of various social security programs and public services, to ensure that migrants will not be disadvantaged by this migration (Zhu, 2017). Gopaul’s (2009) paper based on the South Africa case also indicates that something needs to be done to assist people living in rural areas who live in extreme poverty; else, their standard of living will continue to worsen. He suggests that the solution lies in tourism – “to accomplish rural development, there is a need to nurture a sense of willingness and enthusiasm amongst the poor communities to participate in rural development” (Gopaul, 2009).

The Evolution of Urban Development in South Africa

Rapid development and large scale rural-urban migration in South Africa were inspired by the discovery of diamonds in Kimberly, and that of gold in the Witwatersrand in the 1860s and 1880s respectively (Mabin, 1992; Turok, 2012). These economic activities brought some much-needed opportunities to the rural community, and transformed South Africa from an agricultural state to an industrialized nation (Moomaw and Shatter, 1996; Turok, 2012). An invasion of foreign investment in mining from De Beer, Anglo American and Consolidated Gold Fields was also witnessed in the late 1800s, and further generated rapid growth of support industries and services that were supported by temporary migrant labour that was migrating to the cities (Turok, 2012). As a result, the developing world – including South Africa – has witnessed unprecedented growth in urbanisation rates in the last two decades (Cohen, 2006). Thus far, urbanisation in South Africa has been increasing by roughly 0.5% on a year-to-year basis, with technological innovation and employment in urban areas continuing to increase due to its ability to offer considerable socio-economic opportunities in comparison to rural areas. Behrens and Robert-Nicoud (2014) further argue that cities are not only the locus in which inequality materialises, but they are hosts to instruments that contribute extensively to changes in that inequality.  Thus, it is not surprising that individuals seem to migrate to economic hubs where more opportunities exist (Behrens and Robert‐Nicoud, 2014; Ozler and Hoogeveen, 2005).

Having an urbanised economy or cities as economic powers while rural communities are under-developed is not an exclusive South African phenomenon – it happens all over the world because of several reasons as seen in the case of Asia. Amongst the key reasons is that of economies of scale and rural-urban migration. As such, Fields (1972) referred to the rural-urban migration theory as an economic phenomenon in his paper. The theory hypothesizes that workers compare the projected incomes in the urban sector with agricultural wage rates in the rural areas and migrate if the former exceeds the latter. In addition, the rural-urban migration is often regarded as the adjustment mechanism that workers use to assign themselves between different labour markets, some of which are located in urban areas and some located in rural areas. Thus, rural-urban migration is the equilibrating force that connects rural and urban projected incomes and is regarded as a disequilibrium phenomenon (Fields, 1972).

Consequences of Urbanisation

Over time, we have observed how urbanised South African cities are, and how they continue to advance. The downsides of these advances have had destructive societal, economic and environmental consequences (Turok, 2012). Meanwhile, rural areas continue to remain under-developed with high levels of deprivation with respect to sanitation, access to water and access to energy, high levels of unemployment, inadequate use of natural resources, insufficient access to socio-economic and cultural infrastructure, low skills level and insufficient literacy rate (Behrens and Robert-Nicoud, 2014; Burger, et al, 2017; Gopaul, 2009; Krishman, 2016; Ozler and Hoogeveen, 2005).

Upon the analysis of international studies, Barro (2000) found that people living in rural areas might be using old technological methods, whereas urbanised areas employ more recent and advanced techniques in their daily undertakings. As such, we observe how large municipalities within the cities are deeply accommodative of additional commercial services and more advanced roles concerning finance as well as developmental projects; whereas smaller municipalities, which are mainly located on the peripheries of the cities are only able to accommodate a large portion of lower mandate facilities and industrial work (Behrens and Robert-Nicoud, 2014). In addition, these smaller municipalities are often under-resourced and are surrounded by areas that have high levels of poverty and deprivation.

As it stands, an approximate 66% of South Africans are living in urban areas, with the expectation that eight in ten people will be living in urban areas by the year 2050. This not only means that the demand for infrastructure and housing will increase rapidly, but the cost of living will also increase for the average South African. Though urbanisation is the most convenient instrument currently being used to accelerate the rate of growth in developing countries by means of (i) driving economic growth, (ii) sustaining larger and more productive populations, (iii) sourcing higher means of income, new and diversified engines of growth need to be considered. The results of having cities that are too urbanised may have negative externalities that may affect negatively on rural economies, whose role is to provide economic sustainability and food security (Krishman, 2016). As such, other measures need to be considered if we are to sufficiently and effectively bridge the gap between rural economies and urban economies in order to ensure that growth takes place in a way that is beneficial to everyone.

