Poverty declines in Africa but the number of poor rises

BY ALAN GREEN with DR. PHIL AZE 

In a new report released on Friday in Accra, Ghana, the World Bank paints a somewhat less gloomy picture of poverty in Africa, indicating that poverty is probably not as high as current data suggest. However, the report states that the number of poor has increased significantly since 1990.

Using new data, the report, titled Poverty in a Rising Africa, reviews the status of poverty and inequality, and arrives at the conclusion that “The main messages which emerge from this effort to assess poverty in Africa are both encouraging and sobering,” in the words of Kathleen Beegle, World Bank program leader and co-author of the report, who added: “Although the data show that the share of the African population in extreme poverty did decline, major poverty challenges still remain, especially in light of the region’s rapid population growth.”

According to the report launched by World Bank president Jim Yong Kim, 43% of Africans lived below the poverty line (that is people surviving with less than $1.90 a day) in 2012, a significant drop from 56% in 1990. (The numbers could be even better using less conservative data, the report suggests). But, at the same time, due to Africa’s high rate of population growth, the number of poor shot up between 1990 and 2012, translating to 330 million poor in 2012 against 280 million in 1990, using the most optimistic data. The African Development Bank estimates that Africa’s population has grown from 600 million in 1990 to over a billion in 2012, and will continue to grow to an estimated 1.6 billion by 2030.

The report also points out that poverty reduction has been slower in so-called “fragile countries” (those shaken by violent conflicts) and in rural areas. Importantly, though, the report states that the rural-urban gap has narrowed.

The numbers vary from countries to countries. Ghana, the venue of the launch, has cut poverty from 53% in 1991 to 21% in 2012. In an interview with the French news agency AFP, Makhtar Diop, World Bank vice-president, reportedly cited Rwanda and Ethiopia as two countries that have made clear progress thanks to advances in agriculture. The World Bank official stresses the significant role of agriculture, reportedly saying to the AFP reporter that “the growth rate in agriculture makes an enormous contribution to reducing poverty,” owing to the fact that the majority of Africans (between 60 and 70%) live in rural areas.

Nonmonetary poverty has declined as well, the report says, pointing to a four percentage point rise in adult literacy rate compared to 1995, adding that newborns are expected to live six years longer, and chronic malnutrition among children under five years of age is down to 39%, a six percentage point decline.

However, illiteracy rate is still high, affecting more than two in five adults. The report unveils a paradox, saying that “citizens in resource-rich countries have worse outcomes in human welfare indicators, conditional on income,” adding: “This finding underscores that while economic growth is critical for poverty reduction, it is not sufficient.”

While noting that seven of the 10 most unequal countries in the world are in Africa, the report says that inequality is not higher in Africa than in the rest of the world. It also notes that the number of extremely wealthy Africans is on the rise, pointing out, however, large differences between rural and urban areas and across regions.

This report, one of two of its kind that are expected on the subject of poverty reduction in Africa, finally calls for better data to track poverty in Africa: “Better data will make for better decisions and better lives,” said Luc Christiaensen, World Bank lead economist and co-author of the report.