Structural Transformation for Inclusive Development in Africa: The role of active government policies*

This study examines the relationship between structural economic transformation and the economic, social and political dimensions of inequality. It is motivated by the renewed emphasis by policymakers in Africa to adopt a more inclusive growth trajectory through commodity-based industrialization. Drawing on theoretical and empirical evidence, the study shows that structural transformation is not a sufficient condition for inclusive growth. Indeed, even though structural transformation can result in poverty reduction, in the absence of active policies, the latter often coexists with rising inequalities. Active government policies that improve social service delivery, enhance agricultural sector productivity, minimize ethnic and gender inequalities, and strengthen social protection programmes are key to an inclusive structural transformation agenda.