A new World Bank report has revealed that Africa could play host to 87 percent of the world’s extremely poor population by 2030, an increase from the current 60 percent, if no significant reforms were made.
The report stated that unequal access to jobs, finance, and public services such as education and healthcare has increased inequality, hindering poverty reduction in the region.
The report entitled, ‘Leveling the Playing Field: Addressing Structural Inequalities to Accelerate Poverty Reduction in Africa,’ released on Wednesday, explained that structural inequalities based on birthplace, ethnicity, gender, and parental background as well as market and institutional distortions create advantages for a few and disadvantages for many.
According to the report, this has resulted in Africa ranking as the world’s second most unequal region after Latin America, and the only continent where extreme poverty reduction has stalled in recent years.
While the region today hosts 60% of the globe’s extremely poor population, this share could rise to 87% by 2030, without significant reforms.
“The report suggests that poverty reduction strategies should focus on broadening opportunities.
Highlighting instances, the report said beginning from the early 2000s, Ethiopia expanded land user rights that helped promote investment in agriculture. In Kenya, market-friendly financial products like mobile money helped to boost financial inclusion and households’ ability to cope with shocks.
In Ghana, World Bank’s report explained that investments in primary education led to increases in completion rates, while partial market liberalization of the cocoa sector, along with investment in research, disease control, and credit programs, led to increases in agricultural incomes.
There is nothing inevitable about structural inequalities. As successful country examples show, barriers to opportunities can be removed and replaced with well-designed policies that allow people to build their productive capacities and open access to jobs and markets,” said Nistha Sinha, co-author of the report.
The bank’s report said the region had struggled to transform economic growth into poverty reduction due to inequality, adding that many people are born into circumstances that severely limit their future opportunities.
“For example, children from the poorest 20% of the population are least likely to finish school on time, and on average, only 32% of poor households have access to electricity, compared to nearly 70% for non-poor households. These differences are compounded by market and institutional distortions that prevent people from reaching their productive potential, perpetuating cycles of poverty, with poor young people forced into low-paying, insecure jobs in the informal sector,” the report further said.
To address the imminent structural inequalities, the report outlined four areas of priority: “Strengthening economic and institutional foundations to eliminate competition barriers and safeguard property rights; investing in education, health, and infrastructure to build productive capacity; enabling markets to create jobs by improving access to capital, technology, and markets; using government resources fairly through progressive taxation and efficient public spending.”
“These policy priorities should not be seen in isolation, but as overlapping and mutually reinforcing—creating a level playing field while at the same time enhancing the region’s productive capacity,” said Gabriela Inchauste, co-author of the report.
By tackling structural inequalities, Sub-Saharan Africa has the potential to unlock inclusive growth, reduce poverty, and create opportunities for millions of people
