Thursday, December 27, 2018

Letting the Gini out of the bottle

 The Gini coefficient, the Gini Index is a statistical method used to measure economic distribution developed by an Italian mathematician known as Corrado Gini in 1912. It is used to estimate economic inequality between countries, income and wealth distribution.
It measures the extent of income distribution, and consumption in some cases, among households and individuals within an economic setup and how it deviates from a perfectly equal distribution. In the Gini index, a Lorenz curve is plotted. It comprises cumulative percentages of the total incomes received against the cumulative number of the recipient, starting with the poorest household or individual.
The index measures the resultant area between the curve and the proverbial line of absolute equality. The result is expressed as a percentage of the area under the line. In this perspective, a Gini index of 0 denotes perfect equality, whereas an index of 100 implies perfect inequality

1. South Africa

Data from the UNDP indicate South Africa has the highest level of income inequality in the world. Most of the inequalities witnessed are creations of the apartheid era.
Income inequality has worsened since the end of the apartheid but is somehow less associated with race. Furthermore, from 1991-1996, the white middle class in the country grew by 15% whilst the blacks’ grew by 78%.
The World Bank estimated that South Africa’s GINI index was 63.40 in 2011. In the last 18 years, this figure has increased to a maximum of 64.80 in 2006, and went down to a minimum of 57.80 in 2000. Currently, the GINI coefficient for South Africa is 63.4 according to Index Mundi, making it the number 1 unequal country in the world.

2. Namibia

Since independence, Namibia has embraced free-market option, meant to promote commercial growth and job creation to bring about economic empowerment. To realize this goal, successive governments continue courting donors and foreign investors.
Namibia is a middle-income country with an annual GDP per capita of US$ 5,828, but has unequal income distribution. In 2009, the World Bank estimated that Namibia's Gini ’index was 61.00.
In a span of ten years, this figure has fluctuated between 59.7 and 74.3, according to data obtained from the United Nations. Currently, Namibia stands at 61, according to Index Mundi, making it the number 2 unequal country in the world.

3. Botswana

According to the World Bank estimates, Botswana’s Gini index was reported to be 60.50 in December 2009. There was a decrease from a previous figure of 64.70 in December 2002.
This data is updated annually, and over the years it has averaged at 60.650 from December 1985 to 2009, where four observations were made. Currently, the index stands at 60.5 for Botswana, making it the fourth highest unequal country in the world.

4. Zambia

In 2015, the World Bank reported that Zambia’s GINI index value was 57.10. In the last twenty-four years, this figure reached a maximum point of 60.50 in 1991 and a minimum of 42.10 in 2002 respectively. Currently, the GINI coefficient for Zambia stands at 57.1, making it the sixth highest unequal country in the world.

5. The Central African Republic

CAR’s unemployment rate is 6% as reported by the Nations Encyclopedia. Many people live in rural areas, where there’s food but consumer goods and money are difficult to obtain.
In 1992, it was reported that CAR had a GINI index of 61.30. Over the years, this figure has dropped to 43.60 in 2003 and 56.20 in 2008. However, from 2010 this figure remains between 60 and 70. Currently, the GINI coefficient for CAR stands at 56.2, making it the seventh highest unequal country in the world.
Building on the data from the Gini index report, the five countries; South Africa, Namibia, Botswana, Ghana, and central Africa republic, which are characterized by land and socio-economic assets at the hands of a few individuals, are leaders in the continent in income inequality. These countries make Africa’s Gini coefficient higher than other parts of the world.
On the other hand, although poor overall, countries like Mali (33.00 in 2009), Niger(34.00 in 2014), Guinea (33.70 in 2012), Burkina Faso (35.30 in 2014) , and Burundi (39.20 in 2013) appear to be performing well and rank highly among the most equal in terms of income inequality in Africa and the world. These nations are characterized by egalitarian access to land and communal land ownership; features that accelerate the proper use of land for productive engagements, especially in the agricultural sector.

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