Poverty, Growthand Institutions

Seminar Report

African Economic Research ConsortiumConsortium pour la Recherche Economique en Afrique

Matthew Martin, Joseph Karugiaand Marjory Gichohi

AERC Senior Policy Seminar VIICape Town, South Africa22–24 March 2005

i

AERC Senior Policy Seminar VIICape Town, South Africa

22–24 March 2005

Seminar Report

Matthew Martin, Joseph Karugia and Marjory Gichohi

Poverty, Growth and

Institutions

ii

The African Economic Research Consortium (AERC), established in 1988, is apublic not-for-profit organization devoted to the advancement of economic policyresearch and training. AERC's mission is to strengthen local capacity forconducting independent, rigorous inquiry into problems facing the management ofeconomies in sub-Saharan Africa. There are two principal approaches to this:learning by doing research in thematic, collaborative and other modalities, andsupport for postgraduate training through collaborative master's and PhDprogrammes.

Networking – the linking of individuals and institutions in a knowledgesharing, experience sharing framework – is the key strategic instrument forimplementing AERC's activities. The network approach links economists withinand outside the region and promotes professional esprit de corps.

The Consortium is itself a network of 16 funders who support a commonlyagreed programme of research activities, its dissemination and the training of futurepotential researchers. The Board of Directors sets broad policy, provides supportfor a multi-year programme of activities, approves annual work programmes andbudgets, and appoints the Consortium's international staff. An independentProgramme Committee sets the research agenda, advises on scientific matters, andreviews and approves proposals for research and training grants. Academic Boardsfor the collaborative master’s and PhD programmes oversee the implementation oftheir respective programmes. A small Secretariat, based in Nairobi, Kenya, managesthe programme and provides technical support to researchers, students andparticipating institutions. This organizational structure allows for ownership ofAERC activities by the network of local researchers, an independent determinationof the research agenda, and a programme of activities that is responsive to theprofessional and policy needs in the region, while at the same time ensuringaccountability to funders.

Poverty, Growth and Institutions AERC Senior Policy Seminar VII, CapeTown, South Africa 22–24 March 2005 – Seminar Report

Published by: African Economic Research ConsortiumPO Box 62882 – City SquareNairobi 00200, Kenya

Printed by: The Regal Press Kenya, Ltd.PO Box 46166 - GPONairobi 00100, Kenya

ISBN: 9966-944-70-2

iii

Contents

Abbreviations ivAcknowledgements v

Poverty – A Policy Dilemma 1Setting the Agenda 2Growth and Poverty Reduction: Do Institutions Provide

the Missing Link? 4Growth, Income Inequality and Poverty in Africa 5Governance, Power Diffusion and Pro-Poor Growth Policies 7Human Capital Investment, Growth and Poverty Reduction 8Institutions and the Design of Pro-Poor Globalization Policies 9Institutions to Overcome Regional and Gender Dimensions of Poverty 11Agriculture, Labour Markets and Pro-Poor Growth 12The Role of the Financial Sector in Pro-Poor Growth 13Priorities for New Research 15The Way Forward 17

AnnexesA List of Seminar Papers 19B Seminar Participants 20C Seminar Programme 25

iv

Abbreviations

AERC African Economic Research ConsortiumCEMAC Communauté Economique et Monétaire d’Afrique CentraleEAC East African CommunityISSER Institute for Statistical, Scientific and Economic ReserchNEPAD New Partnership for Africa’s DevelopmentNISER Nigerian Institute for Social and Economic ResearchSADC Southern Africa Development CommunitySOAS School for Oriental and African StudiesSPS Senior Policy SeminarSSA Sub-Saharan AfricaUNECA United Nations Economic Commission for AfricaUEMOA Union Economique et Monétaire Ouest Africaine

v

Acknowledgements

The African Economic Research Consortium is grateful to all whocontributed to the successful outcome of Senior Policy SeminarVII – and particularly those who participated in it. The researchers

and policy makers, whose commentary and open exchange of experiencewere central to the utility of the proceedings, deserve our special thanks.

AERC also acknowledges with thanks Dr. Matthew Martin, Directorof Development Finance International, Prof. Olu Ajakaiye, AERC ResearchDirector, and Dr. Joseph Karugia, Research Manager, for their role in theseminar preparations. AERC appreciates, as well, the work of MarjoryGichohi, Communications Manager, Charles Owino, PublicationsAdministrator, and Miriam Rahedi, Publications and CommunicationsAssistant, for their work in organizing the seminar. Winston Wachanga,Information Resources Administrator, worked on promotional materials,Florence Maina, Conference and Travel Coordinator, assisted withlogistics, and Margaret Crouch, publications consultant, edited anddesigned the report. To all of these and the many others who wereinvolved, AERC extends its sincere appreciation.

William LyakurwaAERC Executive Director

vi

1

*AERC convened its first Senior Policy Seminar in Nairobi in March 1995. The secondseminar met in Abidjan in November 1996 to address financial sector reform, while SPS III,in Accra in October 1997, discussed fiscal policy. Gaborone was the setting for SPS IV, inFebruary 2000, which analysed budget revenue mobilization in sub-Saharan Africa.

Senior Policy Seminar VII was the third such event to take up the issueof poverty in sub-Saharan Africa – responding to a most elusive goalof African policy makers. The fifth and sixth seminars (Dar es Salaam,

Tanzania, 2003, and Kampala, Uganda, 2004) considered, in turn, themeasures Africa must take to promote pro-poor growth, and how tomobilize the necessary resources for financing pro-poor strategies.*

The policy dilemma is that despite the economic growth andmacroeconomic stability realized over the last decade, there is as yet noanswer to pervasive poverty, nor is there sustained progress towardsmeeting the Millennium Development Goals. The majority of the Africanpeople continue to live under appalling conditions of suffering. What isgoing wrong, is the question policy makers ask.

One critical but often overlooked element of poverty reductionstrategies is the role of institutions. Thus the Seventh Senior PolicySeminar responded to policy concerns by exploring how institutions canhelp make economic growth pro-poor. The seminar convened in CapeTown, South Africa, on 22–24 March 2005. Thirty-three policy makers andresearchers from 18 countries attended. Seminar discussions covered severalkey themes:• Growth and poverty reduction: Do institutions provide the missing link?• Growth, income inequality and poverty in Africa• Governance, power diffusion and pro-poor growth policies• Human capital investment, growth and poverty reduction in Africa• Institutions and policies for pro-poor integration into the globaleconomy

• Regional and gender dimensions of poverty reduction strategies• Agriculture, labour markets and pro-poor growth• The role of the financial sector in securing pro-poor growth

Poverty – A Policy DilemmaPoverty – A Policy Dilemma

Poverty – A Policy DilemmaPoverty – A Policy Dilemma

Poverty – A Policy Dilemma

Poverty – A Policy DilemmaPoverty – A Policy Dilemma

2

These themes provided a basis for exchanging information on the linkbetween poverty reduction and institutions, identifying the role that pro-poor institutions should play in pro-poor growth, and defining areas forfurther joint research by policy makers and researchers.

