Policymakers must take steps to face down opposition from powerful interest groups and draw on the power of social movements, says ODI.
March 7th, 2025 | By Stephen Williams | Image : GIANLUIGI GUERCIA/AFP
The report finds there is typically still a hierarchy that prioritises economic growth above social inclusion and poverty reduction, and in turn above ecological sustainability.
Second, there is not enough attention given in research and policy towards the necessary tradeoffs between environmental sustainability and social inclusion or poverty reduction, which the report says need to be actively managed.
The authors say that any successful strategy to implement ISET policies must acknowledge likely opposition from powerful interests, and develop tactics to address this, such as compensation for losses or public–private partnerships that favour ISET-aligned investment. They also say that strategies should “draw on the power of social movements and communities to hold the public and private sectors to account.”
There must also be an attempt to tackle “passive opposition in critical institutions that remain committed to economic growth above all else,” the report says. For example, the report says that progress can be accelerated by developing ISET units in ministries of finance and planning. The private sector, trade unions and civil society should all be mobilsed to boost the impact of ISET, it says.
“Evidence suggests that all types of political regime can make progress on ISET, though it helps if a regime’s social foundation is broad rather than narrow; social movements are strong; and voice and accountability are high,” the report finds.
Governments must commit
Speaking at the launch of the report, Mavis Owusu-Gyamfi, President and CEO of the African Center for Economic Transformation, posited that many low- and middle-income countries are juggling a number of complex and inter-related challenges.
She proposes three measures to counter these challenges.
“The first is to go beyond growth and really commit to economic transformation. The second is to strengthen governance, and introduce smarter regulations to support green development, or green industrialisation. And thirdly, [African countries] must prioritise shared power and gender equity as part of their economic transformation journey.”
ACET’s research indicates that countries that transform their economies are more resilient to shocks and tend to react better to global shocks.
Launched last year, ACET’s economic transformation index, which tracks 30 countries on the continent, representing 86.5% of Africa’s GDP, found that economic transformation overall has stagnated.
Owusu-Gyamfi says that that lower middle-income African countries must develop stronger governance and regulatory frameworks to support a more effective green industrial pathway.
She holds that their current governance and institutional frameworks are generally weak.
“They keep countries from transforming,” she says, “leaving room for jobless growth and encouraging environmental degradation over sustainability: for far too long they have kept many people from contributing and benefiting from the economy.”
Similarly, the ISET report finds that progress so far is often down to factors unrelated to effective governance.
“Where there is modest progress, it is typically driven by one or more of the following: external (international) pressure via value chain standards, trade agreements or the SDGs; internal pressure via progressive social movements; and crises that prompt radical ISET-related action from governments. Countries experience these drivers differently, with the result that progress in policy-making and outcomes is highly varied.”
Source: Africanbusiness
