Is Africa’s rural economy transforming as its economies
grow? This paper uses comparable income aggregates from
41 national household surveys from 22 countries to explore
the extent of income diversification among rural households
in Sub-Saharan Africa, and to look at how income
diversification in Sub-Saharan Africa compares with other
regions, taking into account differences in levels of development.
The paper also seeks to understand how geography
drives income diversification, focusing on the role of agricultural
potential and distance to urban areas. The countries
in the African sample have higher shares of on-farm income
(63 versus 33 percent) and lower shares on nonagricultural
wage income (8 and 21 percent) compared with countries
of other regions. Specialization in on-farm activities
continues to be the norm in rural Africa (52 percent of
households, 21 percent in other regions). In terms of welfare,
specialization in nonagricultural income-generating
activities stochastically dominates farm-based strategies in
all of the countries in our African sample. Crop income
is still important for welfare, however, and even at higher
levels of household income, crop activities continue to play
an important complementary role. Regardless of distance
and integration in the urban context, when agro-climatic
conditions are favorable, farming remains the occupation
of choice for most households in the African countries for
which the study has geographically explicit information.
When urban integration is low and agricultural conditions
more difficult, the picture is mixed, with households more
likely to engage more fully in nonfarm activities in Niger
and Malawi, but less likely to do so in Uganda and Tanzania.