Setting the Agenda

Chair: SEM Senturel N’goma Madoungou, Ministère del’Economie et des Finances, du Budget et de laPrivatisation, Gabon

Introductions: ParticipantsWelcome: William Lyakurwa, Executive Director, AERCOpening address: Bethuel Setai, Member of the Board, National Institute

of Economic Policy, South AfricaVote of thanks: Olu Ajakaiye, Director of Research, AERC

AERC Executive Director William Lyakurwa launched the seminarwith an overview of AERC’s mandate and current activities. Heexplained that AERC’s link with economic policy making is

integral to the research work and that senior policy seminars are animportant way of strengthening that link. Citing the high calibre of policymaking professionals who have participated in the seminars in the past, hesaid this has heightened the potential for impact on the policy process.

Poverty in Africa has been a recurring thread in AERC researchactivities, Professor Lyakurwa noted, not just in senior policy seminars, asit threatens to become an intractable obstacle to progress. To reducepoverty, policy makers must focus on creating a policy environment that

promotes pro-poor growth, using mechanisms targetedspecifically at assisting the poor to escape their unenviablecondition. Thus Senior Policy Seminar VII aimed to shedadditional light on aspects of poverty reduction policies.

In the official opening address, Bethuel Setai termed thetheme of the seminar, “Growth, Poverty and Institutions”, asrelevant to all developing countries. Leaders across theAfrican continent in particular are grappling with thequestion of how to eradicate poverty and spur economicgrowth, he said, so as to alleviate the pervasive anddisheartening suffering among their people, and toredistribute wealth equitably. Reducing poverty, ensuringthat all people have adequate food, shelter, education andaccess to basic social amenities, is of utmost importance to

Senior PolicySeminarsprovide aforum forfeedback frompolicy makerson theA E R Cresearchagenda.

3

African policy makers.Since macroeconomic stability has not been able to end

poverty, Professor Setai pointed out, we need a betterunderstanding of the way institutions promote – or hinder –poverty eradication efforts. We must thoroughly explore therole of institutions – how they link growth and povertyreduction, how they work, and what needs to be done toensure they function effectively. If African poverty is todecline in a timely way, we need to build the capacity ofAfrican institutions to ensure participation by all sectors ofsociety, including the poor themselves. The biggest challengeis finding the appropriate institutional framework foraccomplishing this aim. By sharing information andexperiences among researchers and policy makers, he said hehoped the seminar would produce recommendations forlasting solutions to poverty reduction and sustained growthin Africa.

Matthew Martin then briefly reviewed the seminar issues.He cited recent initiatives such as the New Partnership forAfrica’s Development (NEPAD) and the Commission forAfrica, as well as analyses by the Bretton Woods Institutions,that have stressed the essential role of strong institutions in good policymaking. There is also an international consensus that growth alone is notenough for poverty reduction – that it must be specifically designed to bepro-poor. Yet there has so far been little analysis of how to make sure thatinstitutions execute pro-poor growth policies. The analyses presented inthis seminar were therefore a key attempt to fill this gap.

International literature on the sources of growth – especially pro-poorgrowth – is thin, Dr. Martin said, making itdifficult for governments to analyse these issuessufficiently in their development and povertyreduction strategies. But he pointed out thatAfrican researchers and policy makers have richexperiences to share. That is why the seminaraddresses four key sets of issues relevant toAfrica: how institutions assist growth, how theyensure that growth is pro-poor, policies for pro-poor growth and policies for sustainabledevelopment. Underlying all of these is theeffect of governance on pro-poor growth andhow to make growth pro-poor by enhancing thepower of the poor.

The emphasison growth meansthat it is the onlythinggovernmentsencourage. Weneed to take adeep breath andevaluate whatpeople areactually doing.

We need tounderstand howinstitutionspromote orhinder povertyeradicationefforts – howthey link growthand povertyreduction, howthey work, andwhat needs tobe done toensure theyfunctioneffectively.

4

Growth and Poverty Reduction:Do Institutions Provide theMissing Link?Chair: Caleb Fundanga, Governor, Bank of ZambiaPresenter: Ali A.G. Ali, Economic Adviser, Arab Planning Institute

Ali A.G. Ali examined whether institutions can provide the “missinglink” between growth and poverty reduction, considering thatNEPAD has singled out institutional improvement as the

prerequisite for development. He concluded that sub-Saharan Africa suffersfrom below average – but considerably improving – institutions, and thatthe state of these institutions does help explain poor growth performance.

The ability of institutions to explain poverty levels is muchlower, however, and the channels of transmission are veryunclear. This is essentially because growth and povertyreduction are not closely correlated.

He posited that NEPAD and other examinations havenot focused enough on rural poverty and the ruralinstitutions that explain such poverty. More research needsto be done on how institutions can transform growth intopoverty reduction; key rural institutions and how theydevelop over time; and how to design rural safety nets.

In the ensuing discussion, participants expressed thedesire to understand what kind of institutions should becreated to eradicate poverty. There were three key debates:• Whether the crucial factor is having a clear formal mandate forinstitutions and executing it conscientiously, or whether the quality ofgovernance is more fundamental, regardless of institutional recipes.

Participants concluded that both were important, and mutuallyreinforcing, but that clear mandates were vital.

Institutions are defined as “the rules of the game” in a society.More formally, institutions include any form of constraintimposed by human beings to shape human interaction. Theseconstraints could be formal (such as the rules devised byhuman beings) or informal (such as conventions or codes orcustoms). Institutions affect the performance of the economyby their effect on the costs of exchange and production.

Institutions asconventionallymeasured are notlikely to have amajor impact onpovertyreduction: weneed to lookmore closely atrural institutionsand safety nets.

5

• Whether formal or informal institutions are more important. Manyfelt that informal institutions provide a betterunderstanding of how poor people gain access toresources, build their assets and manage risk. Especiallyin rural areas, small-scale informal institutions needstrengthening for full autonomy and empowerment of thepoor.

• Whether we should be discussing government institutions or theinstitutional structure of markets. Both were held to be keyfactors in deciding prospects for pro-poor growth.

Participants also identified several important areas forfurther investigation, including:• The institutional elasticity of poverty and its role in transmitting growthto the poor.

• Roles, incentives and choices of the poor in the evolution of institutionsover time.

• The legacy of colonialism and post-colonial regimes in entrenching badinstitutions.

• That NEPAD has not addressed the role of rural andtraditional institutions in supporting or restrictingpoverty reduction in the rural areas.

• How political instability weakens institutions andundermines pro-poor policies.

• Decentralization, which is needed to enhanceparticipation by the poor in both rural and urban areas.

• Roles of rural/traditional institutions in enhancing or restricting growthand access to assets and resources by the poorest.

