As development scholars and practitioners pay i
ncreasing attention to the rural nonfarm
economy for a variety of reasons, our understanding of the etiology and effects of income diversification
behavior among African farm households must likewise increase. In introducing an exciting set of seven
paper
s on the topic “Income Diversification and Livelihoods in Rural Africa: Cause and Consequence of Change,” this paper has reviewed the core conceptual issues at the heart of research on diversification
behavior. More importantly, we lay out three empirical
regularities identifiable not only in the papers of
this special issue, but also in the existing published and “grey” literatures. First, there exists a positive
relationship between nonfarm income and household welfare indicators across most of rural Af
rica.
Second, substantial entry or mobility barriers to high return niches within the rural nonfarm economy limit
access to a subpopulation of relatively well
-
endowed households. Third, panel data evidence from
across the continent suggest that greater n
onfarm income diversification causes more rapid growth in
earnings and consumption. These latter two regularities, combined, foster a positive feedback loop,
wherein those participating in the rural nonfarm economy enjoy faster income growth, thereby prov
iding
the resources to plow back into expanded nonfarm activity.
The policy challenge lies in making the opportunities extant in much of the nonfarm economy
accessible to the majority of rural Africans who haven’t the education, skills, or financial or
social capital
to get into the many lucrative niches available across the continent. We argue for (i) creating clear
institutional ownership over rural nonfarm matters within government and research institutions, (ii)
investing in sustainable rural financ
ial systems that can reach previously excluded subpopulations, (iii)
redoubling efforts in education and health to stem the serious threats posed by
HIV/
AIDS and violence
in rural areas already deficient in skills and education, and (iv) increased investme
nt in the physical and
institutional infrastructure necessary to make markets accessible to all
, including the need for post
-
crisis
reconstruction
. It is difficult to imagine an effective rural poverty reduction strategy for Africa that does
not aim to h
arness the potential of the nonfarm sector. Yet absent well
-
targeted interventions, stimulus
of the rural nonfarm economy is likely to bypass most of the poorest rural Africans.