Evidence matters for inclusive growth policy

Like many developing countries, Mozambique is struggling with problems of poverty, inequality, low productivity, unemployment, and low institutional capacity. The COVID-19 pandemic is now adding to these challenges. Finding solutions hinges on examining, understanding, and building the evidence that is critical in making our policy choices. And this is what the researchers and participants at the 2020 annual conference of the Inclusive growth in Mozambique programme pitched in to do — including on the following key issues.

1. The heavy weight of COVID-19 for the poor

The conference kicked off with discussion of the COVID-19 pandemic, which has impacted all economies around the world. COVID-19 is pushing many individuals back into extreme poverty and worsening working conditions and wages, especially for those in the informal sector. Many African countries are ill-prepared for lockdown measures, as people’s health and welfare are made vulnerable by a lack of essentials such as safe water, sanitation, energy, and sources of income. As highlighted by the studies on Africa’s lockdown dilemma and the role of trust and poverty in compliance to social distancing measures, high poverty rates and low trust in government institutions reduce the effectiveness of measures to contain COVID-19 transmission. To combat this, governments should promote social protection policies, such as cash or food transfers, that can release some of the burden poor families face and enable some degree of social distancing.

2. The key role of agriculture and structural transformation in development

The agricultural sector contributes significantly to GDP, employment, and livelihoods in Mozambique and other low-income countries in sub-Saharan Africa. Nevertheless, in light of rapid population growth and climate change, its low productivity is a serious concern for farmers and policy makers alike. Increasing agricultural yields has the potential to lift many out of extreme poverty and promote inclusive growth. The IGM conference reviewed evidence that shows how critical access to finance and adoption of communications technology is to achieving this policy goal, especially among small agricultural producers.

3. Education as the path for productive and decent work

While education is seen as an engine for human capital development in developing countries, much still needs to be done in education and training to boost job quality. Mozambique is characterized by high informality, which affects the availability and quality of information on opportunities for those entering the workforce, and consequently job prospects and outcomes.

A study by Sam Jones and Ricardo Santos shows that giving information about peer earnings to recent university graduates looking for jobs make them revise slightly their expected salary. Another common problem is that university graduates still lack the skills which employers demand. In their study of Nigerian university students, Uchenna Efobi and Ajefu Joseph found that additional IT skill training is an effective way to increase their probability of finding a job, having shorter unemployment spells, and earning higher wages.

4. Inclusive growth means including all

Women make essential contributions to economic and social development, but in many countries they benefit less from what is produced. Closing gender gaps and empowering women should be a key target for policy makers aiming to alleviate poverty and make growth more inclusive. Highlighting the current constraints faced by many African countries, for example a study by Tsegaye Mulugeta Habtewold showed that while women in rural Ethiopia are more likely to spend their income on their families’ wellbeing compared to men, women have limited access to land and tenure security, and are less likely to receive education, training, and access to credit.

The path for inclusive growth in Africa in general, and for Mozambique in particular, remains long. Forty studies presented over five conference days may not even begin to cover all aspects that can make up feasible solutions, but they shed light on what policy makers can do to include the entire  population in the development process. As the name of conference suggests, evidence is the key to transforming claims into facts and creating policy solutions that work in context.

The views expressed in this piece are those of the author(s), and do not necessarily reflect the views of the Institute or the United Nations University, nor the programme/project donors.

This article was originally published on the WIDERAngle blog in December 2020.