Growth, Income Inequality andPoverty in AfricaChair: Caleb Fundanga, Governor, Bank of ZambiaPresenter: Gary Milante (co-author with Ibrahim Elbadawi), Project

Administrator, Development Economics Research Group,The World Bank

Discussants: Monica Aoko, Deputy Chief Economist, Ministry of Finance,KenyaIbrahima Dia, Expert socioeconomist, Ministère del’Economie et des Finances, Senegal

Post-colonialsystems did notreform what theyinherited from thecolonial powers.This is why ourinstitutions are soweak so manyyears afterindependence.

Just because itis customary,does not meanthat it is archaic.

6

Beginning by outlining the interactions among growth,poverty and inequality, Gary Milante reiteratedthat growth does not have an automatic impact on

poverty. Instead, the importance of inequality as a variablewithin the growth–poverty relationship requires closerattention. He stressed that high levels of inequality canresult in rates of growth that are unsustainable.

Following a review of the main literature on the subject,he then turned to the policy implications arising from ananalysis of 47 developing countries, including 19 in sub-Saharan Africa. Political economy constraints, he said, meanthat policies to counter inequality are most feasible whenthe problem is tackled indirectly.

Specifically, policies that increase political access andopportunities as well as strengthen access to credit markets, education andbetter health care were among the measures discussed. Further areas ofpolicy action relating to addressing inequality were strategies to insure thevulnerable against external shocks and to improve access to infrastructure.In sum, policies that increase opportunities for the disadvantaged are mostlikely to be successful in ensuring that growth reaches the poorest.

The seminar participants generally agreedthat there has been far too little focus andliterature on the issues of inequality andredistribution. Yet growth without significantredistribution does not reduce inequality. Evenwhere the issue of inequality is addressed, this hastended to focus on inequality of income, ratherthan its other aspects, such as gender or regional

isolation. They observed thatinequality of all types can create avicious cycle of actually reducinggrowth because inequality and exclusion can lead to socialdisturbances and political instability.

Participants urgently requested much more positively-focused and country-specific analysis of how reducinginequality could contribute to sustained growth and povertyalleviation. Such analysis should take into account differingaccess to political power, social structures and socialinclusion/exclusion, and inequality of access to assets (suchas credit and land). It should also turn a spotlight on basicneeds (such as education, health care and water) andinfrastructure (such as roads, energy, markets andcommunications), the role of external shocks (such asexports or foreign direct investment) in exacerbatinginequality, and the effects of social protection.

Policies thatdo notaccount forissues ofinequality arenot likely tobe successfulin reducingpoverty.

Improvement inthe livingstandards of thepoor is anequity issue –the transfer ofresources fromthe wealthy tothe poor, interms of powerdiffusion anddecision making.

Powerdiffusion iscentral to aharmoniousnation.

7

Governance, Power Diffusionand Pro-Poor Growth Policies

Chair: Speciose Baransata, 1ère Vice-Gouverneur, Banque de laRepublique du Burundi

Presenter: Mwangi S. Kimenyi, Professor, Department of Economics,University of Connecticut, USA

Discussant: Mthuli Ncube, Professor, Wits Business School, Universityof Witwatersrand, South Africa

Mwangi Kimenyi started from the established premise that growthis a necessary but not sufficient condition for poverty reduction,and that human development effort is more fundamental than

income levels. He then advanced a basic thesis that pro-poor policies aremore likely to be implemented – and sustained– in those institutions where power is diffusedsufficiently to give the poor leverage over policyoutcomes. Country failure to adopt pro-poorpolicies reflects concentration of power in thehands of the wealthy – a situation that he sayscould be described as “stationary banditry”.

It is therefore vital to reform institutions toenhance and entrench power

diffusion, he said. Such measures include strengtheningdemocratization, building up institutions that fightcorruption and increase transparency, and bringinggovernment closer to the people through decentralization.Diffusion of power also needs to be applied to the availabilityof basic needs and assets – including the power to gain accessto services, land, infrastructure and financing. More researchis needed into how to enhance power diffusion in Africa.

Participants agreed that power diffusion (especiallyamong different economic groups and regions) is central to aharmonious nation and therefore to long-term growth anddevelopment. Power concentration had sometimes been seenas more efficient, but in the longer term had inevitably led tocorruption, capital flight and political instability. Powerdiffusion supports poverty reduction by giving the poor alouder voice, especially through participatory democracy anddecentralization.

The key issue is whether there is a minimum thresholdlevel of income in a country above which the poor will

Power diffusionoccurs onlywhere manygroups form,each with somesubstantialbargainingpower, thuspreventing thedomination byone or a fewgroups thatcould otherwisecapture thepolitical power.

Growth withpower diffusionis the key topovertyreduction.

8

naturally gain a voice. In the developed countries, powersharing evolved over many years, with power and voice beingdiffused as poorer groups organized themselves on the basisof education, health and higher income, and then changedgovernments and market institutions as a result. Currentlyin some African countries, “pro-poor” institutions toencourage participation are being created without theseprerequisites being in place. This raises questions as to thesustainability of the institutions and their potential forfacilitating the long-term impact of the poor on developmentpolicy decisions.

In addition, the policy makers suggested that more workshould be done to determine exactly which institutions hadproven to be more effective in reducing inequality andpoverty and achieving redistribution.

Human Capital Investment,Growth and Poverty Reduction

Chair: Mbita Chitala, Deputy Minister of Finance and NationalPlanning, Ministry of Finance and National Planning,Zambia

Presenter: Germano Mwabu, Chair, Department of Economics,University of Nairobi, Kenya

Alivelihood-based framework was Germano Mwabu’s perspectivefor understanding the determinants and consequences of poverty.Lack of assets, low yields to household endowments, risks and

exogenous shocks, and ineffective institutions are the main causes ofpoverty, he reported. The institutional environment and humancapital of households are the key to reducing poverty.

Because most people in Africa are involved in agriculture,this should be the main arena for poverty reduction efforts.Moreover, evidence from household surveys indicates there is ahuge marginal income return to higher levels of education, so weshould be focusing on education way beyond primary level.Education should include attention to agriculturaltransformation, as well as health issues. Improved health statuscan also improve productivity and the capacity to absorbtechnology. It is crucial to involve the poor in the design,management and financing of development projects through

We must focuson educationway beyondprimary level,because thisdramaticallyincreases theincome of thepoor.

What literacymodels do weuse forAfricansocieties whocan read andwrite in theirown languages,but not inEnglish orEuropeanlanguages?

9

decentralization, and to provide a macroeconomic and governanceframework that ensures a favourable investment climate, which can in turnuse the human capital created productively through employment, as wellas generating fiscal revenue to finance more spending on human capital.

Participants urged closer attention to issues of how human capitalchanges access to agricultural assets, especially animals, land and credit, aswell as to inputs such as fertilizer and seeds. They also called for analysis ofthe needs of the adult poor in both urban and rural areas and of howtailored technical training – including agricultural extension services –could help them to improve employment and income. They said it is vital tohave a closer link between household or regional analyses and themacroeconomic overview, to ensure that overall economic policy enhancesgrowth for the whole economy, beyond regional and household levels. Thiswould allow policy makers to draw clearer policy implications for how toassist the poor to diversify activities and reduce risk. Finally, they said it isimportant to distinguish more closely sources of finance for different levelsof human capital formation. For example, as there are higher privatereturns to higher education, people or enterprises should be encouraged topay for education at this level. On the other hand, high social returns toprimary education mean that government should remove user fees –particularly since primary education is also regarded as a human right.

