As the impending target date for the Millennium Development Goals (MDGs) draws closer, the international development community has already commenced exploring the integral concepts and issues that will help shape the post-2015 global development agenda. Accordingly, logic dictates that any constructive discourse requires a thorough examination of the MDGs. An examination of previous analyses suggests that the first MDG aimed at eradicating extreme poverty and hunger is at the forefront of the global development agenda. However, while some countries are experiencing more success than others, the overall picture suggests that despite high levels of economic growth (since the early 1990s), a corresponding decline in poverty and hunger is yet to transpire in Africa. The commensurate challenge confronting various African governments is how to significantly reduce poverty and hunger while still maintaining rapid levels of economic growth.
Globally, the number of people living on less than $1.25 a day has decreased from 1.91 billion in 1990 to 1.29 billion in 2010. The situation, however, is still somewhat bleak for Africa's most impoverished inhabitants. While levels of poverty are gradually waning − with the proportion of Africans living on less than $1.25 a day declining from 56.5% in 1990 to 52.3% in 2005 and 47.5% in 2008− the total number of Africans surviving on less than $1.25 a day has increased from 289 million in 1990 to 385 million in 2008 − making Sub-Saharan Africa the only region where the number of people facing extreme poverty has increased. Across the continent, poverty is predominantly a spatial phenomenon. Despite reduction of poverty in rural areas by 5.1% from 1998 to 2008, roughly 62% of African rural dwellers still live below the poverty line − nearly double the average for all developing countries. For the most part, women bear the brunt of poverty − where for example women are 2- 4 times more likely to fall below the poverty line than men in Cameroon, Kenya, Cote D'Ivoire, and Senegal.
Regarding the fight against hunger, Sub-Saharan Africa is exhibiting mixed levels of progress. Overall the proportion of children under-five who are malnourished has declined from 29% in 1990-1992 to 27% in 1995-1997, 25% in 2002, and 22% in 2006-2008. To a lesser extent, the proportion of the total population that fell below the minimum level of dietary energy consumption has diminished from 31% in 1990-1992 to 27% in 2006-2008. While progress has been made, the progress is too sluggish to reach the target of halving hunger by 2015. Perhaps more worryingly, the total number of food-deprived people in Africa has increased from 166 million in 1990-1992 to roughly 218 million in 2006-2008− a 31% increase as opposed to the required 50% decrease.
Further disaggregation of the above indicators at the country level reveals that various countries are in fact on track to either halving the level of poverty, or halving the level hunger, by 2015. Ghana, the Democratic Republic of Congo, Nigeria and Mali are among the countries on course to halving the proportion of people who are food insecure. Conversely, Senegal, Uganda, and Mauritania are among the countries which appear to be on course to halving the proportion of the population living below the poverty line. Ghana, however, appears to be the only country on track to meeting both poverty and hunger targets. Of significant importance, while Nigeria experienced a vast decrease in the proportion of people who are under-nourished, there has been an increase in the proportion of people living below the poverty line. Despite high levels of poverty reduction, Uganda has experienced an increase in the relative number of people who are undernourished. These issues pose serious questions to mainstream economic logic− as a decrease in one indicator should entail positive spill-over effects in the other, and vice versa. Ostensibly, the nature of poverty and hunger facing Africa is inherently complex− and there will be no quick fixes.
The causes of poverty and hunger are context specific and depend on the contingent conditions of each country as well as the exogenous forces of the global political and economic situations. The reasons vary from high population rates, high levels of inequality, political instability and conflict, institutional defects, inconsistent economic growth, governance weakness and poor weather conditions. Lofty levels of inequality help explain why poverty and hunger remain persistently high despite considerable growth. Inequality in the allocation of assets, for instance land or the distribution of public services, is detrimental to poverty reduction in Africa. Growing evidence shows that, in Africa, the overarching responsiveness of poverty to growth (the growth elasticity of poverty) is significantly weakened by inequality. Higher levels of equality have the potential to increase growth and can additionally increase the degree to which growth is translated into poverty reduction.
Furthermore, the lack of economic diversification helps to explain why growth has not translated into a commensurate level of poverty reduction in Africa. Principally prompted by capital intensive industries, the extractive sectors often fail to tap into local markets for value addition and generally entail virtually no positive externalities for labour-intensive sectors. As economic growth in Africa is limited to few capital intensive enclaves, the vast majority of the labour force does not accrue any benefits from such growth. For growth to be inclusive, high levels of employment must be sustained over the long-term. At present around 8% of the African workforce is unemployed and labour productivity growth remains substantially low, compared to East and South Asia. More importantly, with a lack of stable-paying jobs, approximately 70% of the African work-force is forced to turn to vulnerable forms of employment, such as subsistence activities and low-salaried self employment. More worryingly is the disparities in the work-force. For example, the youth was twice as likely to be unemployed compared to adults during the 2000-2011 period. Similarly, women are twice as likely to be unemployed as men. Roughly 85% of the female work-force was engaged in vulnerable forms of employment compared to only 70% of men in 2010. The current inadequate state of African infrastructure is also a primary bottleneck to growth. Research suggests that Africa's poor level of infrastructure lowers the continent's per capita economic growth by as much as 2% a year and further diminishes the productivity of the private sector by roughly 40%.
