Oct 19, 2012
Poverty rate a worry despite Africa’s middle-income transitionBack
Africa|Africa Shantayanan Devarajan|Education|Resources|Africa|Angola|Comoros|Gabon|Republic Of Congo|South Africa|Zimbabwe|USD|Bank|Bank Cautions|Sub-Saharan Africa
© Reuse this
Currently, 21 countries, collectively with 400-million citizens, have middle-income status, which the World Bank defines as countries with yearly per-capita income levels of higher than $1 000.
Devarajan notes that at least ten countries, representing 200-million people, were poised to transition to middle-income status over the coming 13 years on the back of prevailing growth rates. Included in the list are countries such as Zimbabwe and Comoros, which would require both growth and stablisation.
Over the past 15 years, the continent had expanded at a rate of two percentage points better than the average global growth rate, and the bank is still expecting sub-Saharan Africa to expand by 4.8% in 2012 – excluding slow-growing South Africa, the region’s largest economy, average growth for the region was forecast at closer to 6% for the year.
But there is potential for a further seven countries, with 70-million citizens, to be included in the middle-income mix over the period if rates of growth accelerated beyond levels achieved over the past 15 years.
Only ten African countries, representing 230-million people, almost certainly will not achieve middle-income status by 2025.
But while Africa’s recent growth spurt has resulted in the first overall reversal in the continent’s poverty rate since the 1970s – from 58% in 1999 to 47.5% in 2008 – the bank cautions that continued progress would depend on continued macroeconomic prudence and improved governance, particularly in the area of natural resources.
In its latest Africa Pulse publication, the bank shows that resource-rich countries have seen a strengthening of economic growth, but poverty rates and inequality levels have not performed as impressively. “Some countries, such as Angola, the Republic of Congo and Gabon, have actually witnessed an increase in the percentage of the population living in extreme poverty.”
“Resource-rich African countries have to make the conscious choice to invest in better health, education and jobs, and less poverty for their people because it will not happen automatically when countries strike it rich,” Devarajan says. “Gabon, for example, with a per-capita income of $10 000 has one of the lowest child immunisation rates in Africa.”
To ensure that the benefits of rising growth are ‘pro-poor’, more jobs will need to be created. And, in the context of high levels of informal sector employment, efforts will also need to be made to improve access to finance and skills in the informal sector.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Editorial Insight News
Article contains comments
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...