Although cities are the dominant centres of economic activity and employment, and continue to attract maximum foreign investment; they are not performing to their potential or reaping the benefits of agglomeration due to prevailing shortages of energy and water infrastructure, transport congestion and deficits in education and skills (Turok, 2012). This is in addition to creating poverty traps on the peripheries of the cities, which results in favouritism for road-based transport – private cars and minibus taxis (Turok, 2012). To ensure that rural economies are not left behind in this fast paced economy, we need to consider redeveloping rural areas into sustainable communities that can support themselves economically (Gopaul, 2009; Krishman, 2016).

Poverty and Inequality in Rural Areas

Households that have high levels of poverty and inequality are largely black or coloured communities who tend to reside on the periphery of the cities, thus, a high level of vulnerability is usually observed in some areas that are remote and isolated from the main cities (Burger, et al, 2017). High levels of unemployment are largely concentrated among the poor people in rural areas and continues to remain a core challenge in the South African economy with a 238% growth from 1 703 863 in 1994 to 5 752 632 in 2016 (Dube, das Nair, Nkhonjera, and Tempia; 2018 Quantec, 2018). According to Ozler and Hoogeveen (2005), South Africans are neither separate, nor are we equal in post-Apartheid South Africa. The authors make this statement because the question of whether the economic inequalities of the apartheid era have faded remains, especially with the high levels of poverty and inequality that this country still faces in the rural areas.

Poverty is at an all-time high in South Africa and is highly concentrated within the African race, women, rural areas and the youth (Triegaardt, 2006; Woolard, 2012). Statistics show that Africans account for 95% of the poor population and a large percentage of them reside in former homelands, rural areas and townships households (Woolard, 2012).  It is also important to note that poverty is closely linked with the mortality rate. This stems from the fact that poor people have difficulties in accessing health care facilities seeing as they do not have the basic income for transport services, nutrition and clothing which further perpetuates the high levels of inequality (Woolard, 2012). Consequently, the unsatisfactory living conditions continue to intensify the high poverty levels, which further exclude and marginalise poor people from participating in the economy (Triegaardt, 2006; Woolard, 2012). As such, agriculture presents opportunities of job creation, particularly in rural areas (Dube, et al, 2018). As a labour-intensive and rural industry, agriculture makes a contribution of 10% to total employment. However, a slight decline has been observed between the period of 1994 and 2016 – from 12 percent to 6 percent (Dube, et al, 2018).

How Can Agriculture Help Eliminate Poverty and Deprivation?

In rural areas all over the world, agriculture represents the principal land use and is a major element of the practicality of rural areas. Rural communities can be developed to increase their competitiveness in agriculture. The in situ urbanisation case mentions to how rural areas have to transform themselves into urban or quasi-urban ones with little geographical relocation of the residents; in the case of South Africa, this can be achieved through agriculture. Farming and related undertakings primarily encompass the basic fabric of rural life, contributing meaningfully to the overall state of rural areas by facilitating and creating employment, business prospects, infrastructure and quality of the environment. This can be a driving force for economic growth and can have lasting impacts on the overall community.

In South Africa, agriculture is a twofold production system that comprises of large-scale commercial farmers and small-scale farmers (Dube, et al, 2018). As it stands, agricultural production remains concentrated on field crops given their prominence in determining national food security. However, the growth in South Africa’s agriculture sector –the fruit sector and small-scale farmer participation in particular – is restricted by insufficient infrastructure; mainly ripening facilities, pack-houses and cold storage facilities (Dube, et al, 2018). This limitation causes costly delays, limits entry into the formal sector and hinders expansion into export markets.

Government or private sector needs to intervene by initiating and constructing capabilities in agriculture and agro-processing if these small-scale manufacturers do not have the means to get their products to final consumers (Dube, et al, 2018). What will ensure success in this initiative is linking farmers with large producer-exporting companies that already have access to infrastructure and international markets (Dube, et al, 2018). The government can then incentivise large producer-exporting companies to collaborate with minor producers. In return for large-scale companies lengthening technical services and information on production and standards to small-scale farmers, the large companies can be offered tax breaks, grants for investments in storage and cold chain amenities or support with raising funds. This initiate is one that not only benefits the small-scale farmers, but also the capability to have spill over effects that will benefit the whole economy.

