Poverty in Africa: Why Economic Growth Will Not Be Enough
Tony Killick, ODI.
Howard White, IDS.
1. David Booth, ODI Research Fellow, introduced the two speakers to the audience. Tony Killick and Howard White have been commissioned to produce the 1999 Poverty Status Report for the Special Programme for Africa. The Report will be published later this year and will be one of the inputs into the World Bank's Development Report 2000/01, which takes poverty as its theme.
2. David Booth linked their presentation to the subject of the first meeting in the series, 'Are the International Development Targets Reachable?' One of the findings presented by Lucia Hanmer is that, even with optimistic assumptions about economic growth, sub-Saharan Africa will not meet the IDT target of halving poverty by 2015.
3. Tony Killick's presentation focused on explaining why growth will not be enough to reduce poverty in Africa. He started from the premises that there is substantial and often worsening poverty in Africa and that comparisons of poverty indicators from developing regions show that global poverty is becoming Africanised.
4. He argued that there are three reasons why growth alone will not reduce poverty in Africa:
- optimism about rapid growth recovery is unjustified - constraints on sustained accelerated growth remain profound;
- large and growing inequalities reduce the possibility that growth can solve poverty;
- the nature of poverty in Africa reduces the efficacy of the growth solution.
5. As regards growth prospects, there are grounds for greater optimism than some years ago, with the mid-1990s recovery not confined to just a small number of countries but the underlying constraints remain severe and deep-seated, most notably the continuing low levels of investment. As regards income distribution he produced evidence showing inequalities in Africa to be on a scale comparable with the extremes of Latin America, with indications that in Africa these are continuing to widen.
6. Concerning the third proposition, he suggested that Africa's poor include many people who are at risk of being left behind when economies grow. Economic dependants - the disabled, aged, orphans, refugees, widows and in some countries junior wives or wives abandoned by their husbands - constitute a large proportion of Africa's poor and are one group that are at risk of being left behind. Among economic dependants children are a particularly significant group - 100-150 million children live below the poverty line and two fifths of African children are malnourished. The benefits that economic dependants get from growth are contingent on public or traditional sharing mechanisms and on distributional trends - hence growth alone will not ensure an increase in their standard of living.
7. Other groups who are at danger of being left behind are the landless and unemployed; subsistence farmers; pastoralists and particular groups of the urban poor.
8. The remoteness of many regions in African countries, gender biases and illiteracy increase the likelihood that many of the poor will be unable to participate in economic growth.
9. Poverty reduction in Africa depends on the nature of the growth path and what types of incomes are raised as a result. Of critical importance is the ability of economic growth to create jobs.
10. If growth alone is not enough, what additional policies are needed for poverty reduction in Africa? Howard White addressed this question in the second half of the meeting. Growth policies have been implemented in sub Saharan Africa for over a decade with structural adjustment programmes, but the ensuing growth has been weak, erratic and anti-poor.
11. The problem in Africa is that the poor face barriers to participating in economic growth. Policies that reduce these barriers would reduce poverty and enhance the prospects for future growth. For example in Africa 75% of the burden of disease comes from communicable diseases and there is evidence that many people become disabled as they cannot afford health care at critical times. Although not much is written about it, disability is the hidden face of poverty in Africa. Greater investment in health services to reduce these diseases would mean not only less poverty (fewer people become disabled or unable to work) but also that society overall benefits from lower rates of communicable disease. Investment in education that the poor can access is another area where greater investment has high social as well as individual benefits.
12. Provision of infrastructure is another policy that can reduce the barriers faced by the poor. Transport costs are equivalent to a tax of 20-30% on agricultural exports in some African countries. Not only does infrastructure affect thus the pattern of growth, but lack of it can also worsen poverty as it prevents access to health and education, and increases women's workload. Infrastructure is a public good - in the sense that once it is provided it is difficult to exclude people who do not pay from using it - so the private sector cannot be expected to supply it where it is needed.
13. As the two examples above show, a more active role for government is needed to reduce many of the barriers the poor face to participating in economic growth. However government interventions have not always been successful. Howard White pointed out that attempts to reform land and labour markets have not always benefited the poor. Often traditionally based systems of land access provide more benefits to the poor than market based ones, although specific groups of the poor, single women, particular ethnic groups etc. may be excluded from these benefits. Also, government intervention in labour markets often places restrictions on informal sector activities.
14. Two factors give grounds for optimism about the future of Africa. Firstly, African governments have achieved considerable successes in the past, for example in increasing primary school enrolments post independence. Uganda and Malawi show that it is still possible to achieve the same results today. Secondly, fertility in Africa is falling and evidence of a large and unmet demand for contraception shows that this trend is likely to continue as long as governments enact policies to allow this demand to be met.
15.Howard White concluded by saying that we should realise that there are no new ideas to 'fix' poverty in Africa. Most current policy approaches have their origins in earlier thinking on development. For example the sustainable rural livelihoods approach can be traced back to the integrated rural development approach of the 1970s. Greater attention needs to be paid therefore to what can be done to make ideas work. Optimism for Africa must not be overstated - if policies continue to be implemented in the same way as they are at present then the International Development Targets will not be met.
16. Points made in the discussion included: Policy measures that can enhance the spatial distribution of growth are needed.
- It is important to recognise that social capital is a key factor in poverty reduction - particularly for those whose welfare is contingent on redistribution.
- To reduce poverty in Africa measures need to focus on reducing shocks, e.g. climatic and terms of trade shocks, and finding measures that can allow the poor to smooth consumption when shocks hit.
- There has been a record of state failure so the potential of the state to fix the market (remove barriers to the poor's participation) is not great.
- War must be at the heart of any explanation of poverty in Africa.
- The link between inequality and market reform needs to be understood.
- The scope for redistribution through tax revenues is low in Africa.
- In many African economies where growth has occurred, inequality has also increased and the causes of increased inequality are deeply rooted in the political economy. An important question is why is poverty not a political issue in most of Africa?