Moving Up or Moving Out? Insights into Rural Development and Poverty Reduction in Senegal

While worldwide progress in poverty reduction has been impressive, Sub-Saharan Africa is lagging behind with slow growth and a high-poverty headcount ratio. There are fierce debates on how Sub-Saharan Africa can foster pro-poor growth and the role of agriculture and small- versus large-scale farming in poverty reduction. We contribute to this debate with micro-economic empirical evidence from the Senegal River Delta, an area that recently experienced rapid rural development. We use household survey data from two panel rounds in 2006 and 2013 and a cluster analysis to investigate livelihood, income, and poverty dynamics in the region. We find that with 4.3% annual growth in average household income, 29.5 percentage points' poverty reduction, and 4.2 percentage points' inequality reduction over the period 2006-13, development in the Senegal River Delta region has been remarkably pro-poor. Income growth and poverty reduction have been most impressive among households moving into wage employment on large-scale horticultural export farms and in an emerging service sector. Income growth in small-scale agriculture and non-farm businesses has been more modest but has affected the largest number of households. Transformation in both farm and non-farm sectors has driven rural development in the Senegal River Delta region, and investments in both large- and small-scale agriculture have contributed importantly to household income growth and poverty reduction. Our findings imply that (foreign) investments in large-scale commercial and export-oriented farming can trigger pro-poor growth directly through employment effects and indirectly through investment and consumption linkages with the small-scale farm and non-farm sector. (C) 2017 Elsevier Ltd. All rights reserved.