JOHANNESBURG (Reuters) – Africans are getting wealthier more quickly than previously believed, according to a new study that also suggests the poorest continent’s riches are spreading beyond the narrow confines of its elite.
“Africa is reducing poverty, and doing it much faster than we thought,” the study by US-based economists Xavier Sala-i-Martin and Maxim Pinkovskiy said.
“The growth from the period 1995-2006, far from benefiting only the elites, has been sufficiently widely spread that both total African inequality and African within-country inequality actually declined over this period.”
The research, which assesses poverty levels and income distribution from 1970 to 2006, lends weight to a belief among local and foreign investors that Africa is finally getting its act together 50 years after shaking off the colonial shackles. The study also challenges the suggestion that strong African growth over the last decade or more has done little to alleviate grassroots poverty due to the countervailing effect of equally strong population expansion.
Going by an inflation-adjusted $1 per person per day yardstick, the study, using statistical analysis pioneered by the two authors said 32 percent of Africans were in poverty in 2006, compared to 42 percent in 1995 and 40 percent in 1970.
By contrast, the United Nations’ population agency estimates the average African is 22 percent worse off now than in the mid-1970s because “20 years of an almost 3 per cent annual population growth has outpaced economic gains”.
Similarly, in 2008 the UN Development Programme said sub-Saharan Africa had made “little progress” in reducing extreme poverty as part of a Millennium Development Goal bid to halve it between 2000 and 2015.
The new study, published by the private, non-profit US-based National Bureau of Economic Research, analysed the shift in distribution curves of African incomes, derived from standard data sources over more than three decades.
Africa’s failings appear particularly stark when compared with the tens of millions who have benefited from the economic boom in Asia, most notably China and India.
However, the study suggests Africa is on track to achieve its goal only two years late — and if the impact of civil war in the Democratic Republic of Congo in the last decade is stripped out, it would get there two years early.
“The main point is that Africa has been moving in the right direction and, while progress has not been as substantial and spectacular as in Asia, poverty has been falling and it has been falling substantially,” the authors wrote.
They also cast doubt on the perception that wealth continues to be concentrated in the hands of the few, be they from the politics, the military or big business.
