Why poverty levels in Africa remain high despite growth
A number of readers asked why it felt like in many countries, the number of people getting poor was increasing. Was the average African truly benefiting from the rapid growth in Africa? This week I explore some of the reasons why the number of poor people in Africa is increasing when Africa’s economies are growing so rapidly?
This year marks the 20th year since Sub-Saharan Africa (SSA) embarked on a path of faster economic growth. Over this period, growth has averaged at 5,2% per annum, whereas the number of people on the continent reportedly living under US$1,25 a day has continued to creep up from 358 million in 1996 to 415 million in 2011; the year 2011 being the most recent year for which official estimates are available.
Can these divergent trends be explained?
The most obvious reason would be that all the benefits of growth were captured by the rich, resulting in ever-increasing inequality in each country — the rich are simply getting richer.
The data, however, doesn’t show much evidence of that. Distribution trends within African countries vary dramatically. The distribution is widening in as many countries as it is narrowing and in most countries it is not changing much at all.
It is possible that the very rich people, the top 1%, are benefiting from the share of the spoils of growth, by more than their fair share, but this is missing from the data as this rarified class tends not to participate in household surveys from which statistics and distributions are derived.
