STRUCTURAL TRANSFORMATION IN SUB-SAHARAN AFRICA: THE REGIONAL GROWTH POLES STRATEGY

1. STRUCTURAL TRANSFORMATION IN SUB-SAHARAN AFRICA: THE REGIONAL GROWTH POLES STRATEGY 2011 African Economic Conference 25th – 28th, October 2011 Addis Ababa – Ethiopia

2. OVERVIEW OF PRESENTATION Introduction Literature Review ? Concept of Growth Poles ? Channels of Transmission of Growth Poles from Core to Periphery Empirical Results for Growth Polarity in Africa A Framework for Structural Transformation in Africa through Development of Growth Poles ? Identifying Regional Clusters ? Value Chain Development Policy Recommendations Conclusion and Agenda for Further Research

3. INTRODUCTION Structural transformation remains elusive in SSA Disparities among countries could induce unfavorable socio-economic consequences, threatening overall stability Objective: Proffer alternative solution for transformation in SSA based on the growth pole strategy ? Identifying regional clusters that would serve as development corridors ? Developing value chains of activities and commodities within each cluster Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

4. LITERATURE REVIEW (Concept of Growth Poles) Perroux (1950) provide a theoretical formalization of growth pole Grouping industries around a core that are able to impact growth for the core area as well as that of the surrounding areas Support the potential pole through infrastructure enhancement and incentives to private firms “poor locations” and “politically driven” growth poles are challenges of successful growth pole development Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

5. LITERATURE REVIEW (Transmission Channels from Core to Periphery) Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

6. EMPIRICAL METHODOLOGY Follows Adams-Kane and Lim (2011) Growth Trade Capital Flows Migration Technology Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

7. EMPIRICAL RESULTS (Real GDP Growth) Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

8. EMPIRICAL RESULTS (Trade) Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

9. EMPIRICAL RESULTS (Capital Flows) Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

10. EMPIRICAL RESULTS (Migration) Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

11. EMPIRICAL RESULTS (Technology) Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

12. CLUSTER AND VALUE CHAIN DEVELOPMENT Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

13. POLICY RECOMMENDATIONS Develop in-country and regional infrastructure to support growth poles Improve natural resource exploitation and management AfDB should take the lead in driving the growth pole process while the ECA and AU provide the political buy-in Identify specific value chains and clusters for development in SSA countries and be committed to it Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

14. CONCLUSION AND AGENDA FOR FURTHER RESEARCH Structural economic transformation is not impossible in SSA Political will and commitment required to transform SSA through growth pole strategy Empirically establish determinants of growth polarity in SSA(institutional quality, per capita income, economic integration, etc) Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.

15. Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.Growth pole strategy ensure a diffusion of growth from strong areas to weak areas such that with time uniform growth is achieved. Such uniform growth reduces the probability of strain on the strong growth areas by weak countries. Usually, this concept has been applied on a country. However, in this paper, we are suggesting its application to a region.