Institutions and the Design ofPro-Poor Globalization Policies

Chair: Mbita Chitala, Deputy Minister of Financeand National Planning, Ministry of Financeand National Planning, Zambia

Presenter: Machiko Nissanke, Professor of Economics,School of Oriental and African Studies(SOAS), University of London, UnitedKingdom

Discussants: Bethuel Setai, Member of the Board, NationalInstitute of Economic Policy, South AfricaFelina Chongola, Chief Economist, Ministryof Finance and National Planning, Zambia

Machiko Nissanke underlined two pressingchallenges facing policy makers in Africa: how tointegrate their national economies into the world

economy, and how to ensure that this integration is pro-poor. She analysed the impact of globalization on the poor

Pro-poorintegration intothe globaleconomy mustbe strategicallydesigned toovercomeimbalances in thetechnologicalaccess andmarket power ofthe poor.

1 0

through the link between openness, growth and poverty reduction; andthrough other price, factor/market and technology effects. In this context,institutions are vital to how globalization affects the poor.

Professor Nissanke cited three types of policy and institutionalmeasures that can enhance the pro-poor effect of African integration into

the global economy: designing a pro-poor strategy forintegration; transforming economic and market structures toensure that the poor can access and benefit from the globaleconomy; and transforming and innovating institutions toensure that the poor have the power and information tobenefit. She detailed ideas for each of these steps, butstressed that the exact design of pro-poor globalization mustbe country-specific, linked to national conditions andinstitutions.

The discussion centred on how global technologies andinformation flows could help the poor – and how the poor could haveaccess to them. In particular participants considered:• How Africa could compete, given the global trend to product branding,by exploiting niche markets and improving linkages with marketing anddistribution networks.

• Africa’s role in the global trend to outsourcing, especially ofmanufacturing and services.

• The role of trade access and increased value-added in enlarging Africa’strade share.

• How African governments can undertake strategic planning to identifyopportunities, using government institutions to provide incentives forentrepreneurs as in Asia.

Another focus of the debate was how redistribution policies could bemade to work at regional and global levels. Further analysis was urged todetermine:• How regional integration arrangements in Africa and other continents(e.g., Europe) had overcome income inequalities between and withincountries to ensure that all benefited fromintegration.

• How global institutions should be reformedto regulate globalization and provide greatervoice to poorer countries and people.

Finally, participants reiterated thatinequality within and between countries affectsgrowth and globalization, reducing global demand for goods and services,and potentially eroding the political, social and environmentalsustainability of globalization itself.

Africa is losingout in globaliza-tion because itsells facelessgoods with nobrand names.

If agriculturewere supported,health wouldimprove.

1 1

Institutions to OvercomeRegional and GenderDimensions of Poverty

Chair: Saïdou Djibo, Secrétariat Permanent du DSRPCharge des questions macroéconomiques,Cabinet du Premier Ministre, Niger

Presenter: Abdul G. Garba (for Kassey Garba), SeniorLecturer and Head, Department of Economics,Ahmadu Bello University, Nigeria

Discussants: Elias Masilela, Acting Deputy Director-General, National Treasury, South AfricaBabangida Aliyu, Permanent Secretary, National PlanningCommission, Nigeria

Poverty is a by-product of national economic, political and socialprocesses, Dr. Garba said, which are in turn determined by powerrelations between the genders and across regions within countries.

The poverty wrought by the marginalization of women and regions is ahumanly created problem, reflecting existing institutions, and must be

addressed by changing those institutions. Sub-Saharan Africa lags behind other regions ingender and regional imbalances, and Nigeriashows particularly high gender and regionaldisparities, notably in lower levels ofemployment and education.

Overcoming gender and regional poverty willrequire much more detailed analysis of

imbalances in access to employment opportunities, physical assets such asland, and credit and capital. It also requires a deeper understanding of thegender dynamics at work in rural development infrastructure, small-scalerural markets, human capital formation, sustainable use of naturalresources and safety nets for vulnerable groups. With such a background itshould be possible to counter the low participation of women and poorerregions in the design of development strategies. International, national,urban and rural institutions (and even households) discriminate againstpoor people in different ways, because of different incentives, choices andcircumstances. Each level of institution therefore requires different actionto change its behaviour.

The discussion proposed further work to focus more closely on what

Investment inhuman capital isthe surest wayto improvehuman life.

The averagepoverty levelmasks importantregional andgenderdifferences thatare critical tounderstandingthe institutionsthat generatepoverty.

1 2

types of institutions and policies could overcome regional or genderdimensions of poverty. This would need deeper analysis of:• The determinants and nature of regional and gender related inequalityand poverty, both of income and of other aspects (assets, capacity, andbasic needs), and of their effects on economic performance.

• Case studies of institutions in Africa and other developing countriesthat have been successful in promoting greater regional and genderequality.

• Whether rural and urban settings require different institutions.• How the poor (especially specific targeted vulnerable groups) haveempowered themselves to participate in and run such institutions.

Agriculture, Labour Marketsand Pro-Poor GrowthChair: Margaret Kakande, Head, Poverty Monitoring and Analysis

Unit, Ministry of Finance, Planning and EconomicDevelopment, Uganda

Presenter: Ade Olomola, Research Professor, Agriculture and RuralDevelopment Department, Nigerian Institute of Social andEconomic Research (NISER), Nigeria

Discussant: Tebogo Keseabetswe, Principal Policy Analyst, Ministry ofFinance and Development Planning, Botswana

Agriculture is the key sector in most African economies, Ade Olomolareported, but its growth has been dismal for nearly three decades.Poverty reduction strategy papers (PRSPs) often stress the key role

of agriculture, but fail to present clear strategies for accelerating itsgrowth. Among other aspects, it is necessary to analyse how to enhance

food self-sufficiency, diversify into secondary and tertiaryagricultural production and non-farm activities, and increasecommercial orientation. Infrastructure, human capital, urbanmarket development, technology improvement, andprotection against risks and exogenous shocks are essentialcomplements. International experience shows thatagricultural growth is also a prerequisite for wider growth.

An understanding of labour market earnings is essentialto rural poverty reduction efforts, according to ProfessorOlomola. This includes diversification of earnings betweenfarm and non-farm sources – but creating such employmentopportunities requires overcoming remoteness, building

The majority ofour rural peopleare in small-scaleagriculture, anddo not haveappropriatefarmingtechnology.

1 3

access to assets, promoting smaller family structures, andreducing ethnic and gender discrimination.

