The Economic Development in Africa Report 2012, subtitled “Structural Transformation and Sustainable Development in Africa”, examines how African countries can promote sustainable development. The main message of the Report is that achieving sustainable development in Africa requires deliberate, concerted and proactive measures to promote structural transformation and the relative decoupling of natural resource use and environmental impact from the growth process. Sustainable structural transformation, as defined in the Report, is structural transformation with such decoupling.
The Report builds on the Economic Development in Africa Report 2011 on Fostering Industrial Development in Africa in the New Global Environment. It also fits into UNCTAD’s broader work on the development of productive capacities. The report is timely in the light of the United Nations Conference on Sustainable Development (Rio+20), 20–22 June 2012 and the renewed global focus on greening economies occasioned by the global financial and economic crisis of 2008–2009. The concept of sustainable structural transformation provides a dynamic understanding of the efforts which are involved in greening an economy, and also places such efforts into a development perspective.

There are important differences among economists, and also between economists and ecologists, regarding the relationship between economic growth and the environment, the meaning of sustainability, and the policies necessary to make growth consistent with environmental sustainability. Against this backdrop, this chapter examines some conceptual issues critical to understanding different approaches.
The chapter is organized in four parts. Section A summarizes some fundamental differences among scholars on what sustainability is, how it could be achieved, and the policies deemed necessary to make growth consistent with environmental sustainability. In this context, section B identifies some conceptual issues related to the notions of the green economy and green growth. A particular challenge is to operationalize the idea of a green economy in a development context. Section C builds on one of the approaches of section A to discuss how resource use and environmental impacts change during the course of economic development. This shows that for countries at low levels of development, there will necessarily be a trade-off between structural transformation, on the one hand, and environmental sustainability, on the other hand. Section D introduces the concept of sustainable structural transformation (SST) as an appropriate strategy for managing that tradeoff and introducing a development-led approach to the green economy.

Promoting economic development is not a simple task and not all developmental States have successfully met that end. Successful developmental States have a common approach towards governance. Perhaps the most basic, and one which is often misunderstood, is that they have not sought to replace the private sector through State ownership or to directly control large parts of the economy. Rather they have sought to fulfil the vision through design policies and institutions that harness private ownership, the animal spirits of entrepreneurs and the drive for profits to achieve national economic development goals. Thus the creation of a dynamic and development-focused private sector should be at the heart of policies to promote SST by a developmental State. Key elements of the strategy are public CHAPTER 3. A Strategic Framework for Sustainable Structural Transformation 83 investment to crowd in private investment as well as production sector policies designed to generate a strong private-sector response geared towards increasing investment and technological change in the development directions the government is seeking to achieve (UNCTAD, 2009).

Annex table

1. Share of sectors in water use in Africa, 1998–2007- 63

Box tables

1. Forest area and depletion in Africa - 57

2. Indicative capital investment requirements of the African Development Bank to attain universal access to reliable electric power by 2030 - 79

FIGURES

1. The economy as a subsystem of the Earth system - 12
2. Stylised representation of the EKC Hypothesis - 20
3. Tunnelling through the EKC - 22
4. Components of decoupling - 28
5. A stylized representation of resource decoupling and impact decoupling - 29
6. Material extraction in Africa, by category, 1980–2008 - 39
7. Physical exports and imports of African countries, by material category,1980–2008 - 43
8. Physical trade balances of all African countries, 1980–2008 - 45
9. Domestic material consumption in selected African countries, 2008 - 47
10. Material consumption by region, 1980–2008 - 48
11. Material productivity, by region, 1980–2008 - 52
12. Trends in GDP, material use and energy use, in Africa, 1980–2008 - 53
13. Adjusted net savings, including particulate emission damage in sub-Saharan Africa - 72
14. Projected population, GDP per capita and the required throughput intensity to maintain 2010 levels of environmental impact - 75
15. An integrated framework for relative decoupling in Africa - 77
16. Official development assistance disbursements to the energy sector,2002–2010 - 89

Box figure

1. Overview of policy instruments that promote resource and impact decoupling - 85