Economic growth in sub-Saharan Africa remains strong, with growth forecast to be 4.9% in 2013, but poverty and inequality remain ?unacceptably high and the rate of reduction unacceptably slow?, the World Bank has said.
In the latest edition of Africa?s Pulse, a twice-yearly analysis of the issues that are shaping Africa?s economic prospects, the bank said a faster reduction of poverty in sub-Saharan Africa will require growth with equity.
Speaking to journalists from selected African countries via a video conference, the bank?s Deputy Africa Regional Chief Economist, Francisco Ferreira, said in the last decade Africa grew faster than most other regions but there has not been a corresponding reduction in poverty.
?Growth with equity is possible, but it requires a decline in inequality of both outcomes and opportunities,? he stressed, calling on African countries to pay particular attention to areas like agriculture where the poor are concentrated.
The World Bank considers as being below the poverty line people who spend under US$1.25 a day — and Africa is said to have a majority of these people.
Indeed, the bank notes that 16% of the world?s poorest people will be in Africa by 2030 if nothing dramatic happens about the poverty situation on the continent.
Social safety nets like direct cash transfers to the most vulnerable segments of society, Mr. Ferreira said, have proved to be impactful where they have been employed.
The Bank itself is considering redirecting its investments in Africa to more poverty-reducing areas, in line with its concern that the spoils of macroeconomic growth are not trickling down to the poor.
Economic growth in sub-Saharan Africa has been praised in many quarters in recent times: almost a third of countries in the region are growing at 6% and more.
Rising private investment in the region, including remittances worth US$33billion a year, will push GDP growth to pick up to 5.3% in 2014 and 5.5% in 2015, the bank said.
It warned, however, that external factors like falling commodity prices, disorderly interest rates, as well as domestic risks like conflicts and droughts could be drawbacks.
Countries like Nigeria and Angola, which are almost exclusively reliant on one resource ? oil — are likely to feel the impact of falling commodity prices most, Punam Chuhan-Pole, the bank?s Lead Economist for the Africa Region and author of Africa?s Pulse, said while calling for more diversification in such countries.
On Ghana, Punam said the high level of public borrowing and debt needs a lot of attention since it could derail gains made so far.
?The problem facing the country is to be able to improve the macroeconomic management of the country so as to bring down the size of the deficit in the current account as well as inflation,? she said.
By Basiru ADAM and Richard Harrison