Wednesday, June 22, 2011

No Benefit from Growth for the Poor

The high economic growth enjoyed by many African states during the 2000s have not led to poverty elimination. This is because the growth did not happen in the sectors where poor people work, as in agriculture, or in the rural areas where poor people live, or simply did not involve labour provided by poor people.

Economist Jan Rielaender explained good economic performance due to investment in oil and other extractive industries has had little effect on poverty. Around 75 percent of foreign investment in Africa has been in oil-rich countries and in so-called extractive industries with few links with the rest of the domestic economy or with poor people.

From 2001 to 2009 only three of the 14 African countries, where the annual gross domestic product growth rates were higher than the regional average of 5.3 percent, registered substantial poverty reduction rates.

The African continent registered a growth rate of 4.7 percent in 2010, and is estimated to rise to 5.0 percent in 2011.
"This is good news for Africa, but not good enough for millions of people who are yet to feel the benefits of prosperity in their daily lives," a joint report released last month, the U.N. Economic Commission for Africa (ECA) and the African Union Commission said

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