This report is quite lengthy but the conclusions are noteworthy. Conditions in Africa were awful and unchanging for a generation prior to 1995. As usual we all assumed that little would change without something big happening. In way we were right. The advent of the internet began to inform and educate people everywhere. That ten year old who got access to a computer at some mission school learned that it was all there for him. He went out and made it work differently and got his family to support it.
So poverty is receding far quicker than anyone ever thought likely. The advent of the cell phone and cell phone supported banking is now finishing the job. The next decade will see an entire globe plugged into the global economy on an instantaneous basis. That is no longer a bold prediction.
In fact, Africa is gearing up to enter a growth rate of six percent or more as all the necessary industrial infrastructure is built. They have plenty of cheap oil to support it.
African Poverty is Falling...Much Faster than You Think!
Maxim Pinkovskiy, Massachusetts Institute of Technology
Xavier Sala‐i‐Martin, Columbia University
Jan 17th, 2010
Abstract:
The conventional wisdom that Africa is not reducing poverty is wrong. Using the methodology of Pinkovskiy and Sala‐i‐Martin (2009), we estimate income distributions, poverty rates, and inequality and welfare indices for African countries for the period 1970‐2006. We show that: (1) African poverty is falling and is falling rapidly. (2) If present trends continue, the poverty Millennium Development Goal of halving the proportion of people with incomes less than one dollar a day will be achieved on time. (3) The growth spurt that began in 1995 decreased African income inequality instead of increasing it. (4) African poverty reduction is remarkably general: it cannot be explained by a large country, or even by a single set of countries possessing some beneficial geographical or historical characteristic. All classes of countries, including those with disadvantageous geography and history, experience reductions in poverty. In particular, poverty fell for both landlocked as well as coastal countries; for mineral‐rich as well as mineral‐poor countries; for countries with favorable or with unfavorable agriculture; for countries regardless of colonial origin; and for countries with below‐ or above median slave exports per capita during the African slave trade1
8 Conclusion
Our main conclusion is that Africa is reducing poverty, and doing it much faster than we
thought. The growth from the period 1995‐2006, far from benefiting only the elites, has been sufficiently widely spread that both total African inequality and African within‐country inequality actually declined over this period. In particular, the speed at which Africa has reduced poverty since 1995 puts it on track to achieve the Millennium Development Goal of halving poverty relative to 1990 by 2015 on time or, at worst, a couple of years late. If Congo‐Zaire converges to Africa once it is stabilized, the MDG will be achieved by 2012, three years before the target date. These results are qualitatively robust to changes in our methodology, including using different data sources and assumptions for what happens to inequality when inequality data is not available.
We also find that the African poverty reduction is remarkably general: it cannot be explained by a large country, or even by a single set of countries possessing some beneficial geographical or historical characteristic. All classes of countries, including those with disadvantageous geography and history, experience reductions in poverty. In particular, poverty fell for both landlocked as well as coastal countries; for mineral‐rich as well as mineral‐poor countries; for countries with favorable or with unfavorable agriculture; for countries regardless of colonial origin; and for countries with below‐ or above‐median slave exports per capita during the African slave trade. This observation is particularly important because it shows that poor geography and history have not posed insurmountable obstacles to poverty reduction. The lesson we draw is largely optimistic: even the most benighted parts of the poorest continent can set themselves firmly on the trend of limiting and even eradicating poverty within the space of a decade.
