Moving Up or Moving Out? Insights into Rural Development and Poverty Reduction in Senegal

Abstract

While worldwide progress in poverty reduction has been impressive, Sub-Saharan Africa is lagging behind with slow growth and a high-poverty headcount ratio. There are fierce debates on how Sub-Saharan Africa can foster pro-poor growth and the role of agriculture and small- versus large-scale farming in poverty reduction. We contribute to this debate with micro-economic empirical evidence from the Senegal River Delta, an area that recently experienced rapid rural development. We use household survey data from two panel rounds in 2006 and 2013 and a cluster analysis to investigate livelihood, income, and poverty dynamics in the region. We find that with 4.3% annual growth in average household income, 29.5 percentage points’ poverty reduction, and 4.2 percentage points’ inequality reduction over the period 2006–13, development in the Senegal River Delta region has been remarkably pro-poor. Income growth and poverty reduction have been most impressive among households moving into wage employment on large-scale horticultural export farms and in an emerging service sector. Income growth in small-scale agriculture and non-farm businesses has been more modest but has affected the largest number of households. Transformation in both farm and non-farm sectors has driven rural development in the Senegal River Delta region, and investments in both large- and small-scale agriculture have contributed importantly to household income growth and poverty reduction. Our findings imply that (foreign) investments in large-scale commercial and export-oriented farming can trigger pro-poor growth—directly through employment effects and indirectly through investment and consumption linkages with the small-scale farm and non-farm sector.