Employment is a prerequisite for social inclusion andempowerment, and therefore for sustainable povertyreduction. Yet recent trends have seen reduced formalemployment, alongside increased landlessness, casual/seasonalemployment and child labour. If Africa is to overcome risingrural and urban un/under-employment, it must improveproductivity and technology levels in rural income generation,as well as prospects for higher returns on education and healthinvestments for children. Professor Olomola concluded byidentifying key measures relating to institutions andtechnology; finance, labour and markets; and agriculturalpolicy. He also suggested research into non-farm ruralactivities and reinvestment of profits from these intoagriculture and rural areas.

The three main aspects of the ensuing discussion were:• The need for much more multidisciplinary work to resolve the problemsidentified in the presentation. In particular, economists should workwith engineers and agronomists to innovate technology that canincrease agricultural production through research, and to analyse itspotential impact on growth, inequality and poverty reduction.

• The need not to ignore bottom-up development and appropriate low-cost technology that is more easily accessible by the poor.

• The role of government – whether it should concentrate on providing anenvironment friendly to agricultural markets, or (as suggested by most)play a much more active role through extension services, irrigationschemes and encouragement of high value commodities.

The Role of the FinancialSector in Pro-PoorGrowth

Chair: Sadikiel Kimaro, Personal Assistant to thePresident (Economic Affairs) President’sOffice, State House, Tanzania

Presenter: Ernest Aryeetey, Director, Institute ofStatistical, Scientific and Economic Research(ISSER), University of Ghana, Legon, Ghana

Discussant: Njuguna Ndung’u, Director of Training,AERC

If children missthe opportunityto go to schooltheir chance forbetter incomewill be lost, evenas theircontribution insmall-scaleagricultureremainsinsignificant dueto technologicalshortcomings.

One of thereasons for thelack of progressin agriculture inAfrica isbecause it iseverybody’s“business” evenwhen they areengaged in otheractivities.

1 4

Recent literature has proven the linkage betweenfinancial development and growth, according toErnest Aryeetey, who looked at how Africa’s formal,

semi-formal (micro) and informal financial systems affect thepoor. The formal financial sector, in spite of high expectations,has been inefficient, illiquid and thin, Professor Aryeetey said,resulting in high interest rates, low domestic savings andinvestment, and little impact on poverty reduction. Micro-finance has tried to fill the gap in financing for the poor, andhas contributed immensely to increasing incomes and assets,nutrition, education, and health, and to reducing vulnerabilityto crises. He detailed the best practices in the design of micro-finance institutions, but also underlined the remainingdifficulties in management, often caused by unstable

macroeconomic conditions. Informal institutions overcome problems oflack of collateral or financial liquidity and are therefore also helpful to thepoor, but they are limited in scale and charge high interest.

As a result, he said, it is vital to establish inter-linkages among differentinstitutions so as to encourage the poor to access formal and micro-financing. He suggested many measures to achieve this, including changingthe institutions themselves: leaner structures, accountability andincentives for operational efficiency, streamlined operations, andoutsourcing and networking. He concluded by focusing on broader policymeasures to ensure pro-poor financial sectors. Among these aremacroeconomic stability, regulation and supervision of financialinstitutions, and the creation of specialized institutions and creditinformation structures. Besides these, he said it is necessary to strengthenproperty rights and enhance micro-finance institutions.

Subsequent discussion agreed that financial sectorreforms had done little to reduce poverty. Like the presenter,the participants made many suggestions for pro-poormeasures for the financial sector:• Focusing on “markets of the poor”, by encouraging banks

and other market players to develop products for thepoor, especially in rural areas, perhaps throughcommodity-based savings and credit rather than cashloans.

• Improving information on financial issues, institutionsand products for the poor.

• Widening the capacity of African stock exchanges toreach smaller companies through over the countermarkets and decentralization.

• Increasing access of women and other vulnerable groups,as well as far-flung regions, to credit.

Financialservices toenable the poorto engage inincomegeneratingactivities arecritical topovertyalleviation.

“Front door”credit – thebanks – is notused by poorpeople. This is achallenge topolicy makers. Ifthere are noincentives for thebanks to help thepoor, how will thefront door beopened?

1 5

• Increasing tailored training in business and financialplanning for the poor, so as to improve financial savings levels and creditrepayment records.

• Conducting further analysis of benefits and risks, and identifying bestpractices in micro-finance, to encourage a dramatic scaling up of suchfinance.

• Ensuring access to reasonably priced finance to smooth consumptionamong the poor, so they can avoid commercially-based moneylending,which increases their high-interest debts.

Priorities for New Research

Following the plenary discussion, the participants divided into fourgroups representing Southern Africa, Francophone Africa, EasternAfrica and West Africa. These groups produced a wide array of

suggestions for priority areas and issues for analysis and research.

Further Analysis and Research Topics

Overall, across the range of subject areas examined in theseminar, policy makers identified their priorities for furtherpolicy-focused analysis and research. Governance, power andpro-poor growth (session 3), and pro-poor integration intothe global economy (session 5) were at the top of the list.Secondary priorities were institutions to fight regional andgender poverty (session 6); agriculture and labour markets(session 7); and overall identification and reinforcement ofpro-poor institutions (session 1). These were followed by pro-poor financial sector institutions (session 8) and institutionsfor human capital development (session 4), with leastemphasis given to inequality (session 2).

Priorities changed somewhat when participants wereasked to identify key individual subjects for research. Herethe following specific topics were most important:• Design of traditional and new rural and urban institutionsto reinforce pro-poor policy.

• Decentralization of power/fiscal policy and promotion of participatorydemocracy.

• Design of national strategies for pro-poor globalization that link thepoor to global markets – based on comparative advantage, technologyand information flows.

• Design of pro-poor financial sector institutions and instruments.

Well focusedpro-poorfinancial sectordevelopmentmeasures shouldtake greaterpriority in thedesign ofprogrammes forthe sector,rather than suchissues asinflationreduction andsingle currencies.

1 6

Other key issues were felt to be:• Pro-poor societal groupings and interestgroups.

• Power diffusion, redistribution and theirimpact on social/political stability.

• Identification of national-level priorities andstrategies for human capital formation.

• Interrelationships between human capitalformation and wider poverty reduction efforts(access to assets such as land, finance andinfrastructure; inequality and distribution).

• The effects of regional integration and South–South interaction on poverty reduction.

• Reform of international institutions to enhance their role in pro-poorgrowth.

• The role of public expenditure in overcoming regional and genderpoverty.

• Protecting the poor against shocks (including through agriculturalinsurance).

Some issues were particularly important to specific regional groups.The group from Southern Africa, for example, was especially concernedabout rural safety nets and food security/self-sufficiency. The francophone

participants expressed the need for measures to reduceinequality of income and of access to basic services and assets,the role of corruption in concentrating power and income, andurban–rural imbalances. Those from anglophone West Africacalled for more attention to the impact of inequality onpolitical and social stability, and how to reduce high interestrates to combat poverty. Finally, the East Africans cited theeffects of regional and gender poverty on overall growth andpoverty reduction, and policies for transforming agriculture toreduce poverty.

The key priority after this seminar is to analyse bestpractices in designing pro-poor institutions and to look atindividual country needs.

