World Bank Report: Poverty Rates Remain High in Africa | Africa | DW

According to the World Bank's latest report on poverty and shared prosperity, sub-Saharan Africa is the only region in the world where the number of extremely poor is increasing rather than decreasing. On a global scale, extreme poverty rates – defined as earning less than $ 1.90 per day (1.64 euro) – have fallen dramatically, dropping from 1.9 billion in 1990 to around 736 million. However, about 413 million people in Africa currently live in extreme poverty, more than half of the world's population. DW met with Senior Adviser to the World Bank's Development Research Group, Francisco Ferreira, on why poverty rates remain high in Africa and on efforts made

DW: What's behind the high poverty rates in sub-Saharan Africa?

Francisco Ferreira: We are seeing across the world that conflict, institutional fragility and violence are associated with increasing poverty. And of course, a number of fragile and conflict-affected countries are in Africa. Some, like the Central African Republic, South Sudan or Somalia, immediately come to mind. The absence of law and order is clearly one of the main drivers of slow progress and increasing poverty in the region. The second [reason] is the rapid growth of the population. This is very high, especially in the Sahel and in some parts of West Africa. This rapid population growth is associated with an increase in the number of poor people. And when we look at longer periods, economic growth in Africa has been lower than in Asia, for example, which is the other area where poverty was prevalent before but where it declined much more rapidly. So, growth has been weaker. And finally, it has been less pro-poor than in other regions. Thus, not only is growth weaker and more volatile, but it is also less effective in reaching the poor and improving their living conditions.

According to a recent study by Oxfam, Nigeria is the country that does the least to fight poverty. Do you think that the fight against the extremist Boko Haram group and other violent conflicts plays a role in all this?

We do not rank countries' efforts to reduce poverty as Oxfam does. I will not comment on it. But I will say that Nigeria has at least two important factors that, throughout the continent, are associated with weaker progress. One of them is, as you mentioned, the existence of a widespread conflict in the north-east of the country with Boko Haram. The other is a very strong dependence on an extractive industry, in the case of Nigeria, oil. Although Nigeria is now Africa's largest economy and is well diversified in some respects, it still relies heavily on oil for its exports. You can also think of Equatorial Guinea, Zambia for copper and DRC for a number of minerals. There are many African countries that still rely heavily on extractive industries. When much of the growth comes from a capital-intensive sector, which does not employ a lot of people, that does not have many links with the rest of the economy This has long been a challenge for African policymakers, I think are aware of. But it takes a lot of work to change the pattern of growth in favor of the sectors and places where the poor live, or to redistribute the benefits of growth elsewhere, by investing in the poor themselves, in their education and in their development. health. but also in the infrastructure services they need to become productive. To return to Nigeria, it is a country that has been very successful recently. As we know, it overtook South Africa a few years ago as the region's largest economy. But it is very difficult to ensure that these macroeconomic successes translate into benefits for the poor. And this is somehow emblematic of the region as a whole.

Which countries have made great progress in reducing poverty?

In Africa, I [would certainly mention] Ethiopia, which despite the political difficulties, has been very successful economically in reducing poverty and helping to diversify somewhat its economy. It's still essentially an agricultural country, but the manufacturing industry has seen some growth. If we look elsewhere than in Africa, I think of course some of the big success stories are countries like China and Vietnam that have made tremendous progress in terms of pro-poor growth. Of course, there are many poor urban dwellers in Africa, but the majority of people living in extreme poverty in Africa still live in rural areas and are still involved in very low productivity agriculture. Policy makers need to think about them and make investments where they are.

What could African governments do to reduce poverty?

The two key elements are continued diversification of the economy, particularly in countries heavily dependent on one or a few extractive industries. Because we know that extractive industries can contribute to long-term sustainable growth, but only if the benefits are reinvested in more sustainable and sustainable resources. This capital must be reinvested in other forms of capital, mainly human capital. Countries that are becoming prosperous, like Germany, Denmark or the United States, have an educated, healthy and productive population. This investment must also be made in Africa. It is not enough to build schools or health posts. It is more important to ensure that they are well staffed with teachers and health workers who come and are not often absent. In addition, investments in specific types of infrastructure that would really make people more productive, investments in better roads and railways and investments in not only available but reliable electricity. If people's goods can flow, their goods can reach markets. If electricity is reliable, manufacturing companies can come and invest. They will not do it if electricity is available only four hours a day. So there is a lot of investment in human capital and infrastructure that I think would be very important. But none of this can work without strong democratic governance and the rule of law.

Read more: James Shikwati: "The development of Africa must come from within Africa"

When you visit African cities, you see a lot of new homes under construction, especially in cities like Nairobi or Luanda. You see new cars on the roads. Is this a sign that poverty is already diminishing or is it a sign of worsening inequalities?

I think it's a sign of both of these things. There is growth and there has been growth and when that happens, there is a reduction in poverty. It was simply slower than we would have liked and slower than other regions or countries were able to do it. Now, growth in big cities – new buildings in Nairobi or Luanda, as you mentioned – these specific investments will probably not reduce extreme poverty as they relate to people who were already living well. above $ 1.90 per day. I would be more excited to find electricity in a village where it did not reach before or new wells being dug so that women walk less hours to get water. So there's a lot of that growth that is much less noticeable when you're visiting a big city, but it's that kind of progress at the village level where the poor live, which I think will make a big difference to the prosperity at the bottom of the distribution. .

How do you see the long term prospects for Africa?

If the region continues to perform well over the past decade, this prospect is probably not excellent. According to our usual scenario, by 2030, poverty in sub – Saharan Africa will still reach 25%, compared with 2% in the rest of the world. If this is the case, almost nine out of ten poor people in the world will live in Africa. Now can this be changed? Yes. Africa can make a difference if it brings the kinds of changes in governance, the kinds of improvements in the quality of governance, and the types of investments in human capital and infrastructure I was talking about, in order to a more diversified economy. So, there is certainly a lot of hope. There are many dynamic, creative and entrepreneurial people in Africa who could make a huge difference for the region.

Francisco Ferreira is Senior Advisor in the World Bank's Development Research Group.

This interview was conducted by Friederike Müller-Jung. It has been edited and condensed for clarity.