Poverty amidst resource-rich African countries


Africa’s economic fortunes have changed dramatically in the past decade and economic growth has been driving up average incomes, with most countries in the region having recovered strongly from the global recession, reads the African Progress Panel Report released last week. The Sub Saharan region performs strongly once again when it comes to economic growth with an average growth of 5 percent.
Despite positive progress, poverty still remains to be one of the key challenges. The report says that although rising income tends to help alleviate poverty and improve human development, the increasing gap between the ‘haves’ and ‘have nots’ makes the relationship between growth and poverty in Africa difficult.
Another lingering challenge mentioned is ensuring that Africa’s growing youth population gain opportunities for improved nutrition, health, education and employment. Between 2010 and 2025, the number of children under the age of 14 in Africa, will increase by 112 million.
The report continues by indicating that in a region where agricultural productivity is struggling to keep pace with population growth, where child malnutrition is declining far too slowly, where the number of out-of-school children is rising and where high youth unemployment is endemic, it is vital that the wealth of resource available is used, not just to lift people out of poverty today, but to finance investment in human capital needed to create hope for the future generation.
What the report puts down as an interesting finding is the gap between where countries stand in the rankings for wealth as measured by income and the Human Development Index. It identifies that, among 20 Sub Sahara African countries identified by IMF as resource rich (Nigeria, Guinea, Gabon etc…), 14 of them have a lower Human Development Index standing than their income should warrant. This shows that economic growth doesn’t necessarily translate into the type of indicators that contribute to human development.
Findings show that the mentioned resource-rich countries have levels of maternal mortality higher than those with much less income. It also states that these countries have a high rate of adult illiteracy, low school enrollment and wider gender gaps. Child malnutrition has also been found to be endemic in these resource-rich countries.
The report puts inequality as the main wedge driver between growth and poverty reduction. The rate at which poverty falls depends on the increase of average income and how much of that income goes to the poor. Extreme inequality restricts the development of markets, undermines investment opportunities and denies access to the resources the poor need to increase their productivity and ensure they have a better standard living.
Another finding relates to the environment and resource-rich countries. In most of these countries extractive industries employ relatively few people, but their operations have wider effects on communities, who often feel excluded from the benefits and the wealth that the industries generate and are invariably harmed by the disruption caused or the ecological impacts of extraction.
Over the next decade, governments of resource-rich countries across Africa have a unique window of opportunity. Many have built a track record in strong macroeconomic management. Innovative international partnerships between governments, the private sector and civil society are driving reforms. And some African governments have road maps for regulating their natural resources, but more action is still needed for an effective and equitable stewardship of Africa’s wealth in natural resources to transform the region, the report concludes.