The inaugural Annual Bank Conference on Africa examined strategies for converting economic growth into poverty reduction. Taking an economic historian’s perspective, the prospects are complicated by long-term shifts in fundamental patterns, specifically from land abundance to land scarcity and, relatedly, from labor repression to landlessness as the principal source of poverty.
Up until the twentieth century in sub-Saharan Africa, land availability was not the major constraint on the expansion of output – with Ethiopia being the one exception. Land abundance favoured basic food security, droughts or other natural disasters permitting. Under these conditions, poverty took two main forms: “conjunctural” poverty, where a person is isolated from their usual support networks by personal or collective misfortune; and poverty stemming from labor repression. The latter was intended to cut the cost of largely unskilled labor in settings in which —given land abundance—people would not work for someone else unless offered relatively high wages. Labor repression could be direct, as in precolonial slavery and colonial forced labor, or it could be indirect, as with land grabs in settler colonies — a major motive for which was to force smallholders to sell their labor, bringing down average wage rates.
Much of the poverty reduction in the twentieth century was made possible by the decline of labor repression, slow and uneven as it was, and incomplete as it remains. The type of colony mattered for the evolution of poverty. The real wages of African laborers grew earlier and more consistently in “peasant colonies” such as Ghana than in settler economies such as South Africa. Likewise, infant mortality fell in early twentieth-century Ghana, but rose among the black population of South Africa. What lay behind this contrast was that the households of Ghana, unlike their counterparts in South Africa, were able to increase their incomes through agricultural production for the market.
The resulting poverty reduction in Ghana, and in comparable cases such as Nigeria, was premised also on the ending of the internal slave trade, and, more slowly, of slave labor. Where it was profitable to grow cocoa for export, for instance, masters could afford to become employers, while former slaves could become cash-cropping farm-owners or migrant laborers—the latter working mostly for relatively small-scale African farmers. Without slavery, the incomes of households in these “peasant” cash-crop economies could reflect the underlying relative scarcity of labor. Investigation of real wages in British colonies in the cities of West and East Africa indicates that, up until the Second World War, real wages there—especially in West Africa—were higher than in Asian cities. Current research on the heights of Africans recruited into the colonial army in Ghana shows that physical welfare rose in all regions of the country, including those exporting laborers rather than cocoa beans.
Meanwhile population growth rates in Sub-Saharan Africa have significantly increased over the last 100 years, partly as a result of lower mortality rates resulting from public health measures. More people, plus more land under export crops, have shifted African economies towards land scarcity and labor abundance. Colonial governments often sought to avoid the creation of an African proletariat—a class completely without land rights—who might challenge social and political order. They generally avoided giving land titles to Africans, for fear that smaller farmers would sell their land. Post-independence governments were likewise reluctant to promote rural-urban drift, fearing its implications for unemployment, crime, and political discontent.
The current ‘land rush’ in Africa may sweep over the remaining institutional obstacles to land sales. In some areas, the results may include a net reallocation of land towards more productive uses. It is hard not to see it as also leading to higher landlessness. If what remains of the floor which land rights put under wages in some economies disappears, one result may be more internationally-competitive labor costs. This could, in turn, facilitate labor-intensive manufacturing and thereby help to sustain economic growth. But another outcome is likely to be a major increase in the size of economically precarious populations, with landlessness emerging as a major facilitating condition for poverty and a major constraint on converting more growth into less poverty.
This blog is part of a series featuring Africa-related research on poverty reduction.