Poverty has declined in Africa – US researchers

A new report that claims that poverty rates have fallen dramatically in Africa over the past decade has led to a fierce debate in academic circles in the West.

The report by two US-based academics working for the National Bureau of Economic Research contradicts the projections of both the United Nations and the World Bank who say that sub Saharan Africa is unlikely to hit its Millennium Goals target of halving the number of people living on $1 a day or less by 2015.

The two academics — Maxim Pinkovskiy and Xavier Sala-i-Martin — say that in the 10 years before the world economic recession caused by the credit crunch, not only did poverty rates fall across most African countries, but rates of inequality also fell.

“Our results show that the conventional wisdom that Africa is not reducing poverty is wrong,” the academics argue. “In fact, since 1995, African poverty has been falling steadily.

“Moreover, contrary to the commonly held idea that Africa’s growth is largely based on natural resources and helps only the rich and well-connected, we show that a great deal of this growth has accrued to the poor.”

Some UK-based economists think however that the report’s statistics are based on false promises.

Surveys

Writing in the Guardian newspaper, Stefan Dercon of Oxford University said that the US-based authors placed too much weight on government statistics such as GDP and ignored other data.

“They believe the evidence that most of us would least trust and throw away the evidence we tend to think is fairly accurate,” he said. “Household consumption and income surveys give us a detailed picture of whether there is massive enrichment or not. Unfortunately, the evidence for Ethiopia, where I have been doing this for years, doesn’t show massive improvement.”

Few doubt the evidence that African economies showed substantial growth rates since the early 1990s until the current economic recession began.

What seems to be a matter of debate is whether or not this growth had benefited everyone or only the rich elite.