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Published by Ronald Kumar
This paper is available freely from the inaugural edition of African Journal of Economic and Sustainable Development (AJESD)
This paper is available freely from the inaugural edition of African Journal of Economic and Sustainable Development (AJESD)

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Published by: Ronald Kumar on Apr 05, 2012
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 African J. Economic and Sustainable Development, Vol. 1, No. 1, 2012
27 
Copyright © 2012 Inderscience Enterprises Ltd.
Exploring sectoral elasticity vis-à-vis per worker income with a focus to agriculture: a study of Sub-Saharan Africa
Ronald Ravinesh Kumar*
School of Government, Development and International Affairs,Faculty of Business and Economics,FBE Green House, Laucala Campus,University of the South Pacific,Suva, FijiE-mail: kumar_rn@usp.ac.fj*Corresponding author 
Radika Kumar 
Ministry of Foreign Affairs and International Cooperation,Economics Division, Level 2, South Wing BLV Complex,87 Queen Elizabeth Drive, Nasese,Suva, FijiE-mail: radikakumar@gmail.com
Abstract:
In this study, we explore the contribution from sectoral sharetowards per worker income in the Sub-Saharan Africa (SSA) region over theyears, 1980 to 2009. Within the last three decades, agriculture and services didnot contribute positively towards growth in per worker income. Manufacturingsector on the other hand, had a transcending effect with a positive contributory power (0.31%) towards the long-run growth and sustainability of theregion. Therefore, ‘targeted sub-sectoral’ policy reforms to strengthen backward-forward integration of agriculture and services sectors withmanufacturing operations whilst taking into account the historical diversity of the region are vital matters for development and growth discourse in the region.
Keywords:
agriculture; manufacturing; services; economic growth; ARDL bounds approach; Sub-Saharan Africa; SSA.
Reference
to this paper should be made as follows: Kumar, R.R. andKumar, R. (2012) ‘Exploring sectoral elasticity vis-à-vis per worker incomewith a focus to agriculture: a study of Sub-Saharan Africa’,
 African J. Economic and Sustainable Development 
, Vol. 1, No. 1, pp.27–48.
Biographical notes:
Ronald R. Kumar is affiliated with the School of Economics, Faculty of Business and Economics at the University of the SouthPacific, where he works as a Teaching Assistant. He was a recipient of theSasakawa Young Leaders Fellowship Foundation (SYLFF) award in2009–2010 by the School of Government, Development and InternationalAffairs under the auspices of Tokyo Foundation. He holds a MCom inEconomics and currently, he is pursuing MA in Development Studies. Hisspecific area of research includes migration, development and growtheconomics in developing countries.
 
 28
 R.R. Kumar and R. Kumar 
Radika Kumar is affiliated with Ministry of Foreign Affairs and InternationalCooperation in the Government of Fiji Islands, where she works as anEconomic Planning Officer and she is currently pursuing her MCom inEconomics from the School of Economics at the University of the SouthPacific. Her area of research is on trade in services with particular focus toPacific Island countries.
1 Introduction
The African region is a composition of fifty-three individual countries of which 48countries comprise the Sub-Saharan Africa (SSA) region. The countries within theAfrican region have experienced varied level of progress which is characteristicallydistinguished by the pace of industrialisation, oil exports, and fragility due tosocio-political events. Nevertheless, the challenges facing many of them are complex,ranging from low productivity to high unemployment and from undeveloped middle classto poor health and abject poverty.Although about a quarter of the region’s economies are performing well, themajority of SSA countries are still lagging behind in growth, voice and democraticaccountability, control of corruption, political stability, rule of law and lack of government effectiveness towards addressing environmental diversities and promotingsocial choices which are critical to social and economic progress (Sen and Scanlon, 2004;Sen, 1999, 1997). Further, as noted by many researchers and scholars (Nevile,2007; Alesina, 2003; Sen, 2000; Stiglitz and Squire, 1998; Rostow, 1985; Amin, 1972,among others), the exclusion from the credit market, gender related-related inequalitiesand unfavourable labour markets marred by elements and presence of colonialism andethnic conflicts impinge on sectoral development and critical economic activities in theregion.Subsequently, in the height of increasing food prices and the need to expedite productivity and economies of scale in agriculture viz. manufacturing and servicessectors within the SSA region, the paper explores the contributory powers from thesethree key sectors within the augmented Solow model (Solow, 1956) framework withinsights from the some of the prominent pioneers of growth theory (Domar, 1961, 1952;Harrod, 1959; Schumpeter, 1933). The study is of interest in at least three ways. First, thecontribution of sectors towards the overall economic growth is underscored. Secondly,the study provides a sectoral approach to policy discourse which can be targeted for long-term development of the region. Thirdly, the study outcomes relooks, if not remindsthe poignant history and development in agriculture vis-à-vis other sectors in the Africanregion.The rest of the paper is set out as follows: a brief literature survey is providedexploring the development patterns in Africa with focus to agriculture development,followed by a short analysis on the trends and developments in sector performance. Thefourth section discusses the data, methods and results. Finally, the paper is concludedwith some policy directions for the SSA region.
 
