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[Caveat emptor: official statistics about Africa seem to be disproportionally affected by government failure].
According to the World Bank poverty estimates, Africa hasn’t seen large reductions in the absolute numbers of poor people. Compared to China, for instance, the number of poor people – those living on less than $1.25 a day – has grown steadily in Africa:
The numbers almost doubled from 200 million in 1981 to 400 million in 2005, although in 2008 they fell by a few million (source). Between 2005 and 2008, for the first time, the absolute number of poor people declined, from roughly 395 million to 386 million. That, however, is still almost half of all Africans. The estimate for 2010 is 414 million.
And yet, a lot of the growth in the absolute numbers is due to population growth. If you look at the relative numbers, the percentage of poor Africans has actually been falling during the last decade. Using the measure of people living on $1.25 a day or less, the World Bank estimates that the percentage of poor Africans fell from 58 percent in 1999 to 47.5 percent in 2008 and 44 percent in 2011. This rate of decline of about one percentage point a year is a welcome change from the previous decade when the poverty rate increased:
This paper tells the same story but with an alternative and even more optimistic set of numbers. In the graph below, the rate of the population surviving on less than $1 dollar day has fallen to 32% in 2006 from a high point of 45% in the late 1980s. How come? As you can also see in the graph, at the time poverty began to decline around 1995, GDP began to grow (after three decades of zero or negative growth). The graph shows a striking correlation between poverty reduction and economic growth (something I have written about before in another context, see here and here).
Of course, poverty reduction isn’t the automatic result of GDP growth only. Other factors are at work as well.
What’s interesting is that this African growth spurt since 1995 (probably briefly interrupted by the current recession) isn’t just caused by growing oil prices. If that had been the case, we would have seen increasing income inequality, since revenues from the oil industry are typically appropriated by elites. But that’s not the case. Poverty reduction in Africa has gone hand in hand with a reduction in income inequality. You can see the extent of this reduction in the following two graphs:
This means that growth has benefited the poor.
It’s a development that is remarkably general across African countries and that is not just explained by good news in a few large countries. Poverty is falling even in countries which are believed to burdened by geography, bad agricultural prospects, a history of slave trade, war, or lack of natural resources.
Notice the often large discrepancies between the World Bank poverty estimates and the different national estimates using a national poverty line:
A lot of these differences are caused by somewhat strange national choices: Uganda assumes that a person needs 3000 kilo calories per day, which is 40 percent higher than the threshold used in Angola or Mozambique, and Tanzania uses a survey-based price index instead of its official Consumer Price Index.
According to national numbers, Rwanda moved one million people out of poverty. Ghana and Uganda also showed significant declines in poverty. Where growth was anemic or negative, as in Cote d’Ivoire, poverty rates increased.