Recommendations

Rural areas undoubtedly have the potential to lead to great economic growth; however, this reality will only be possible if skills uplifted and investment in R&D (research and development) is prioritised. The results of investing in rural economies will have spill over effects and positively impact on urban areas, while creating employment in the peripheries of the country. With a highly urbanised country as South Africa, it is crucial that we look into other alternatives which will not only benefit the country as a whole, but also have an undeniable impact that can bridge the gap between rural and urban areas.

Competitive agriculture in rural communities, particularly when supported by technological platforms can drive economic growth – an example of this is the Khula app.  Khula is a farming app founded by Karidas Tshintsholo with the aim of assisting emerging farmers in finding their feet. To date, 175 farmers are currently using it, and this has ensured that famers who were initially unable to access the formal markets can connect with suppliers. The purpose of the app is not only to assist small-scale farmers, but to assist with alleviating poverty and ensuring that young entrepreneurs have an opportunity to make a decent living.

With such great innovations taking place in the country, the possibilities of the kind of development that can be fostered in rural areas are endless. Indeed South Africa’s developmental woes can only be resolved from within; through South African ingenuity, and modulation of the experiences, technologies and investment of external partners.

Lesego Masenya is an Economics graduate student at the University of the Witwatersrand, where she obtained a BSc majoring in Economics and Computational and Applied Mathematics, Honours in Economic Science (with distinction) and is presently a Masters candidate in Economic Science. She obtained the Bain Africa award for top student in her Economic undergraduate class, and has numerous awards from Genesis Analytics including First Place in her Honours class and Top Female award from her undergraduate class.Her areas of research include inequality, poverty and development in South Africa. She is currently part of the United Nations University World Institute for Development Economics Research Young Scholars programme for the 2018/19 period. She is also a Postgraduate Researcher at Acacia Economics.

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U.S.-Africa Leaders Summit: Matters Arising and Way Forward

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On the eve of the U.S.-Africa Leaders Summit planned for December 13-15 in Washington, the Corporate Council in partnership with the African Union and the U.S. State Department hosted discussions which was a combination of online and offline with a number of experts from the United States and Africa.

Katherine Tai, the 19th United States Trade Representative and Secretary-General Wene from the African Continental Free Trade Area (AfCFTA), Ambassador Rama Yade, Senior Director of the Africa Center. Taking part was the Dean of the African diplomatic corps in the United States.

This discussion came on the eve of the US-Africa Leaders Summit (ALS), which will advance US-African collaboration on today’s most pressing global and regional priorities. The ALS will reflect the breadth and depth of US partnerships with African governments, businesses, civil society, and citizens-partnerships based on dialogue, respect, and shared values that harness the ingenuity and creativity of American and African people.

There were various themes during the discussion against the difficult geopolitical backdrop of high global economic imbalances slowing direct investment into the continent as well as accelerating shifts in the job market. 

Worth noting that the United States – Africa Leaders’ Summit will be hosted by President Joe Biden, and it primarily serves as a demonstration and commitment towards the African continent and further provides the platform for new joint initiatives between the United States and countries in Africa.

The discussion reviewed, somehow the current relations as well as possible new initiatives to boost the continent’s recovery from coronavirus pandemic, how to effectively bolster food security and to promote investment in various critical sectors including infrastructure, health and renewable energy, among other priorities.

On the other hand, the discussion also focused on strengthening the African diaspora communities and engage them in advancing a two-way trade and investment partnership, scale up innovation and entrepreneurship, and drive advancements in key sectors. 

The United States together with the African diaspora have a very unique opportunity to make sure to change the narrative of trade and focus on inclusive rather than only on market access. Supporting women and youth in  identifying opportunities, challenges and also barriers that confront them.

Questions such as what are the challenges that we can confront together and what are the solutions that we can present to heads of states and government to begin to change the last 60 years or so of exclusion of young people people for mainstream economic activity excluding – exclusion of small medium enterprises from mainstream economic activity to make them partners in the implementation.

The United States understands that African Union and African leaders are looking at regional linkages very strategically and then always around inclusivity. How and what to do better with economic engagement inside and outside, to bring everyone along and not to leave people behind.