Follow-Up Mechanisms and Processes

The four groups were also asked to identify the best mechanisms forfollowing up the analysis and research presented at the seminar. Theyasked for:• Future research that:

– Focused much more on case studies and practical examples of bestpractices.

– Was much more tailored to key current priorities for policy makers,

The key priorityafter this seminaris to analyse bestpractices indesigning pro-poor institutionsand to look atindividual countryneeds.

Pro-poorgrowth shouldbe employmentfocused andbased on anappropriatestrategy ofagro-industrialization.

1 7

involving them before the seminar in setting the key issues throughadvisory structures.

• Increased institutional links between researchers and policy makersthrough joint country-specific research and application of resultingpolicy recommendations.

• Short, focused training sessions at the national level to teach policymaking technicians and researchers how to apply analytical lessons tothe design of national poverty reduction strategies.

• Study visits for policy makers and researchers to examine more closelysuccessful examples of pro-poor institutions.

• Strengthening of the analytical capacity of civil society toenhance the participation of the poor in decisions on theconstruction of pro-poor institutions and design of pro-poor policies.

• Closer networking by AERC with other African regionalinstitutions (African Union, African Development Bank,NEPAD, United Nations Economic Commission forAfrica) and sub-regional institutions (CommunautéEconomique et Monétaire d’Afrique Centrale – CEMAC;East African Community, Southern Africa DevelopmentCommunity – SADC; Union Economique et MonétaireOuest Africaine – UEMOA).

• Establishment of a network and/or of online discussion groups amongseminar participants with posting of key papers on websites.

• Partnership with non-African institutions doing similar research toenhance quality.

• Greater exchanges of personnel and experiences between governmentand research institutions through internships and secondments.

• Fuller participation by African countries in funding and designingAERC projects.

The Way ForwardChair: Olu Ajakaiye, Director of Research, AERCClosingremarks: William Lyakurwa, Executive Director, AERC

The seminar was only a start to discussions of how to reduce povertyby improving institutions for pro-poor growth, Professor Ajakaiyetold participants. The priority is to increase the interaction between

researchers and policy makers, so that they can jointly produce researchthat is both methodologically sound and designed to be able to answer

Civil societycapacity toanalyse issuesshould bestrengthened soas to enhancethe participationof the poor inpolicyprocesses.

1 8

current policy questions. As participants agreed, this needsto be done through the identification of best practices andthe development of case studies in creating pro-poorinstitutions to promote growth and reduce inequality.

In his closing remarks, Professor Lyakurwa thanked allparticipants for the lively contributions to the discussions.He said the report of the seminar would be available on thewebsite and in hard copy as soon as possible, and added thatfuture Senior Policy Seminars will address the hot topics the

group had identified. Governor Fundanga said the challenge was to applywhat everyone had learned to improve performance in each country, bymarrying theory with practice in making policy. He urged AERC to try toincrease participation by government ministers in future senior policyseminars. Minister Madoungou noted that many people in francophoneAfrica do not know much about AERC or its senior policy seminars, but hepraised their high quality policy relevance and said that the application ofthe knowledge through national action plans could have a fundamentalimpact on poverty reduction in Africa.

Africancountries shouldparticipate morefully in fundingand designingAERC projects.

1 9

“Growth, Poverty and Institutions: Is There a Missing Link?”, by Prof. Ali.G. Ali, Economic Advisor, Arab Planning Institute, Kuwait

“Growth, Income Inequality and Poverty in Africa”, by Prof. IbrahimElbadawi, Lead Economist and Manager, Regional Programme forEnterprise Development, and Gary Milante, Project Administrator,Development Economics Research Group, The World Bank, WashingtonD.C., USA

“Institutions of Governance, Power Diffusion and Pro-Poor GrowthPolicies”, by Prof. Mwangi Kimenyi, University of Connecticut, USA

“Human Capital Investment, Growth and Poverty Reduction in Sub-Saharan Africa”, by Prof. Germano Mwabu, Head, Department ofEconomics, University of Nairobi, Kenya

“Institutions and Policies for Pro-Poor Integration into the GlobalEconomy: A Perspective for Sub-Saharan Africa”, by Prof. MachikoNissanke, School of Oriental and African Studies (SOAS), University ofLondon, UK

“Agriculture, Labour Markets and Pro-Poor Growth”, by Prof. AdeOlomola, Agriculture and Rural Development Department, NigerianInstitute for Social and Economic Research (NISER), Ibadan, Nigeria

“Regional and Gender Dimensions of Poverty in Sub-Saharan Africa:Implications for Poverty Reduction Strategies”, by Dr. P. Kassey Garba,Senior Lecturer, Department of Economics, University of Ibadan, Nigeria

“The Role of the Financial Sector in Securing Pro-Poor Growth”, by Prof.Ernest Aryeetey, Director, Institute for Statistical, Scientific and EconomicResearch (ISSER), Ghana

Annex AList of Seminar Papers

2 0

Botswana

1. Ms. Tebogo KeseabetswePrincipal Policy AnalystMinistry of Finance andDevelopmentPlanningPrivate Bag 008Gaborone, BotswanaTel: (267) 3950 366Fax: (267) 3900 763Email: tkeseabetswe@gov.bw

Burundi

2. Mr. Alain HatungimanaTechnical Advisor to CabinetMinistry of FinanceBP 1830Bujumbura, BurundiTel: + 257 22 2775 / 964957Fax: + 257 22 3827Email: halain3@yahoo.fr

3. Ms. Speciose Baransata1ère Vice-GouverneurBanque de la République duBurundiAvenue du GouvernementBP 705Bujumbura, BurundiTel: 257 22 27 63Fax: 257 22 31 28Telex 507-5072Email: spes.baransata@brb.bi;barspes@yahoo.fr

Annex BSeminar Participants

Comoros

4. Mr. Ibrahim Mohamed SouleConseiller TechniqueMinistère des Finances, du BudgetBP 324Union des ComoresMoroni, ComoresTel : + 269 74 41 64Cell : + 269 732 140Fax: + 269 74 41 40Email: ibrahimsoule@snpt.kmibrahimsoule@hotmail.com

Gabon

5. SEM Senturel N’goma MadoungouMinistère de l’Economie desFinances et du BudgetMinistre de FinanceBP 165Libreville, GabonTel: + 241 79 50 03Fax: + 241 79 57 05Email: margerie13@yahoo.froganismira@yahoo.fr

The Gambia

6. Mr. Yusupha F.J. DibbaProg. Officer/Social Dev. &Decentralization CoordinatingOfficeDepartment of State for FinanceWomen’s Bureau Complex14/15 Marina Parade

2 1

Banjul, The GambiaTel: +220 -4 22 6204Fax: +220 -4 22 79 54/ 8398

Kenya

7. Ms. Monica AokoDeputy Chief EconomistMinistry of FinancePO Box 30007Treasury Building, 13th FloorNairobi, KenyaTel: + 254 020 220177Fax: +254 020 218475Email: maoko@treasury.go.ke

