Africa records drastic decline in poverty levels

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Africa’s efforts to drastically reduce poverty paid off over the last one decade, as a result of consistent upwards economic growth, which exceeded the slow growth reported in the early 1980s to mid 1990s, a new World Bank study shows.

The study, released by the World Bank on Thursday, shows that economic growth in Africa offers the continent its surest way out of poverty as has been demonstrated by several states, including Botswana and Ethiopia, the latest entrants into the list of economic successes.

Africa’s poverty rate of 50% is shown to be the same in 1981 and 2005: this is because poverty worsened between 1981 and 1996, a period of slow or negative growth on the continent.

World Bank Chief Economist for the African Region Shantayanan Devarajan said the report tells a global story about the numbers of poor people.

He said the report should not be used to judge if poverty in a particular country has improved or deteriorated in the 1981-2005 period.

“What is more important is to look at national poverty lines,” said Devarajan. “This will better answer the question of how poverty in a particular country has changed over time.”

Africa’s economic fortunes, however, changed in 1997, when economic growth started to pick up and poverty rates fell significantly – by over 7%, from 57.5% to 50.4% – and much faster than in South Asia, for example, which saw stronger economic growth during the same period.

“The challenge of lifting people out of poverty is daunting and will only be met if economic gains are shared widely,” the bank said in a statement accompanying the report.

At the same time, recent increases in food and fuel prices, the effects of climate change, the impact of HIV/AIDS and other exogenous factors, threaten to unravel any gains made, it noted.

Poverty rates in Sub-Saharan Africa have been steadily declining over the last 10 years according to the study.

The bank has also set up a new poverty line of US$1.25 a day to reflect improvements in internationally comparable price data.

As a result of this, the bank estimates that 1.4 billion people in the developing world lived below that threshold.

The study emphasises the magnitude of the task ahead, the bank said.

“The recent estimates of global poverty also show that Africa can reduce poverty if it commits itself to meeting the challenges ahead, as it has in the past decade,” the report said.

The depth of poverty is greater in Africa than other regions – the mean consumption of the poor is lower than any region, at around 70 cents per day in 2005, using the US$1.25 poverty line.

The World Bank said improvements in the depth of poverty in Africa were also encouraging, with Africa registering an overall improvement of more than 15% since 1990, from 24.6 percent to 20.8 percent.

The paper, produced by the Development Research Group and titled “The developing world is poorer than we thought, but no less successful in the fight against poverty”, cites a doubling in the number of poor people in Africa between 1981 and 2005, from 200 to 380 million.

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