The Role of Land In Social And Industrial Structural Transformation

By Prof Rukuni
STRATEGIC QUESTIONS FOR AFRIKA

What are the macro-economic foundations for structural transformation in Afrika?

Can improved land governance, land and agrarian reforms address the un-orthodox structural transformation?

What happened to Afrikan traditional wisdom that Land is primary source of wealth, social status, identity and political power?

In my own country the new Minister of Lands and Agriculture – Dr. Anxious Masuka in December 2020 promulgated a 2 pager press statement basically indicating Government disappointment in the unacceptable levels of land underutilization. He has basically drawn the line and indicating that some may lose land allocated to them as there is a huge waiting list for land!
THAT IS WHY WE NEED TO ENGAGE THE LAND ISSUE ACROSS THE CONTINET
Land is the basis of all wealth, secret to fast industrialization of our economies, starting with rural industries and building the much needed rural middle class and overall leading to inclusive structural transformation of our great continent.

The ontological and teleological significance of Land is in the traditional appreciation that Land is bigger than us, has been here longer than us, in fact we are daughters and sons of the soil! Our rural birth-places and/or birthplaces of our forbearers not only embody our identity, but more importantly, rural space with its mountains, forests and water bodies, provide the psycho-spiritual power of freshness and renewed energy to the body and spirit.

And that is why it does not matter how far you are physically from home, and it does not matter for how long you been physically away, and especially those Afrikans in Diaspora, you are always here in the Motherland spiritually.

For those of us here, Commit to physically developing your land not just houses. Make every square centimeter feel loved, productive and homely. We have to masters of land asset management.
STRATEGIC OPTIONS TO ESCAPE MIT
Import substitution industrialization using protective tariffs

Export-oriented industrialization using targeted firm-level subsidies

Open- economy industrialization inviting foreign direct investment in domestic industry

Expand domestic market through land and agrarian reforms and agriculture- led industrialization

These are NOT mutually exclusive. Key is establishing competitiveness in the long-run.

Option 4 most returns to triple challenge than 1-3 because:
Agriculture large % population, smallholder agric. pre-requisite high priority investment
China, 1980-2001 -$1 of value added growth in agriculture induced $1 of growth in non-agriculture, while $1 of growth in non-agriculture only induced $0.18 in agriculture (de Janvry and Sadoulet, 2008).
LESSONS FROM CONTEMPRARY CIVILISATIONS WHOHAVE BROKEN THROUGH MICs
Rural transformation succeeds only when driven by ENTIRE ECONOMY:

Expand domestic market (wealth creation)

Diversify rather than upgrading existing manufacturing activities

Create backward and forward linkages between sectors

Produce new goods which expands domestics markets and demand

Reduce dependence on foreign demand; less susceptible to external shocks

A multi-sector approach to rural transformation
THE SECRET TO FAST INDUSTRIALISATION: THE RURAL MIDDLE CLASS
Rural middle income status is average $4 to $20 per day income, or $1,500 to
$7,000 per annum.

Once a rural resident attains $4/day, they start consuming more LOCALLY MANUFACTURED GOODS AND SERVICES, more meat, fruits and vegetables.

This is the SECRET TO INDUSTRIALISATION and urbanisation with jobs:
CREATE OWN DOMESTIC DEMAND

Industry will happen everywhere including rural areas, small towns and growth points and in high density suburbs and peri-urban spaces.
FAST-TRACK INDUSTRIALISATION THROUGH:
“MASSIFICATION”
Mass production
At least 50% of the rural population must produce for factories and supermarkets supported through AGGREGATION and AGROLOGISTICS

Mass processing
Domestically, small towns, villages and townships
Focus on 50 km radius

Mass consumption
Biggest market is half of Afrika’s hungry population who can’t afford 3 meals
a day
Focus on 50 km radius
We need a new imagining of the industrial processes

Embraces industrial upgrading as opposed to substitution – 3 stages:

Stage 1: Proto-industries
Stage 2: Light industries
Stage 3: Heavy industries

The market is no God-given, rather largely a public good shaped by public policy and economic governance

COVID-19 has its positive side
Covid-19 provides wake up call even for industrial and food systems

Over-reliance on global and regional markets not wise

Also need to rethink Agro-industrialisation process.

This is wake up call for self reliance and re-crafting the industrial process
Main Conclusion Development is about people
Helping people to help themselves
Building their own capacity to learn, innovate and co-create knowledge
Building their CONFIDENCE in their culture, knowledge systems
Building their capacity to borrow intelligently

MODERNISE DON’T WESTERNISE!
MYTHS & PARADOXES WE WILL BLAST ……
Large versus small farms
Traditional land rights versus Western titling
Financial performance versus economic performance
Role of government versus role of private sector (big business)
Privatization versus commercialization
Inheritance versus succession
Cash versus wealth
Land bank versus commercial bank