8. Mr. Joseline OgaiHead of Macroeconomic PlanningMinistry of Planning and NationalDevelopmentPO Box 30005Nairobi, KenyaTel: 254 020 251836Email: jsogai@treasury.go.ke

Lesotho

9. Mr. Mamahao LeutaPrincipal Budget OfficerMinistry of Finance andDevelopment PlanningKingsway StreetPO Box 395Maseru 100, LesothoTel: 266 313491Fax: 266 310964Email: mamakhooal@yahoo.co.uk

Malawi

10. Mr. Ben BotoloDirectorMinistry of Economic Planning andDevelopmentCapital CityPO Box 30136Lilongwe 3, MalawiTel: +265 1 - 788 888Fax: +265 1 - 788 247Email: bbotolo2000@yahoo.com

Nigeria

11. Dr. M. Babangida AliyuPermanent SecretaryNational Planning CommissionOld CBN Building, Garki IIShehu Shagari WayAbuja, NigeriaTel: +234 9 23485158; 08033140161Fax: +234 9 5230056Email: talbanminna@yahoo.com

12. Mr. Olugbemi A.O. AgbolaDirector, Macroeconomic AnalysisNational Planning CommissionOld CBN Building, Garki IIShehu Shagari WayAbuja, NigeriaTel: +234 9 2901816Fax: +234 9 5230056Email : abelagbola@yahoo.com

Niger

13. Mr. Saïdou DjiboSecretariat Permanent du DSRPCharge des questionsmacroeconomiquesCabinet du Premier MinistreBP 893Niamey, NigerTel: +227 72 21 52Fax: +227 72 21 58Email: saidou-djibo@yahoo.fr

Senegal

14. Mr. Ibrahima DiaExpert socioeconomist(SPLP/MEF)Ministère de l’Economie et desFinancesImmeuble Peytavin, Rue Carde, 1eretage, Porte DDakar, SenegalTel: 221 889 21 66Email: ibradia@refer.sn

2 2

South Africa

15. Prof. Mthuli NcubeWits Business SchoolUniversity of Witwatersrand2 St. Davids Place, ParktownJohannesburg, South AfricaTel: 27 11 7173588Cell: 27 83 454 6597Fax: 27 11 643 62336Email: Ncube.M@wbs.ac.za

16. Prof. Bethuel SetaiManaging DirectorECI Africa ConsultingPO Box 409Wendywood, South AfricaTel: 27 11 8020015Fax: 27 11 6565642Email: beth.setai@eciafrica.com

17. Dr. Haroon BhoratDirectorDevelopment Policy Research Unit(DPRU)University of Cape TownRondebosch 7701Cape Town, South AfricaTel: 27 21 6505705Fax: 27 21 6505711Email:hbhorat@commerce.uct.ac.za

18. Mr. Elias MasilelaActing Deputy Director-GeneralNational Treasury120 Vermeulen StreetBag X115Pretoria 0001, South AfricaTel: 27 12 315 5455Fax: 27 12 325 1048Email:elias.masilela@treasury.gov.za

Swaziland

19. Ms. Sebenzile MotsaAssistant EconomistMinistry of Economic Planning andDevelopment

Macroeconomic UnitPO Box 602Mbabane H100, SwazilandTel: +268 404 3765/8Fax: +268 404 6697Email: smotsa1@yahoo.co.uk

Tanzania

20. Dr. Sadikiel KimaroPersonal Assistant to the President(Economic Affairs)President’s OfficeState HousePO Box 34577Dar es Salaam, TanzaniaTel: 255 744 695565Fax: 255 22 2133792Email: kimaros@pepau.co.tz

Uganda

21. Ms. Margaret KakandeHead, Poverty Monitoring andAnalysis UnitMinistry of Finance, Planning andEconomic DevelopmentSpeke RoadPO Box 8147Kampala, UgandaTel: +256 41 23 50 55Fax: +256 41 23 20 15Email:Margaret.Kakande@finance.go.ug

Zambia

22. Hon. Mbita ChitalaDeputy Minister of Finance andNational PlanningMinistry of Finance and NationalPlanningPO Box 50062Lusaka, ZambiaTel: +260 1 253388Fax: +260 1 250012Email: Mchitala@zamnet.zm

2 3

23. Ms. Felina ChongolaChief EconomistMinistry of Finance andNational PlanningPO Box 50062Lusaka, ZambiaTel: 260 1 253454Fax 260 1 2528827Email: chongolaf@yahoo.com

24. Dr. Caleb Mailoni FundangaGovernorBank of ZambiaPO Box 30080Lusaka 10101, ZambiaTel: 260 1 223307Cell: 260 97 857536Fax: 260 1 237040Email: cfundanga@boz.zm

Authors

25. Prof. Ernest AryeeteyDirectorISSER, University of GhanaPO Box LG 74Legon, GhanaTel: 233 21 512506Fax: 233 21 512504Email: aryeetey@ug.edu.gh

26. Prof. Ade OlomolaResearch ProfessorAgriculture and RuralDevelopmentNISERPMB 5, University Post OfficeIbadan, NigeriaTel: 234 0803-6132535Fax: 234 2 8101194Email: as_olomola@yahoo.com

27. Prof. Ali A. G. AliEconomic AdvisorArab Planning InstitutePO Box 5834Safat 13059State of KuwaitTel: 965 4843130, 4844061Fax: 965 4842935Email: aali@api.org.kw

28. Mr. Gary MilanteProject AdministratorDevelopment Economics ResearchGroupThe World Bank111 11th Street, NW, #609Washington, D.C., 20001 USATel: 202 842 43337Email: gmilante@worldbank.org

29. Prof. Machiko K. NissankeProfessor of EconomicsSOAS, University of LondonThornhaugh St., Russell SquareLondon WC1H 0XGUnited KingdomTel: 44 207 8984542Fax: 44 207 8984559Email: mn2@soas.ac.uk

30. Dr. Abdul Ganiyu GarbaSenior Lecturer and Head ofDepartment of EconomicsAhmadu Bello UniversityZaria, NigeriaTel: +234 803 7014346; 069 550774Email: kagarba@yahoo.comganigarba@hotmail.com

31. Prof. Mwangi S. KimenyiDepartment of EconomicsUniversity of ConnecticutMontieth HallStorrs, CT 06269 USATel: 860 486 3022Email: s.kimenyi@uconn.edu

32. Prof. Germano MwabuChair, Department of EconomicsUniversity of NairobiPO Box 30197Nairobi, KenyaTel: 254 020 2728080Email: mwabu@form-net.com

