Economic Connectiveness and Pro-Poor Growth in Sub-Saharan Africa: The Role of Agriculture

Abstract

In Sub-Saharan Africa, economic growth is essential for poverty reduction, and pro-poor growth is the renewed focus of today’s political debate. The present paper adds to the literature on the growth–inequality relationship. It provides an in-depth analysis of the potential role of agriculture in promoting pro-poor growth in rural and urban areas compared with that of other activities. This aspect still lacks rigorous empirical support. Using the Nexus project SAMs by the International Food Policy Research Institute, this study identifies the level of ‘keyness’ of 36 activities (12 are agricultural) in nine Eastern, Western, and Central African countries using the inter-industry linkages analysis. Afterwards, it investigates the income distribution multipliers effects of activities growth across households classified in quantiles in rural and urban areas. Therefore, the paper adds to the literature, mainly focused on rural poverty and information on the growth effect on urban poverty, which is important in the context of rapid urbanization and the growing number of poor people in African cities. Apart from country-specific factors, the results confirm the strong integration of agriculture with the economy. The growth of key agricultural activities presents the most pronounced multiplicative effect on the income of rural households in the lowest quantiles. Poor urban households also benefit from their growth, but not to the same extent as rural households with an increase in the rural–urban income gap.