The United States already plans to take concrete action to benefit young people including women, to benefit small medium enterprises, small cum medium enterprises in Africa, creating over 450 million jobs. And the bulk of that 450 million jobs are young Africans. 

The Corporate Council on Africa significantly undertakes the tremendous support and even galvanize U.S. leadership and engagement in partnership with allies and with partners to shape solutions to global challenges Africa. Its people have a critical role to play in achieving such solutions, Ambassador Tai noted in her discussion.

Nearly the discussants agreed all that will require a combination of private sector activities and governmental actions and one key governmental framework for Africa is the African Continental Free Trade Area (AfCFTA). The free trade area promises deepening economic integration. It creates a single market for goods and services for almost 1.3 billion people across Africa. In fact, the 50 for African Union members have signed the agreement, 42 members have ratified it and 39 have deposited their instruments of ratification.

The Secretary General of the the African Continental Free Trade Area (AfCFTA) during the summit will be able to discuss the way forward. The United States intends to fully engage with Africa as the recent Africa strategy says in a 21st century U.S.-Africa partnership and one aspect of that Africa is a friend shoring, which is to say working with reliable partners. It is noted to work within the framework that provides integration between West Africa and East Africa, between North Africa and Southern Africa.

Within the framework of the African Union agenda, the new generation who wants to build on geopolitical partnership dimension in the regional economic communities and with African countries. The point is that there are symmetries, obviously, between the economy and industrial development trajectory, and between developing and developed countries.

The African Growth and Opportunity Act offers rules and regulations relating to trade agreements, especially tariff liberalization, this is an important aspect for building sustainable economic cooperation between the two regions.

The United States and its partnering institutions (both public and private) can best work together to spearhead continuous complementary work as it relates to both business security for participating actors and investors and including for example, the global African diaspora and beyond industry for things like creative and cultural industries. 

The speakers unanimously confirmed the summit as the highest unique platform to determine the geo-economic centers, examine thoroughly the global priorities and challenges, and concretely design the main directions of U.S.-Africa cooperation. It offers, especially this critical times, an orientation towards the future, at least the next decade, between the African continent and the United States.

U.S.-African Leaders Summit 2022, aims at enhancing cooperation on shared global priorities. The heads of state and leaders from across the African continent will converge in Washington D.C., within the context of the United States-Africa Leaders’ Summit hosted by President Joseph R. Biden, President of the United States of America. 

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The Library Of Africa and The African Diaspora Announces AU20 Writing Project Winners

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The African Union (AU) in partnership with the United Nations Development Programme (UNDP) and the Library Of Africa and The African Diaspora (LOATAD) hosted a residency programme under the AU20 project for established writers from across Africa to produce a piece of work that celebrates the unity and potential of the African continent.

This year, the African Union celebrates its 20th anniversary since the organization’s establishment at the Durban Summit of July 2002. Dubbed AU20, the celebrations have taken place under the theme “Our Africa, Our Future” and focuses on the AU’s initiatives, successes, impact, challenges and the way forward. 

The writers residency took the form of a hybrid programme, with two online meetings in October/November and a two-week physical residency at the Library Of Africa and The African Diaspora (LOATAD) in Accra, Ghana from November 14 – 28.

Catering to the theme “Our Africa, Our Future”, five writers from the continent were tasked to interpret the theme in a broad and expansive way across a selected genre, including fiction, narrative non-fiction and poetry. The piece is pegged between 5,000 and 7,000 words (or five poems for poets) on the theme “Our Africa, Our Future” for the e-book. The final work will be published in an e-book anthology to be released in early 2023.

The AU20 project aims to elevate the profile of the AU in the minds of Africans, particularly the creative community, and better connect the AU to African citizens. Powered by Africa No Filter, the writers residency is a unique contribution towards bringing the African Union closer to the African people by selecting creative professionals who think outside the box, dare to challenge conventions and offer new and original work through their chosen materials, techniques and subject matters.

