UNDP decries rising inequality in Africa

Saturday November 2 2013

By Xinhua

The United Nations Development Programme has decried the growing income inequality in Africa, saying that economic growth has still not benefited large segments of the population.

“Data indicates that the gap between the rich and poor is increasing even as the continent records high economic growth rates,” said UNDP Africa region deputy director Gerd Trogemann on the sidelines of the G20 Inclusive Business Workshop last week.

The two-day event brought together over 200 participants to review ways of scaling up inclusive business growth models in Africa.

Mr Trogemann said that Africa still has a huge informal sector whose contribution to the economy is not adequately captured. “As a result, most nations have a relatively small tax base,” he said.

The director said that the ability of the informal sector to access markets and information is limited. He urged national governments to create an environment that will allow the private sector to expand.

Mr Trogemann called for the continent’s private sector to support efforts to achieve inclusive growth.

“They should reduce poverty even as they pursue profit,” he said. He added that some sectors in Africa, especially services and manufacturing are getting stronger.

“Unfortunately, a lot of the continent’s commodities are still exported in their raw form. This denies Africa revenue through value addition,” said Mr Trogemann.

Strong economic performance

The African Union Commission for Economic Affairs commissioner Anthony Maruping said the continent has achieved impressive economic performance in the past decade. “As a result, most of its countries are joining the league of frontier and emerging economies,” said Mr Maruping.

“We are advising governments to ensure that their citizens benefit from the growth,” he said. “They must find a sustainable way of engaging the low income segments in order to tackle poverty,” he added.

“Governments should not just focus on growth figures but also on the human development index,” he said. African Development Bank director for East Africa Gabriel Negatu said that Africa consists of developing economies that have huge untapped wealth. 

Negatu said that African nations should ensure that their private sector builds inclusive businesses so that the region can unlock its potential.