‘African economies reflect paradox of growth, poverty, opportunities’

Economy-spectacles-1Despite the impressive economic growth and potential being showcased by many African economies, latest report by the United Nations Economic Commission for Africa (UNECA) shows that there remains a paradox of growth and poverty that needs to be addressed by promoting inclusive economies and quality growth with fair distribution.

According to the report, the numbers look good but as much as African economies have grown in the past decade, they still produce inequality and lack fair distribution and inclusion.

The report which was presented at a conference on ‘Addressing poverty and inequality in the post-2015 development agenda’ showed that Eastern Europe, Western Asia, Latin America, Caribbean and North Africa score the highest in inequality elasticity of poverty between 6.85 and 4.34 while sub-Saharan Africa scores a meagre 1.56 points.

The Executive Secretary of the Economic Commission for Africa, Carlos Lopes stated that “eradicating poverty while stimulating prosperity is the biggest challenge for Africa today”.

Africans celebrate the potential, more than the results,” said Mr. Lopes thereafter explaining that to achieve results, “African states have to insist on inclusion, employment creation, and the reduction of poverty”.

“Real structural transformation is what is needed but structural economic transformation is not a magic bullet for narrowing inequalities,” said Bartholomew Armah of ECA who unveiled results of his research on policies needed to achieve an inclusive transformation that benefits most of the continent’s citizens.

Armah in his investigation on policy measures and drivers of structural transformation concluded that “limited decent job opportunities contribute to the slow change of Africa’s economies”.

He cited the decline in employment to population ratio of 57.7% to 44.4 % between 2005 and 2012 as one of the main factors of this sluggish economic change.

There are no easy answers for a continent that simultaneously experiences economic growth and inequality. Academics and policy makers “affirm the relatively weak impact of growth on poverty in Africa,” said Armah

Economic forecaster at ECA, Abbi Kedir, pointed out that while global rates of poor people were reduced from 1.93 billion in 1981 to 897 million people, Africa, though it has improved its economies, has moved from having 291 million poor people in 1990 to almost 389 million in 2012.

Kedir asserted “progress on tackling poverty is good globally but it’s not universal and that the burden of poverty is spread unevenly”.

“More of the same will not get us to reduce the number of poor. The persistence of poverty and inequality expose the weak link between the fast growth and welfare,” said Kedir.

Gathering data from approximately 20 countries, the ECA forecaster declared it would take an average of 33 years to reduce poverty in Africa with upper -middle income countries needing only 9 years, and lower-middle income countries requiring about 26 years whilst lower income countries will need 43 years to address the scourge of poverty.

Whilst Africa’s gini coefficient of 0.43 over the period 2000 ‐ 2009 is second only to Latin America which averaged 0.52 over the same period, poverty is declining but inequality remains high in the majority of African countries.

Armah however concluded that active policies are required to shape inequality outcomes, saying, there is no single solution to Africa’s poverty and developmental issues.

“Addressing growth and the development financing gap concerns do not solve developmental problems. Addressing inequality requires a focus on inequality of opportunity and inequality of outcomes,” is the one of the ways forward for the continent”, he added.

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