Consultant

33. Dr. Matthew H. MartinDirector, Development FinanceInternational/Debt ReliefInternational

2 4

151 Farringdon RoadLondon EC1R 3AF, UKTel: +44 207 278-0022Fax: +44 207 278-8622Email: matthew.martin@dri.org.uk

AERC Secretariat

Prof. William Lyakurwa, ExecutiveDirector

Prof. Olusanya Ajakaiye, Director ofResearch

Prof. Njuguna Ndung’u, Director ofTraining

Dr. Joseph Karugia, Research ManagerMarjory Gichohi, Communications

ManagerCharles Owino, Publications

Administrator

Miriam Rahedi, Publications andCommunications Assistant

Florence Maina, Conference and TravelCoordinator

Rachelle Siele, Secretary

African Economic ResearchConsortiumPO Box 62882 – City SquareNairobi 00200, KenyaTel: 254 020 273 4150/7Fax: 254 020 273 4170 / 2734173Email: exec.dir@aercafrica.org;

communications@aercafrica.org

www.aercafrica.org

2 5

Seventh AERC Senior Policy Seminar (SPS VII)GROWTH, POVERTY AND INSTITUTIONS

Cape Town, South Africa22–24 March 2005

Day 1: 22 March

08h30–09h30 Registration

09h30–10h30 OFFICIAL OPENING

Chair: SEM Senturel N’goma Madoungou, Ministère del’Economie et des Finances, du Budget et de laPrivatisation, Gabon

Introductions: Participants

Welcome: Prof. William Lyakurwa, Executive Director, AERC

Opening address: Prof. Bethuel Setai, National Institute of EconomicPolicy, South Africa

Vote of thanks Prof. Olu Ajakaiye, Director of Research, AERC

10h30–10h45 TEA/COFFEE BREAK

10h45–11h45 SEMINAR OBJECTIVES AND OVERVIEW

Presenter: Dr. Matthew Martin, Director, DevelopmentFinance International/Debt Relief International, UK

Annex CSeminar Programme

2 6

11h45–13h15 Session 1: GROWTH AND POVERTY REDUCTION: DOINSTITUTIONS PROVIDE THE MISSINGLINK?

Chair: Dr. Caleb Fundanga, Governor, Bank of Zambia

Presenter: Prof. Ali A.G. Ali, Economic Advisor, Arab PlanningInstitute, Kuwait

13h15–14h30 BUFFET LUNCH

14h30–16h00 Session 2: GROWTH, INCOME INEQUALITY ANDPOVERTY IN AFRICA

Chair: Dr. Caleb Fundanga, Governor, Bank of Zambia

Presenter: Gary Milante (co-author with Prof. IbrahimElbadawi), Project Administrator DevelopmentEconomics Research Group, The World Bank,Washington, D.C., USA

Discussants: Ms. Monica Aoko, Deputy Chief Economist,Ministry of Finance, KenyaMr. Ibrahima Dia, Expert Socioeconomiste a laCellule de Lutte Contre la Pauvrete, Ministère del’Economie et des Finances, Senegal

16h00–16h30 TEA/COFFEE BREAK

16h30–18h00 Session 3: INSTITUTIONS OF GOVERNANCE, POWERDIFFUSION AND PRO-POOR GROWTH ANDPOLICIES

Chair: Mme. Speciose Baransata, 1ère Vice-Gouverneur,Banque de la République du Burundi

Presenter: Prof. Mwangi Kimenyi, Department of Economics,University of Connecticut, USA

Discussant: Prof. Mthuli Ncube, Wits Business School, SouthAfrica

19h00 COCKTAIL/RECEPTION

2 7

Day 2: 23 March

09h00–10h30Session 4: HUMAN CAPITAL INVESTMENT, GROWTHAND POVERTY REDUCTION IN AFRICA

Chair: Hon. Mbita Chitala, Deputy Minister of Financeand National Planning, Zambia

Presenter: Prof. Germano Mwabu, Chair, Department ofEconomics, University of Nairobi, Kenya

10h30–11h00 TEA/COFFEE BREAK

11h00–12h30 Session 5: INSTITUTIONS AND POLICIES FOR PRO-POOR INTEGRATION INTO THE GLOBALECONOMY: A PERSPECTIVE FOR SUB-SAHARAN AFRICA

Chair: Hon. Mbita Chitala, Deputy Minister of Financeand National Planning, Zambia

Presenter: Prof. Machiko Nissanke, School of Oriental andAfrican Studies (SOAS), University of London, UK

Discussants: Prof. Bethuel Setai, National Institute of EconomicPolicy, South AfricaMs. Felina Chongola, Chief Economist, Ministry ofFinance and National Planning, Zambia

12h30–13h30 BUFFET LUNCH

13h30–15h00 Session 6: REGIONAL AND GENDER DIMENSIONS OFPOVERTY IN SUB-SAHARAN AFRICA ANDIMPLICATIONS FOR POVERTY REDUCTIONSTRATEGIES

Chair: Mr. Saïdou Djibo, Charge des questionsmacroeconomiques, Secretariat Permanent de laSRP, Cabinet du Première Ministre, Niger

Presenter: Dr. Abdul G. Garba, Senior Lecturer and Head ofDepartment of Economics, Ahmadu BelloUniversity, Nigeria, for Dr. P. Kassey Garba, SeniorLecturer, Department of Economics, University ofIbadan, Nigeria

Discussants: Mr. Elias Masilela, Deputy Director-General,National Treasury, Pretoria, South AfricaDr. M. Babangida Aliyu, Permanent Secretary,National Planning Commission, Abuja, Nigeria

2 8

15h00–15h15 TEA/COFFEE BREAK

15h15–16h45 Session 7: AGRICULTURE, LABOUR MARKETS ANDPRO-POOR GROWTH

Chair: Ms. Margaret Kakande, Head of Poverty Monitoringand Analysis Unit, Ministry of Finance, Planningand Economic Development, Uganda

Presenter: Prof. Ade Olomola, Agriculture and RuralDevelopment Department, Nigerian Institute ofSocial and Economic Research (NISER), Ibadan,Nigeria

Discussant: Mrs. Tebogo Keseabetswe, Principal Policy Analyst,Ministry of Finance and Development Planning,Botswana

16h45–18h15 Session 8: THE ROLE OF THE FINANCIAL SECTOR INSECURING PRO-POOR GROWTH

Chair: Dr. Sadikiel Kimaro, Personal Assistant to thePresident (Economic Affairs), Tanzania

Presenter: Prof. Ernest Aryeetey, Director, Institute ofStatistical, Scientific and Economic Research(ISSER), Ghana

Discussant: Prof. Njuguna Ndung’u, Director of Training, AERC

Day 3: 24 March

09h00–11h30 Session 9: WORKING GROUPSBriefing by: Dr. Matthew Martin, Director,Development Finance International/Debt ReliefInternational, UK

11h30–11h45 TEA/COFFEE BREAK

11h45–13h00 Session 10: PLENARY AND CLOSURE

Chair: Prof. Olu Ajakaiye, Director of Research, AERCClosing remarks: Prof. William Lyakurwa, Executive Director, AERC

19h30 CLOSING DINNER (Cape Town Waterfront)

African Economic Research ConsortiumConsortium pour la Recherche Economique en AfriquePO Box 62882 –City SquareNairobi 00200, KenyaMiddle East Bank Towers, 3rd Floor, Milimani RoadTel: (254-20) 273-4150Fax: (254-20) 273-4173

www.aercafrica.org

ISBN: 9966-944-70-2