Poverty in Africa

The world's second-largest continent, Africa has an area of 11.7 million square miles (30.3 million square kilometers). North and sub-Saharan Africa are divided by the Sahara, a desert with a land area greater than that of the continental United States. Sub-Saharan Africa, the larger region of the continent, was home to an estimated population of 1.136 billion people in 2020. North Africa is similar in many dimensions to countries in the Middle East and is often grouped with that geographic area in international analyses.

Poor African countries exist, but poverty also exists in wealthy African countries, with wide inequalities between people—notably in resource-rich Africa. Absolute or extreme poverty is defined as severe lack of basic needs such as food, clean water, shelter, and health care. The World Bank has defined the international extreme poverty line in dollar terms as $1.90 a day at 2011 prices (specifically, purchasing power parity, or PPP); according to World Bank estimates, while poverty rates worldwide dropped from 35.9 percent to 9.3 percent between 1990 and 2017, extreme poverty rates in Africa only fell 14.7 percentage points, from 55.1 percent in 1990 to 40.4 percent in 2018. In addition, the continent's total population increased rapidly during that time, resulting in the number of people in extreme poverty not decreasing but rather increasing by more than 130 million people. According to World Bank estimates in 2020, in 2017 an estimated 689 million people, or 9.3 percent of the world's population, were living below the international extreme poverty line; more than half of those people—430.8 million—lived in sub-Saharan Africa, accounting for about 40 percent of the region's total population.

Background

Many African countries have severe problems that make eradication of poverty difficult. Some argue that the problem is an internal one that governments can solve by reallocating resources and that outsiders should not interfere. In 1998, Indian economist Amartya Sen received the Nobel Prize for his work on poverty and famine. A key finding was that famine is not always due to lack of food but is also caused by social and economic factors. Poverty can be attributable to how a society allocates its wealth rather than to the overall amount of wealth in the country.

The roots of African rural poverty lie in the colonial system that disrupted local governance structures, extracted and exploited the natural and human resources for the colonizers' benefit, and imposed institutional restraints on the local poor. By 1950, only four African countries had their own independent governments. Broadly speaking, the lack of strong democratic traditions and legal systems contributed to bribery and corruption, government instability, and in some cases, authoritarianism in African nations after they gained their independence in the mid twentieth century.

Another contributor to poverty has been illness. For instance, the prevalence of HIV and AIDS has strained households whose only asset is their labor. According to data from the Global Change Data Lab, of the estimated 3.68 million people in the world living with HIV/AIDS by the end of 2017, 2.59 million lived in sub-Saharan Africa; it also accounted for nearly 10 percent of deaths in the region that year. Maternal mortality is another significant problem that deprives countries of labor.

Average income in Africa has risen since the mid-to-late twentieth century, but not evenly. Progress has been visible in countries where economic growth has generated improved living standards, education, and health. Other countries are still not free of their colonial legacies, remain stuck in warfare, or have otherwise not enjoyed the stability necessary to grow economically. By the early 2020s, twenty of the region's governments were designated as "fragile" or embroiled in conflict, while another thirteen had small populations and limited land.

Changes in economic policy and institutional structure have dismantled rural systems, sometimes without replacing them. As economies transition to modern ones, rural areas remain stagnant, with low incomes, low production, and increasingly at-risk poor people. Small-scale African enterprises often lack access to markets, and the isolation of rural people limits access to social safety nets and antipoverty programs, as government programs increasingly favor urban over rural residents. Some analysts also believe that African economies have over-relied natural resources to stimulate growth rather than invest in agricultural output and rural development, which could build domestic markets.

Market-based allocation of resources prices the poor out of the market. Governments have to subsidize water, education, and electricity. However, government intervention can also lead to corruption, inefficiency, and resources failing to reach those in need.

Among the other hurdles to resolving extreme wealth inequality in African countries are regressive tax structures, monopolies or insufficient competition, gender inequality, underinvestment in domestic and regional supply chains and small-scale agriculture, and high levels of national debt.

Overview

More than 80 percent of sub-Saharan Africans experiencing extreme poverty live in rural areas and depend agriculture for livelihood and food. As of 2012, Central Africa had the highest percentage of poverty, both urban and rural, of all African regions. In East, West, and Southern Africa, urban poverty had been halved, or almost halved, since 1996, while in West and Southern Africa, rural poverty declined about 40 percent during the same period. Despite an average poverty rate reduction of nearly 15 percentage points from 1990 to 2017, poverty reduction in Africa has been significantly slower than in other developing regions, and due in part to the high rate of population growth, the number of Africans living in poverty increased from 278 million in 1990 to 413 million in 2015.

The majority of investment in sub-Saharan Africa in 1990 came from official development assistance (ODA) funds. Between 2009 and 2016, by contrast, ODA to Africa constituted 2.4 percent of the gross domestic product there while 2.8 percent came from remittances, 2.5 percent from foreign direct investment, and 1.2 percent from portfolio inflows, according to the report Africa's Development Dynamics 2018. Despite increased investment and tourism, however, poverty and inequality continue at high levels.

In 2021 nearly three-quarters (thirty-three of forty-six) of the countries designated “least developed” by the United Nations—those with the lowest gross national incomes per capita, health and educational barriers to development, and high economic and/or environmental vulnerabilities—were in Africa. Although African economies, combined, had experienced an unusually high annual growth rate of 4.7 percent from 2000 to 2017, more than four in ten sub-Saharan Africans (41 percent) still lived in extreme poverty in 2017. Moreover, efforts to contain the coronavirus disease 2019 (COVID-19) pandemic in 2020 caused the first economic recession sub-Saharan Africa had seen in a quarter century a few years later. Recovery was expected to be slow, and much of the world’s poor were still predicted to live in sub-Saharan Africa by 2030, particularly in the fragile states of Nigeria and Democratic Republic of the Congo. Nonetheless, poverty reduction strategies continue, and even in the poorest regions, new clinics and roads have been built, among other improvements, however small.

In addition to these numbers of people living in poverty, the populations of African countries increased significantly at the end of the twentieth and the beginning of the twenty-first centuries. The World Bank reported in 2019 that Africa had a total fertility rate of 4.8 births, higher than any other continent, and an annual population growth rate 2.7 percent. Lack of access to family planning, lower female educational attainment, and higher rates of child marriage are thought to contribute to that higher-than-average total fertility rate. Projections for future populations of African countries suggest that such growth will continue. If population growth is not curbed or the economy has not improved, many African countries could find increases in poverty, despite economic growth overall.

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