Growth, Inequality and Poverty in Sub-Saharan Africa: Recent Progress in a Global Context

TLDR

The study reviews SSA’s poverty progress, noting that since the mid‑1990s the region has experienced a growth resurgence and compares African poverty incidence to other countries. Using recent World Bank data, the authors aim to analyze how changes in income and inequality translate into poverty reduction across many SSA countries within a global context. They decompose poverty performance by separating income and inequality effects for SSA countries with available data and present comparative incidence statistics relative to other nations. Results show substantial poverty decline in SSA, yet progress is mixed compared to a global sample; income growth is the primary driver overall, inequality plays a key role in some countries, and low income levels limit the impact of income and inequality improvements.

Abstract

The present study employs recent World Bank data to shed light, in a global context, on the transformation of changes in income and inequality into poverty reduction for a large number of countries in sub-Saharan Africa (SSA). The study begins by discussing SSA's progress on poverty. Next, it presents data on how various African countries have fared in terms of the incidence of poverty relative to other countries, with special emphasis on the period since the mid-1990s, when SSA generally experienced a growth resurgence. The paper then decomposes performance on poverty into changes in income and inequality for a sample of SSA countries that have the requisite data. The paper finds that recent progress on poverty has been considerable, in contrast to the earlier, 1980–early 1990s, period. Compared with the progress in a global sample of countries, however, progress has been mixed: nonetheless, although African countries lag behind the Brazil, India, China and Russia group of countries as a whole, many of them have outperformed India. Furthermore, while income growth is found to be the main engine for poverty reduction in SSA in general, the role of inequality is crucial in certain countries. Viewed in a global context, moreover, the low levels of income have inhibited the effectiveness of income and inequality improvements in reducing poverty in many African countries.