Emerging Africa South of the Sahara and the reduction of extreme poverty: Ghana is leading, the others are lagging!


The emerging countries of Africa have been on the spot since the beginning of the new millennium. With their relatively high rates of economic growth and social-political stability, these countries have been able to attract the foreign direct investment. For many specialists however, the concept of “emerging economies” has less meaning if it remains only connected to the exogenous parameters (transfer of technology-direct – foreign trade International investment). The economic emergence should normally be source of job creation and thus reducing unemployment. In a word economic growth should have a positive impact on the reduction of poverty. 

In this analysis we have tried to focus on the policy of reduction of extreme poverty for a group of emerging countries in Africa (PEAS – country emerging from Africa South of the Sahara. Our analysis extends over five non oil producers African countries South of Sahara, namely Ghana, Mozambique, Tanzania; Burkina Faso, and Ethiopia. Ethiopia is added to the list because of its extraordinary economic growth rate that was around 8.4 between 2000 and 2010. The Mozambique made his entry in the group with 7% of average growth of the GDP over the last 10 years.

  Real GDP Growth rate

2000-2010

MPI (Multidimensional Poverty Index) in headcount(H)

2008-2010

PPP $1.25 a day in (%)

2008-2010

Progress towards the reduction of poverty  according to the MDG 2010/2015
Burkina-Faso 5 82 57  Very slow
Ethiopia 8.4 90 39  Very fast
Ghana 6.7 30 30 Goal is reached
Mozambique 7 80 75 Very slow
Tanzania 7 65 88.5 No progress

 

According to our table, between 2000 and 2010 Ethiopia is the country from the list with the strongest GDP growth (8.4%). This strong growth of GDP was associated with the index of monetary poverty of 39%, which is the lowest after that of Ghana (30%).   The Multi-dimensional Poverty Index reaches 90% of the population. In other words nearly 90% of the population between 2008 and 2010 do not have a high living standard, have difficulties to obtain a good education and basic medical care. Economic growth could not be translated into social gain for the population.  There is therefore a serious problem of allocation and access to social resources in Ethiopia.  

In the case of Tanzania, 7% average growth in a decade failed to significantly reduce poverty.  In this country 88.5% of the population is living below a $ 1.5/day.  There are 65% which are poor in terms of access to education; to health care.  In General a high rate of poverty in terms of income is related to a high rate of MPI. Here there is a contrary effect.  The Tanzanian Government was able to thwart the monetary poverty by putting a good social policy. This is not surprising when we know that international aid was earlier oriented in the social sector of this former socialist nation. The multidimensional poverty rate (65%) is the second lowest after that of Ghana (30%).

Ghana and Mozambique reveal a very interesting case. Ghana is the only country in the list to achieve not only a low poverty in monetary terms (30%) but also a low level of multi-dimensional poverty (30%). The benefits of the long period of economic growth have helped to reduce both the monetary poverty rate and the rate of MPI.

 Mozambique offers a picture of more staggering poverty with a growth rate of 7%.  The level of poverty both in terms of income reached 75% and 80% for multidimensional poverty. Strong economic growth had not in fact results from the reduction of extreme poverty.  As explanation, one could mention the Mozambique fate of a long war of independence. The weather also has a role to play in the explanation of poverty. Frequent periods of flooding indeed destroy agricultural production, thereby increasing rural poverty.

In Burkina Faso 57% of the population is living under 1.25 Dollars per day. Multidimensional poverty reached 82%. The decline in the economic growth of 5.8 in 2008 to 3.2 in 2009 is not a good sign for the fight against poverty. Social protests being held currently show indeed a social “malaise” in Burkina Faso.  

According to our analysis, Ghana is the only country where economic growth has considerably reduced the level of poverty.  Other countries, despite various patterns are lagging in the fight against extreme poverty.

 Francis KONAN, Economist graduated from the University of Economics and management in Vienna (Austria), the Institute of advanced studies, Vienna (Austria) and the Faculty of science economics & management of the University of Abidjan (Côte-D’ivoire)

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