Sub-Saharan Africa behind in fight against poverty – World Bank

Data from the World Bank say that developing countries in East Asia, Latin America and South Asia have seen the number of citizens in extreme poverty — that is, living on less than $1.25 per day on the decline. But in sub-Saharan Africa, these rates are increasing despite the region’s fast-paced economic development in recent years.

Economic growth has a central role to play in moving people out of poverty. Trends in sub- Saharan Africa however, points to the fact that the continent is still lacking in macro-economic stability and adequate investment in infrastructure, which are conditions necessary for economic growth and improved standard of living.

“The number of extremely poor people has fallen in all regions except sub-Saharan Africa, where population growth exceeded the rate of poverty reduction,” World Bank report states.

The report also stated that in terms of poverty eradication, about 45 percent of sub-Saharan countries are seriously off track from meeting their Millennium Development Goals.

Most economies in Africa are larger than was previously thought – Nigeria and other African countries rebased its GDP in 2014, a move that was supposed to make Africa’s economic growth remain sustainable, become more inclusive, and support efforts to reduce poverty, but this has failed to leave up to earlier expectations.

The International Monetary Fund (IMF) has forecasted that sub-Saharan countries’ gross domestic product (GDP) will grow by 4.5 percent in 2015, higher than the 3.5 percent global average.

But World Bank statistics say it ranks lowest among all regions in gender equality and environmental sustainability, while ranking highest in indicators such as child mortality.

“I imagine that part of the reason is due to population growth that is outpacing real GDP growth in some countries, which slows growth in GDP per capita,” said Angus Downie, head of economics research at EcoBank, as reported by International Business Times.

He added that it’s always difficult to reach broad conclusions for the entire region, with a variety of countries at different levels of economic growth.

“Another reason in some countries is due to a lack of economic diversification, which is highlighted when a country is hit by a drought or other external shock, pushing many people that live precarious rural livelihoods back into penury,” he added.

According to the report, telecommunications is a vital tool for development, and new technologies are creating opportunities everywhere for it. High-income economies had 121 subscriptions per 100 people in 2013, while low-income economies had 55 subscriptions per 100.

Ending extreme poverty by 2030 will require sustained high growth globally and accelerated poverty reduction in Sub-Saharan Africa as well as fragile and conflict affected states over the next 15 years.

“Macroeconomic stability, adequate investments in infrastructure, and even-handed regulation of enterprise are necessary conditions for economic growth and improved living standards in all countries—developing, newly industrialized, and high income”

“But to make this growth inclusive, countries at all stages of development require greater investments in human capital—especially in the education and health of the less well-off segments of the population,” the report states.

Despite a decade of stable economic growth, the number of Nigerians living in poverty has not declined considerably. And while productivity is on the rise at a healthy clip and driving GDP growth, it is still relatively low and is not translating into rising incomes and improved living standards for most Nigerians. In rural areas, 53 percent of the population lives below the poverty line due to low farm output, poor access to markets, and a rising population that is leading to cultivation of smaller plots, according to a McKinsey report from last year.

 

Josephine Okojie