Africa’s combined GDP will be $2.6 trillion by 2020 and that Africa’s consumer spending by 128 million households with discretionary income is expected to be around $1.4 trillion. But a new report from the United Nations Development Program finds that Africa’s new wealth is increasingly concentrated in a few hands. Disappointingly, 10 of the world’s 19 most unequal countries are in sub-Saharan Africa.
In highly unequal societies, such as South Africa, most people live in poverty while a minority amasses enormous wealth. South Africa, the continent’s most developed economy, is also the world’s most unequal. Botswana, Namibia and Zambia are also among the top 19.
While Ethiopia’s economy is growing at 8%, it is impossible to miss its impoverished citizens in the streets of its capital. In recent months thousands of Ethiopians have been on the streets protesting harsh economic conditions, forcing factories, hospitals and public transportation to shut down operations.
In Nigeria “the scale of inequality has reached extreme levels,” reports Oxfam, in a study published in May 2017. Five of Nigeria’s wealthiest people, including Africa’s richest man, Aliko Dangote, have a combined wealth of $29.9 billion—more than the country’s entire 2017 budget. About 60% of Nigerians live on less than $1.25 a day, the threshold for absolute poverty.
In the 1980s and 1990s, many African countries buckled under pressure from the International Monetary Fund, the World Bank and western nations to implement structural adjustment programs, or SAPs, which led to cuts in subsidies for health, education, transportation and other sectors that help poor citizens.
Some historians and economists now say those cuts fostered inequality. “Under the influence of western donors, austerity became African leaders’ default coping mechanism for periods of economic stress,” writes Nicholas William Stephenson Smith, a freelance researcher and historian.
Said Adejumobi, director of Southern Africa’s sub-regional office for the UN Economic Commission for Africa says currently “a tiny group of 4% captures a large chunk of the income and wealth in Africa’s changing tide of capitalist progress.” Economic inequality is fueling conflicts in the Central African Republic, Libya, Nigeria and South Sudan, explains Adejumobi. “The warped motive of Boko Haram insurgency may not relate to inequality but…ignorance and deprivation are two factors that may have made it possible for the terrorist group to recruit young people to kill and maim their fellow citizens.”
Currently most African countries allocate a significant share of their national budgets to recurrent overheads and/or debts, leaving little or nothing for other projects. Corruption, mismanagement and illicit financial flows also deplete state coffers.
No comments:
Post a Comment