Africa’s Infrastructure: A Time for Transformation, the inaugural report in the Africa Development Forum series in 2010, was the fruit of an unusual confluence of circumstances. Seldom have donors put such a solid funding base behind primary data collection and analytical work on infrastructure, seldom has World Bank management been able to dedicate such significant human resources over a multiyear horizon to study these issues, and seldom has an infrastructure knowledge project brought together such a broad coalition of stakeholders including the key regional bodies in Africa. The catalyst was the high level of political commitment on African infrastructure made at the G8 Gleneagles Summit in 2005 based on the background work conducted for the Blair Commission Report on Africa.
Africa’s robust annual economic expansion of 4.5% during 1995-2013 has come along with appreciable progress in human welfare. African newborns can now expect to live 6.2 years longer than in 2000, the prevalence of chronic malnutrition among children under five declined by six percentage points, and the number of deaths of violent events dropped from 20 (in the late 1990s) to four. Africans are also more empowered, manifested, among others, through greater participation of women in household decision making.
At the same time, for every five adults, two remain illiterate, life expectancy still only stands at 57— 10 years less than in South Asia – and the number of violent events has been on the rise again since 2010. The human development challenge remains substantial. Moreover, despite being a major force behind Africa’s growth renaissance, citizens in resource-rich countries did not experience a commensurate jump in their education or health status. On the contrary, results from the World Bank’s recent Africa Poverty Report “Poverty in a Rising Africa,” suggest that it is especially resource-rich countries which are bad at converting their economic fortunes into better human development.
Africa’s remarkable economic growth has been accompanied by the concern that the benefits of the economic growth are not shared broadly. Growth may only go so far; when inequality and lack of social mobility persist, children are effectively born disadvantaged.
There have been gains in schooling in the region. Data from the UNESCO shows that the primary adjusted net enrollment ratio increased from 59% in 1999 to 79% in 2012. Education is becoming more inclusive, but that doesn’t mean African children have an equal chance.
One way to view whether educational opportunities are becoming more equal across children is to look at “education mobility” between generations. Does the next generation of children have more educational mobility than their parents? In Poverty in a Rising Africa report, we investigate trends in the intergenerational transmission of education over 50 years. This work draws on two indicators of mobility traditionally used to access such mobility: the intergenerational gradient and the correlation coefﬁcient between parents and children years of schooling. The intergenerational gradient is simply the regression coefficient of parents’ education as a predictor of children education. It measures intergenerational persistence--a lower the value indicates more intergenerational mobility. The correlation between parents and children years of schooling shows how much of the dispersion in children's education is explained by parental education -- a lower value also indicates more intergenerational mobility.
In 2016, the world faces uncertainty and volatility – as well as huge opportunities for significant progress. Africa stands not just to gain from these major shifts, but also to lead some of them.
The global landscape is certainly challenging, with the political and economic news dominated by slowing growth, rocky stock markets, falling commodity prices, risks in emerging markets (especially China), increasing numbers of refugees, geopolitical tensions and the threat of violent extremism.
Inequality is typically measured at the country-level. “Poverty in a Rising Africa,” the latest World Bank Group Africa poverty report, does not find a systematic increase in inequality - the number of countries showing an increase of within-country inequality is the same as the number of countries showing a decrease. As the report notes, these findings come with the important caveat that the survey instruments used to measure household consumption expenditure are not good at capturing the very rich.
This also leave the question whether the conclusions would change when we ignore national boundaries and look at inequality among all African citizens instead. Doing so puts the disparities that exist within African countries into context with the disparities that exist within the region as a whole, akin to the interpersonal global income distribution. Such a perspective on inequality comes naturally to an international organization as the World Bank.
Safety nets have the potential to play an important role in protecting the well-being of poor and vulnerable households in Sub-Saharan Africa. In the world’s poorest region—and also one of the most unequal—targeted social program transfers are an effective way to fight poverty and ensure shared prosperity. But social safety net resources are limited and identification of households with the greatest need is difficult in most African countries. Evidence of effective safety net program targeting is needed to justify using existing resources, to gain support for additional investments, and to guide country efforts to improve social safety net coverage of both long-term (chronic) poor and short-term (transient) poor households.
Concerns about South Africa’s economy have been rising, after years of slowing growth following the post-financial crisis peak of 3.2% in 2011. South Africans lament the plunge of the Rand—a 30% depreciation against the U.S. dollar over the year 2015. They fear the potential of South Africa losing its high-prized investment grade credit rating. Many, especially the youth, live with high and largely chronic unemployment, currently at 25.5%, or 36% when including those who have given up looking for a job. Not surprisingly unemployment is the top concern for 72% of South Africans according to the 2015 Afrobarometer. Growth and job creation are crucial for sustaining the impressive economic and social progress the country has achieved since the end of apartheid—and to eliminate extreme poverty by 2030, as envisioned by the National Development Plan (NDP).
It is widely known that, compared to other continents, poverty rates are particularly high in Africa. Somewhat less appreciated is that inequality within countries also tends to be high. “Poverty in a Rising Africa,” the latest World Bank Africa poverty report, shows for example that seven out of the world’s 10 most unequal countries are African, with the country Gini indexes ranging from 0.31 (Niger) to 0.63 (South Africa) (with zero implying perfect equality and one, perfect inequality).
However, not only the level of inequality matters, but also the reasons behind it. Unequal outcomes may result from both differences in opportunities as well as differences in effort. There is also growing evidence and consensus that it is especially the former, which is pernicious for development. Rewards by effort may incentivize people. Yet, when welfare mainly differs because of differences at birth (such as gender, ethnicity, or parental background) or, more generally, because of factors beyond the individual control, it tends to be especially detrimental for economic growth and social harmony.