The greatest development challenge facing Sub-Saharan Africa today is lifting 400 million of its people out of extreme poverty. The continent has abundant land and mineral resources to meet the challenge, but only if land governance can be improved. A new study, Securing Africa’s Land for Shared Prosperity, offers a ten-point program to improve land governance by accelerating policy reforms and boosting investments at a cost of US $4.5 billion over 10 years.
Next week, I will be joining World Bank Group President Jim Yong Kim and UN Secretary-General Ban Ki-moon on an historic joint visit to Africa's Great Lakes Region. The aim of the trip is to brainstorm with African leaders solutions to helping the people of the Great Lakes prosper.
This visit is important for two reasons - it highlights a new era of global institutions working together to promote stability, and it signals to the citizens of fragile and conflict affected nations our commitment: we will not leave you behind.
Many countries in today’s world have struggled, or are struggling, through war or political conflict to rebuild themselves and lift their people out of poverty. They are called fragile states, nations with poor health and education, little or no electricity, disorganized or weakened institutions, and in many cases no functioning governments. In Africa, 18 of the 48 countries in the sub Region are considered fragile, six of them so much so that UN, NATO or African Union forces are on the ground helping to keep peace.
Most of the literature about Africa’s growth, “Africa Rising”, “Lions on the Move”, etc., refer to the present or the future. An oft-quoted World Bank report said, “Africa could be on the brink of an economic takeoff, much like China was 30 years ago and India 20 years ago.”
Meanwhile, Alwyn Young has recently published a paper that claims that per-capita consumption on the continent has been growing at 3.4-3.7 percent a year for the last two decades—about three to four times the growth rates documented in other studies. Instead of using national accounts data (which, as we know, suffer from several deficiencies), Alwyn adopts the Demographic and Health Surveys (DHS), which calculate the households’ ownership of assets and other indicators of well-being (ownership of a car or bicycle; material of the house floor; birth, death or illness of a child, etc.).
My colleague Jim Kim has launched a social media campaign on what it will take to end global poverty (please send your solutions via twitter to #ittakes.) I was reminded of a blog post I did about four years ago entitled “Ending poverty in Africa and elsewhere”.
My answer then and now is: Overcome government failure. By “government failure,” I don’t mean that governments are evil or even that they are incompetent or ill-intentioned. Analogous to “market failure,” government failure refers to a situation where the particular incentives in government lead to a situation that is worse than what was intended with the intervention.
For instance, governments finance and provide primary education so that poor children can have access to learning. But if teachers are paid regardless of whether they show up for work, and politicians rely on teachers to run their political campaigns, the result is absentee teachers and poor children who don’t know how to read or write—precisely the opposite of what was intended. We see similar government failures in health care, water supply, sanitation, electricity, transport, labor markets and trade policy.
Several people, from The Economist to this blog, have been highlighting Africa's accelerated GDP growth of about 5 percent a year for the decade before the 2008-9 global economic crisis, and the two years since the crisis. But has this growth served to reduce poverty?
The latest globally consistent estimate of poverty rates has an answer: Yes.
Using the measure of people living on $1.25 a day or less, the World Bank's poverty measurement team, led by my colleague Martin Ravallion, estimates that the percentage of poor Africans fell from 58 percent in 1999 to 47.5 percent in 2008. This rate of decline of about one percentage point a year is a welcome change from the previous decade when growth was much slower and the poverty rate increased.
I felt privileged to speak to the freshman class of Princeton University, my alma mater, at the annual “Reflections on Service” event organized by the Pace Center. In my speech, I drew on my work on the 2004 World Development Report, Making Service Work for Poor People and since then in South Asia and Africa, as well as my village immersion experience living and working with a woman in Gujarat, India who earns $1.25 a day.
Both sets of experiences taught me how government programs—in health, education, water, sanitation, agriculture, infrastructure—that are intended to benefit the poor often fail to do so because they are captured by the non-poor who are politically more powerful. I suggested to the students that, in addition to getting a good education and undertaking volunteer activities, they consider using their education to inform poor people, so that they can bring pressure to bear on politicians for pro-poor reforms. The two examples I used to illustrate—citizen report cards in Bangalore and public expenditure tracking surveys in Uganda—were from the 1990s; with the penetration of cell phones in Africa and South Asia, getting knowledge to poor people in 2011 should be easier.
Today we are trying something new.
I wanted to share with you the reasons why I think we can be optimistic about Africa's development prospects, but rather than writing something up, I thought of using video.
Please, share your feedback, not only on whether you agree that Africa is on the right track, but on the video itself. If you like it, I would like to do more of this short video "Development Talks" with the readers of this blog.
Let me know what you think.
A recent paper by my colleagues Humberto Lopez and Luis Serven entitled “Too Poor to Grow” asks whether, controlling for other factors, countries with higher poverty rates grow more slowly. Their answer is “yes”. The implication is that countries with high poverty may be caught in a poverty trap—they grow more slowly, so poverty rates stay high or even increase, which means they grow even more slowly, and so on.
The idea echoes the one in Martin Ravallion’s post on this blog about why poverty rates are not converging.
The two papers got me thinking about the large number (20) of fragile states in Africa. These states have lower per-capita incomes and growth rates than non-fragile states. More importantly, many of them have remained fragile states for a long time.
Could it be that these countries are caught in a low-level equilibrium trap? And if so, should aid policy—which treats them as worse-performing versions of non-fragile states—be adjusted to take into account the possibility that these countries are “stuck” in low growth, high poverty and poor governance?
UPDATE: August 27, 2009:
Thanks to all who are taking the time to share their views on this post. Many of you seem to think that education can offer a way out of this vicious cycle. Some don't see hope for Africa until corruption can be successfully tackled. A few others advocate for more individual responsibility. I was particularly impressed by the story David Kamulegeya shared with us (see the comment titled "it is about the attitude that people have about themselves") in which he describes his own experience navigating out of poverty.