Poverty reduction in Africa: Challenges and policy options

Abstract

The paper looks at the magnitude and evolution of poverty in sub-Saharan Africa over the period 1980–1998. It examines the spread, depth and severity of poverty for the region as well as for specific countries, in part by summarizing country case studies conducted by the African Economic Research Consortium (AERC). The review of the literature reveals that poverty rates in Africa are exceptionally high (relative to rates in other developing regions) and getting worse. In the mid-1990s, the mean head-count ratio for the whole region was 53%, with rural and urban poverty rates of 56% and 43%, respectively. Inequality in the distribution of income is also large, with a mean Gini of 49%. In some countries, rural poverty is in the range of 70–80%, and urban poverty is 50–60%. Improvements in education, health care, maternal education, safe water and sanitation are associated with lower rates of poverty at the regional level at the regional level, as well as within countries. At the country level, some countries with high rates of literacy also have high poverty rates, a situation that contrasts sharply with the households with literate heads invariably have lower poverty rates. This suggests that although education has an independent effect on poverty reduction, its effects via interaction with other factors such as employment and empowerment may be more important. Results also show that countries with large inequalities, and that, the needed redistribution of income and assets can be effected within a relatively short time. The policy challenges in the area of poverty reduction are outlined.