Three Interventions to Foster Sustainable Transformation in Africa

In recent years several African countries have embarked on reforms aimed at structurally transforming their economies to minimize their dependence on primary exports and generate greater employment opportunities through value-addition. Meanwhile, the recently adopted 2030 Agenda for Sustainable Development and Africa's continental development initiative (i.e., Agenda 2063) call on member countries to integrate environmental, social and economic sustainability considerations into their transformation initiatives and to avoid the untenable “grow first and clean up later” strategy pursued by industrialized countries. This paradigm shift essentially makes sustainability an integral component of any structural transformation initiative going forward. However, the experiences of industrialized and emerging countries highlight potential trade-offs between growth, social inclusion and environmental conservation. For instance, China's transformation has been associated with steep declines in poverty but rising inequalities and dramatic increases in the level of greenhouse gas emissions. How will the pursuit of sustainable development influence structural transformation pathways in Africa? We argue that sustainable structural transformation requires careful sequencing of policies to minimize trade-offs and leverage synergies among the economic, social and environmental dimensions of sustainability. Drawing on the New Structuralist Economics school of thought which posits that structural transformation requires factor endowment upgrading underpinned by active government intervention, we identify three mutually reinforcing areas of intervention to catalyze sustainable structural transformation in Africa: investments in human development; investments in energy; and leveraging innovations in mobile telephone technologies for financial inclusion