Few countries can match Cabo Verde’s development progress over the past quarter of a century. Its Gross National Income per capita (GNI) grew six-fold. Extreme poverty fell by two-thirds from 30% in 2001 (when poverty measurement began) to 10% in 2015 (see first chart) which translates into an annual poverty reduction rate of 3.6%, outperforming any other African country during this period. Non-monetary poverty also dropped fast (see second chart). In many ways, Cabo Verde is a development star, and these achievements were made despite the disadvantage it faces as a small island economy in the middle of the Atlantic.
In the Africa Chief Economist’s Office, we seek to generate knowledge on key development issues around the continent. We also host the Gender Innovation Lab, which – as the name suggests – specifically generates evidence on how to close the gender gap in Africa. Over the course of 2018, we’ve produced a range of products (regional reports and updates), but we also produce academic articles and book chapters seeking to answer key, specific development questions.
The impact of growth on poverty in Ghana has slowed substantially over the years. Ghana’s largest fall in poverty, 2% a year, was experienced during 1991–1998. Between 2012 and 2016, the poverty rate declined by only 0.2% per year. The growth elasticity of poverty (percentage reduction in poverty for each percentage point in economic growth) has decreased, from −1.18 between 1992 and 1998 to −0.07 between 2012 and 2016. This may reflect the declining contribution of agriculture, in which the majority of poor households are engaged, the limited job opportunities for higher productivity in the services sector, and a largely capital-intensive industrial development.
For the past few years, I have been fortunate enough to be the World Bank’s resident economist for Mauritius and Seychelles. With this now coming to an end, here are some especially striking impressions of these countries’ successes and challenges that I hope can provide food for thought more widely.
Natural disasters—such as droughts, floods, landslides, and storms—are a regular occurrence, but climate change is increasing the frequency and intensity of such weather-related hazards. Since 1970, Africa has experienced more than 2,000 natural disasters, with just under half taking place in the last decade. During this time, natural disasters have affected over 460 million people and resulted in more than 880,000 casualties. In addition, it is estimated that by 2030, up to 118 million extremely poor people (living below $1.25/day) will be exposed to drought, floods, and extreme heat in Africa. In areas of recurrent disasters, this hampers growth and makes it harder for the poor to escape poverty.
Of the 1.4 billion people living in extreme poverty, the vast majority resides in rural areas, relying on smallholder agriculture as a source of income and livelihood. Agricultural labor statistics are needed to study some of the most pressing issues in development: how households earn income, the factors driving urbanization, the causes of un- and under-employment, the constraints to growth in Sub-Saharan Africa, and, in the big picture, understanding the potential for structural transformation. And, as climate change continues to impact smallholder farming outcomes, collecting quality data is even more important as we think ahead to interventions that promote climate-resilience for family farmers.
The challenges faced by small farmers are similar across the developing world – pests, diseases and climate change. Yet in Africa the challenges are even greater. If farmers are to survive at current rates (let alone grow), they need to have access to high-yielding seeds, effective fertilizers and irrigation technologies. These issues threaten the region’s ability to feed itself and make business-growth and export markets especially difficult to reach. Other factors include the rise in global food prices and export subsidies for exporters in the developed economies, which leave African farmers struggling to price competitively.
Climate change and food insecurity could shape Africa’s future.
I already see evidence of this during my travels across Sub-Saharan Africa, where high levels of poverty, highly variable and unpredictable weather, limited livelihood options, weak infrastructure, insufficient access to productive resources, and scarce safety nets all combine to make Africans even more vulnerable to climate risks.
Why does this matter, and what does it mean for the World Bank (WB), and the Africa Region in particular?