OREANDA-NEWS. May 28, 2015. For a continent which has consistently posted robust economic growth in the past decade, recent reports that the continent is the bastion of inequality recording 42.6 on the Gini Coefficient Index (a standard measure of income equality) is quite disturbing.

Trends in inequality in African and other developing countries

“Africa is the world’s second-most-unequal continent after Latin America. Six of the ten most-unequal countries are in Africa,” the African Development Bank Group (AfDB) said in its 2014 Annual Report released on Wednesday, May 27 at its Annual Meetings in Abidjan, C?te d’Ivoire.

The report provides evidence suggesting that rich Africans, who account for less than five percent of the population, hold about 20 percent of total income while the poor who account for 60.8 percent of the population own 36.5 percent of the continent’s total income.

According to the GNI, the 10 most unequal countries in the world are: South Africa (65), Namibia (61.3), Botswana (60.5), Zambia (57.5), Honduras (57.4), Central African Republic (56.3), Lesotho (54.2), Colombia (53.2), Brazil (52.7) and Guatemala (52.4).

The AfDB acknowledges that while Africa has grown at an unprecedented pace in the past decade, the benefits of the economic resurgence have not been broadly shared. Instead, growth has been concentrated in particular sectors or geographical areas within countries, excluding large sections of people.

It argues that growth must be more inclusive in order to lift the majority of Africans out of poverty by creating employment opportunities through a better business and investment climate that enables the private sector to thrive; and connecting remote areas to growth poles through better infrastructure and deeper regional integration within countries and across national borders.

In addition, effective transformation of Africa’s natural wealth into created wealth, including building human capital and skills and addressing climate change to ensure a smooth transition towards an environmentally sustainable growth path, would further promote inclusive growth.

The AfDB defines inclusive growth as economic growth that results in a wider access to sustainable livelihood opportunities for a broader number of people, regions, or countries, while protecting the vulnerable, all in an environment of fairness, equity, and political plurality.

These concerns were addressed in the Bank’s 2013-2022 Ten Year Strategy which focuses on infrastructure development, regional economic integration, private sector development, governance and accountability, skills and technology as the main channels through which the ban will deliver its work and improve the quality of growth in Africa. It will also seek new and creative ways of mobilizing resources to support Africa’s transformation, especially by leveraging its own resources. Wider use of public-private partnerships, co-financing arrangements and risk-mitigation instruments will also attract investors.  

President Donald Kaberuka put the inclusive growth orientation of the strategy in perspective, saying, “In a decade of seismic shifts in the global economy, Africa has defied the pessimists and experienced significant growth. That economic growth must now translate into real economic transformation, which will bring jobs and opportunities to its citizens. That is what makes the next decade so decisive, and the African Development Bank’s Strategy for 2013 to 2022 so vital”.

Recent Bank operations that impact inclusive growth

Project

Objective

Malawi - Local Economic Development Project (LED)

Contributing to socio-economic inclusion by overcoming spatial barriers to economic opportunities. Provides infrastructure inputs and support services for micro and small enterprises engaged in agro-processing and other productive economic activities in four selected rural growth centres.

Senegal - Inclusive Growth and Economic Competitiveness Support Program (PACICE)

Create conditions that support sustainable and inclusive economic growth by mainstreaming gender dimensions into economic and financial governance, and providing support to private-sector development.

Zambia - Strengthening Climate Resilience in the Kafue Basin

Agricultural production systems emphasizing diversification in agriculture and natural resources, and technological innovations at the community level.

Uganda -

Kabale-Kisoro-Bunagana/Kyanika Road Project

An all-weather access road for the supply of farm inputs and evacuation of produce to major market centres. On Uganda’s borders with the Democratic Republic of Congo (DRC) and Rwanda; has significantly reduced transport costs and travel time, while promoting regional integration with DRC and Rwanda..

Tunisia Souk At-tanmia Partnership Project

Supports the creation of micro, small, and medium-size enterprises nationwide thereby contributing to the development of a dynamic and productive private sector

To download the full report: http://www.afdb.org/en/knowledge/publications/annual-report/