Africa economic growth not enough to reduce poverty
Tag: Africa economic, Africa economic growth
Summary: Africa may have enviable economic growth rates by global standards, but they are still not enough to pull its growing population out of poverty, the World Bank said on Thursday.
Africa may have enviable economic growth rates by global standards, but they are still not enough to pull its growing population out of poverty, the World Bank said on Thursday.
Addressing the media during a visit to Nigeria's commercial hub of Lagos, Marcelo Giugale, World Bank Director of Economic Policy and Poverty Reduction Programmes for Africa, was asked if the continent was growing fast enough to fight dire poverty.
"The short answer is 'No'. It's not enough to reduce poverty, not by enough," he said, adding that the reasons were complex and varied.
The IMF this month revised down its growth forecasts for Africa in 2012 to 5.4 percent, lower than previous forecasts.
Africa's growth has remained above 5 percent in the last eight years, underpinned by strong prices for its natural resources, better governance and growing disposable incomes, but poverty is not falling anywhere near as fast.
The World Bank estimated on its website in March that the percentage of poor Africans fell from 58 percent in 1999 to 47.5 percent in 2008, a decline of about one percentage point a year.
"You certainly need much more than the GDP numbers going up. The translation from growth to employment is complex: It depends on labour market, skills, infrastructure, the quality of the business environment. Growth can be very fast and you still don't see poverty reduction," Giugale said.
He added that when high inflation accompanied growth - as it has in much of Africa - the impact on poverty was severe.
While growth was not enough by itself for poverty to fall, high inflation was enough to guarantee it would rise because price rises hit the poor the hardest.
Many African countries were too dependent on commodities, so were also not able to deliver employment.
"Not many countries have translated fast growth into fast employment creation," Giugale said. "One reason is: when you are growing out of a commodity, it is different to if you are growing out of a wider selection of sectors."
He urged African countries to remove barriers to trade between themselves, just as rich-nation demand for raw materials had integrated them with world markets.