ADDIS ABABA, June 6 (Xinhua) -- Sub-Saharan Africa's high self-employment rates have resulted in volatility of household incomes, an expert said Wednesday.
Haroon Bhorat, professor of economics at the University of Cape Town, while presenting a study on economic growth and inequality reduction at the headquarters of the United Nations Economic Commission for Africa (UN-ECA) in Ethiopia, said sub-Saharan Africa's higher self-employment rate has brought risk to income stability.
According to Bhorat, a defining feature of the African labor market is that an exceptionally high proportion, approximately 74 percent, of the sub-Saharan Africa's labor force are self-employed, as opposed to being engaged in wage employment.
Noting that 77 percent of sub-Saharan Africa's self-employed workers find themselves in the agricultural sector, Bhorat said this has a "compounding effect on the volatility of household incomes."
"Unemployment is not the biggest challenge in sub-Saharan Africa," Bhorat, adding that "the region's biggest challenge is the working poor."
He further stressed that income from self-employment "is historically more variable than wage employment."
He also stressed that income inequality has on average declined in Africa, driven by economies that are not highly unequal, while in high-inequality economies, there is a stronger relationship between economic growth and inequality.
Natural resources dependence and the associated impacts such as governance failures, and capital intensity have remained critical to be resolved for more inclusive growth, according to the expert.
"Without domestic manufacturing, economic growth is not sustainable," he said.
Bhorat was addressing a two-day ECA's Expert Group Meeting and Policy Forum on "Poverty, Inequality and Jobs in Africa," which aimed to examine the interlink between poverty, inequality, and employment in Africa.