The Library Of Africa and The African Diaspora (LOATAD) together with the African Union, the UNDP and Africa No Filter have now announced the final winners of the AU20 writing project. Here are the five winners and bit of their professional backgrounds.

i) Nour Kamel from the Arab Republic of Egypt. Nour writes about identity, language, sexuality, queerness, gender, oppression, femininity, trauma, family, lineage, globalization, loss and food. She is the author of the chapbook “Noon” in New-Generation African Poets: A Chapbook Box Set (Sita).

ii) TJ Benson from the Federal Republic of Nigeria. His writing explores the body in the context of memory, migration, utopia and the unconscious self and his works have been exhibited, published in several journals, and shortlisted for awards. The author of three novels, his latest, People Live Here, is out now.

iii) Musih Tedji Xaviere from the Republic of Cameroon. She is a writer, activist, and Moth Storyteller. Her debut novel, These Letters End in Tears, won the 2021 Pontas and JJ Bola Emerging Writer’s Prize. It will be published in the US and UK in 2024 by Catapult and Jacaranda Books.

iv) Tony Mochama from the Republic of Kenya. He is a poet, author and senior journalist at The Nation Media Group. He is a three-time winner of the Burt Awards for African Young Adult Literature and is a recipient of the Miles Morland Writing Scholarship. His futuristic novel, 2063 – Last Mile Bet, was published by Oxford University Press.

v) Sue Nyathi from the Republic of South Africa. She is the author of four novels, her latest, An Angel’s Demise, published in October by Pan Macmillan. A Zimbabwean based in South Africa, she was shortlisted for the 2020 Dublin Literary Award and is a JIAS Fellow ’22.

According to reports, The Library Of Africa and The African Diaspora (LOATAD) received an overwhelming number of applications from across the continent, and the selected writers represent the best of African literary talent as well as the literary future. 

Started in a one-room office, the library attracted significant national and international attention and quickly outgrew itself. In 2020, it re-branded as the Library Of Africa and The African Diaspora and moved to a bigger space that includes a special collections/archive room, a screening room and extensive outdoor event space.

As a complete African library, it has also an archive, a museum, a writing residency and a research facility. It is dedicated to the collection and visualization of authors from Africa and the African diaspora from the late 19th century to the present. 

The library has over 4000 volumes of literary fiction and narrative nonfiction dating from the early 20th century to the present day. From Algeria to Kenya and from Liberia to Zimbabwe, the collections represent the rich diversity of the African continent and its vast Diaspora. 

LOATAD’s focus is on books by writers of African descent including African, African American, Caribbean, Black European, Afro-Latin, and Indigenous writers. The Library Of Africa and The African Diaspora (LOATAD) is located in Accra, Ghana. 

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Ramaphosa Faces Possible Impeachment for Corruption

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South African President Cyril Ramaphosa has fallen into turbulent waves and struggling to save his position and reputation. It has tainted image of and changed the global perception about South Africa, if Ramaphosa is finally impeached for corruption scandal similar to his predecessor Jacob Zuma. He, however, made corruption fight a top priority during the political campaign and has fallen victim himself.

Ramaphosa ousted former president Jacob Zuma in 2017 amid optimism that the new leader could rid the ruling party of graft and revitalise the economy. Zuma faces several corruption investigations, but denies wrongdoing.

He faces possible impeachment over claims that he tried to cover up the theft of millions of dollars stashed inside his commercial farmlands. Former State Security Agency director Arthur Fraser laid a criminal complaint against Ramaphosa in June over the theft in 2020. 

The Investigative Committee has concluded its report which report found the president may have breached anti-corruption laws. The African National Congress, the ruling party, has called for him to step down. But, Ramaphosa has denied wrongdoing.

“We are in an unprecedented and extraordinary moment as a constitutional democracy as a result of the report, and therefore whatever decision the president takes, it has to be informed by the best interest of the country. That decision cannot be rushed,” according to the spokesperson, Vincent Magwenya.

A panel report that found preliminary evidence that President Cyril Ramaphosa may have violated his oath of office is a “troubling moment” for the government and governing party, South Africa’s foreign minister Naledi Pandor said in an interview with the Reuters.

Pandor added that she was still reading the panel report on the robbery at Ramaphosa’s farm and that she did not want to rush into the public space with additional comments.

The panel’s findings come less than a month away from an elective conference that will decide if Ramaphosa gets to run for a second term on the African National Congress ticket in 2024 polls.

According to his biographical record, Ramaphosa is an anti-apartheid champion, and later South Africa’s wealthiest businessmen and then its most powerful politician and president. Born in Johannesburg on Nov. 17, 1952, the son of a retired policeman. Ramaphosa is a staunch member of the African National Congress (ANC).

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