Yet, there are a lot of success stories in many African countries that can ultimately be leveraged to help fight poverty and hunger.
In terms of economic diversification,the countries within the East African Community (EAC) diversified their export products in the face of the recent economic crisis, which led to an unprecedented level of resilience. With an average growth rate of 7 percent, from 2005-2008, the EAC was among the fastest growing sub-regions in the world− and managed to sustain its place amidst the fast growers in 2009 with a median level of 4.7%. Moreover, this is the sub-region that has experienced some of the highest levels of poverty reduction in Africa. While many countries rely on the export of a single commodity (such as copper in Zambia) or where three commodities make up to 70-90% of all exports (as in Nigeria, Botswana and Ghana), Uganda, Kenya and Tanzania in the EAC region have ensured that the top three products of their exports merely make up 40% of total exports. Economic diversification expands employment opportunities for other segments of the population, increases resilience, and helps ensure that the benefits of growth are shared. Economic diversification also entails increasing the number of trade partners. Intra African trade remains exceptionally low, where only 10% of exports remain within the region (compared to trade within the Association of South East Asian Nations or North America which comprise roughly 60% of all exports).
As agriculture plays a crucial role in hunger reduction and roughly 70% of Africans rely on agriculture for their basic income, it is extremely important to scale up both the quantity and quality of investment in agriculture. Despite making immense progress in increasing investment to the sector since the structural adjustment period, many countries are yet to meet the Comprehensive Africa Agriculture Development Programme (CAADP) target of assigning at least 10 percent of total public expenditure to agriculture. Given that each African country has its own unique geographic context and with drastic transformations occurring due to climate change− such investments would help African countries create their own innovative methods for increasing productivity and tackling hunger, especially for small-holders who are among the most vulnerable to poverty.
Social protection policies that offer income support and consolidate the productivity of the poor can decrease inequities and can trigger inclusive growth in Africa. Currently, 5% of Africans of the working age population are privy to retirement plans, unemployment compensation and other sorts of social protection. With a mere 8.7% of GDP spent on social services, Africa is the world's region that allocates the least amount of finance to the social sectors. With a plethora of evidence demonstrating that higher investment in social services reduces poverty, inequality and informality in the labour market, there is ostensibly scope to significantly reduce poverty and hunger in Africa through enhanced social sector provisioning. Take for example Ethiopia's Productivity Safety Net Program where conditional cash transfers are provided for public works and a smaller amount of unconditional transfers are offered to those unable to work. There has been an improvement in food security (by 11%), livestock assets (by 7%) and the general ability of households to cope with crisis. Similarly, child support programmes in South Africa has not only helped feed and educate children but has allowed mothers of such children to invest their newly available time into the labour market. Rwanda's Umurenge Program offering public works, credit, and unconditional cash transfers to the most vulnerable groups has exhibited an immense decline in food insecurity and has reduced absolute poverty from roughly 40% to 10% among beneficiaries. Such programmes illustrate that with the right policy mix and international assistance, social protection is both fiscally feasible as well as beneficial to the poor and food insecure.
Targeting support to small and medium enterprises (SMEs) is crucial to reducing poverty and hunger (especially for rural women and urban youths) as they are estimated to supply 50% of Africa's employment and cover 90% of all firms on the continent. Yet, while 44% of SMEs in South America have access to credit, only 20% of African SMEs are able to access finance. A number of East and Southern African countries have experienced growth in the SME sector by making concerted efforts to enhancing the availability of credit. In Kenya and Zambia, all banks have formed departments specifically for SMEs; and the same holds true for three quarters of all banks in Tanzania. Consequently, over 50% of loans for these countries go to SMEs. In addition, Ghana has experienced vast progress by supporting the growth of small commercial banks in rural areas.
Enhancing levels of infrastructure will open up trade opportunities for SMEs, increase levels of productivity, and incentivize prospective (previously isolated) entrepreneurs to enter the market. A variety of African countries have exhibited a strong desire to address their respective infrastructural deficits through establishing and consolidating partnerships with multi-lateral and regional institutions. While $45 billion a year is currently spent on infrastructure, it is estimated that double the amount is required to prevent lack of infrastructure from being a constraint to achieving inclusive growth. Africa must begin to develop domestic financial and capital markets- this would encompass tapping into pensions, sovereign wealth funds, and insurance funds for infrastructural financing (as has been the case in Ghana, Kenya, Nigeria, and Senegal).
Dr. Babatunde Omilola is the Regional Practice Leader for Poverty Reduction and the achievement of the Millennium Development Goals (MDGs) with the United Nations Development Programme (UNDP) Regional Service Centre for Eastern and Southern Africa.
Frank van Lerven assists with research at the Poverty Practice Department at the United Nations Development Programme (UNDP) Regional Service Centre for Eastern and Southern Africa