 
 Exploring sectoral elasticity vis-à-vis per worker income with a focus to agriculture
 
29
 
2 A brief literature survey
Agriculture development has been considered as the engine of growth for many lowincome and developing countries in terms of its contribution in providing cheap food,raw materials, labour, savings, and consequent spill over effect on demand for non-agricultural commodities (Staatz and Dembele, 2008; Diao et al., 2006; Tiffin andIrz, 2006; Bravo-Ortega and Lederman, 2005; Doward et al., 2004; Dorosh andHaggblade, 2003; Gollin et al., 2002; Timmer, 2002; Delgado et al., 1998; Lipton, 1977).Further, agriculture has the export generating capacity, particularly for economies thatare in their early stages of development and heavily reliant on primary resources (Dethier and Effenberger, 2011; Johnston and Mellor, 1961; Lewis, 1954). It is also argued thatthe relationship between agriculture and overall economic growth is dependent on thedegree of openness, productivity in agriculture sector versus non-agriculture, and the pace and effectiveness of industrialisation strategy (Gollin, 2010; Dercon, 2009).To emphasise the impact of agriculture on economic progress, various researchers(Bezemer and Heady, 2008; Diao et al., 2006; Mosley, 2002; Lipton, 1987) compare anddifferentiate the African agriculture development with the East Asian. Theycomparatively assess the agricultural expenditure with the price regimes, macroeconomic policies, political stability, health, education, and infrastructure in these regions. Whilefew recent empirical analysis have shown contrary views (Gardner, 2005), quite a lot of studies have found agriculture as a catalyst to long run growth and development for manydeveloping countries (De Janvry and Sadoulet, 2009; Self and Grabowski, 2007).However, balancing agriculture and industry (presumably manufacturing andservices) is an important yet a difficult dimension of development policy given the factthat multi-dimensional causality between agriculture, manufacturing and services exists,which are largely influenced by pricing and elasticity of resources and products, relativedifferences in farm size, (incomplete) missing markets for insurance and credit or links tofinancial markets, limited market access and (imperfect) market information, insecure property and usage rights, unequal income distribution, access and availability of publicgoods, pace of research and innovation, labour market distortions, degree of rural-urbaninvestment and climatic conditions (Dethier and Effenberger, 2011; Christiaensen et al.,2010; Restuccia et al., 2008; Binswanger and Deininger, 1997; Stiglitz, 1987; Bauer,1956, 1955).Within the African context, Amin (2004, 2001, 1984, 1983) in his various studies provides the historical diversity of Africa highlighting a gamut of factors and issuesexplaining the (under)development of African region viz. agriculture development, manyof which by and large, are tied to the colonial and (unfair) trade systems. Furthermore,looking at the historical diversity of Africa, Amin points out that African society cannot be reduced to a single mode of production and therefore, for better understanding, need to be segmented as:1 primitive community2 tributary3 slave-based4 small-scale trade

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