CHAPTER 7 Eliminating extreme poverty: progress to date and future priorities Key messages • Africa has made significant progress towards the MDGs, but this progress masks substantial variation among countries. Aggregating and reporting development outcomes at the level of the continent can be misrepresentative of country-level achievements in just the same way that coun- try-level achievements may not reflect achievements in different parts of the country. • Under “business as usual”, extreme poverty may not be eradicated in Africa by 2030, but it can be brought down to low levels. • To eliminate extreme poverty, African countries will have to achieve growth of 5% per year on average on a per capita basis over the next 10-15 years. Growth accompanied by appropriate re- distribution policies including social protection programmes could accelerate the pace of poverty reduction. 176 Chapter 7 Eliminating extreme poverty: progress to date and futures priorities 7.0 Introduction 2015, the finishing line for the UN’s MDGs, is referred the case in many African countries, and as a consequence, to as a ‘year for development’, encouraging policymak- growth in Africa has not been inclusive and many Africans ers to rethink development frameworks for the dec- have been left behind. Chapters 2, 3 and 4 analysed Afri- ade(s) to come. After fifteen years of implementing the ca’s progress in reducing poverty, inequality, and gender MDGs, what efforts have African countries pursued so inequality in depth. Evidence has shown that, despite the far? What worked and what are the remaining challeng- progress made, extreme poverty and inequality remain es? Compared to other developing regions around the important issues in many African countries. The continent world, Africa has made relatively limited progress in remains the poorest and the second most unequal region achieving the MDGs. Nevertheless, Africa has achieved in the world. Therefore, poverty, especially extreme poverty significant gains in some areas, including the follow- and inequality, will remain the biggest challenges for many ing: Improvement primary school enrolment; bridging African countries for the coming decades. In this regard, the gender gap in primary school enrolment; female the importance of eradicating poverty by 2030 has been representation in national parliaments; reducing child widely recognised. Consensus on its importance has been and maternal mortality; and, reversing the trend of the achieved across international organisations, especially with spread of HIV/AIDS (UNECA, AU, AfDB, UNDP, 2015). the recent adoption of the UN Sustainable Development What lessons can be learnt from the implementation of Goals (SDGs). the MDGs, and, what are the remaining challenges for the continent to tackle over coming decades? The first From the perspective of African policymakers aiming to part of this chapter discusses Africa’s progress towards, eradicate extreme poverty, the key issue is how to design and shortfalls against, the MDGs. In the second part, and implement policies that will accelerate growth while we discuss the challenges Africa will need to tackle to making it more inclusive and sustainable over time. In the overcome extreme poverty by 2030. Common African Position (CAP), Africa’s Heads of State stressed that the post-2015 development agenda should In the first chapter, we discussed Africa’s progress in terms reflect the continent’s development priorities for the next of economic growth. We found that one of the main con- fifteen years, which include (African Union, 2014): tributors to progress has been high commodity prices. However, Africa’s economies remain undiversified, de- (i) Structural economic transformation and pending heavily on a few commodities. This makes them inclusive growth; very vulnerable to commodity price shocks. In chapter 1, (ii) Science and technology; we showed that the recent decline in commodity prices (iii) People centred development; could jeopardise the progress made to date in terms of (iv) Environmental sustainability, natural resource economic growth. In addition, in other developing regions management and disaster risk management; of the world, growth has been accompanied with the (v) Peace and security; and, creation of decent jobs, increased productive capacities, (vi) Finance and partnerships. and provision of social protection for the most vulnerable groups (UNECA, AU, AfDB, UNDP, 2015). This was not African Development Report 2015 Growth, Poverty and Inequality Nexus: Overcoming Barriers to Sustainable Development 177 These goals are reflected in the SDGs, recently adopted by to the 40 poorest percent of the population, eliminating the international community. These goals can be achieved extreme poverty by 2030 would be out of SSA’s reach. On through high growth, but this growth also needs to be of a more positive note, we argue that if Africa can double higher quality, namely inclusive and green. per capita consumption by 2025-2030, extreme poverty will be eliminated on the continent. The post-2015 UN agenda aims to ‘eradicate extreme poverty for all people everywhere by 2030’ (UN, 2014)59. In the second part of this chapter, we discuss the results of Several studies have noted that bringing extreme poverty scenario projections to assess by how much poverty and below 3 percent of the global population by 2030 will be inequality can be reduced in Africa by 2030 at regional challenging, but achievable60. However, simulations sug- and country levels. gest that under the ‘business as usual’ scenario together with assumptions on redistribution from the 10 richest 59 In this report, extreme poverty means living on less than $1.25 a day (in 2005, PPP adjusted prices). The headcount is only one measure of poverty, which does not reflect dynamics above or below the line. 60 One scenario where poverty is reduced to such a low level assumes that the progress achieved during 2000-2010 is maintained until 2030 (Ravallion, 2013). However, progress with poverty alleviation is likely to slow down at lower poverty levels where poverty depth often rises (Chandy et al., 2013a; Yoshida et al., 2014). 178 Chapter 7 Eliminating extreme poverty: progress to date and futures priorities 7.1 Africa’s progress towards, and shortfalls against, the MDGs The MDGs became the foremost global policy instrument world today, relative to 1990, has improved in terms of for poverty reduction. They span a set of time-bound goals, human dignity, equality, equity, and economic wellbeing. agreed in 2000 by 172 countries, including all African coun- In this section, we assess Africa’s progress towards the tries. The MDGs constitute eight goals aimed at addressing MDGs since 1990. hunger, education, gender (in)equality, health (child mortal- ity, maternal health, and communicable diseases), environ- Has Africa achieved MDG 1 on eradicating extreme mental sustainability, and global partnership-building for de- poverty and hunger? The world, as a whole, has met the velopment (IWDA, 2014). Each of the goals has a number of target of halving the number of people living in extreme quantitative and qualitative targets and indicators specific to it. poverty. The share has dropped from 36% in 1990 to What is Africa’s progress in the implementation of the MDGs? about 18% in 2012. Similarly, the developing world, as a whole, has succeeded in reducing by half the number of poor people, by 2012. In the same period, according to 7.1.1 Progress in meeting the MDGs: the official figures (as opposed to those of Pinkovskiy and From MDG 1 to MDG 8 Sala-i-Martin, 2014) Africa did not reduce poverty by The MDGs have brought profound advancement in the half. Africa’s progress towards this target did not reflect lives of many people around the world. The developing global trends, as it only managed to lower the fraction of Figure 7.1 Progress towards MDG1 Halving Extreme poverty-people living on <$1 a day 1 Northern Africa 5 18 World 36 22 Developing regions 47 48 Sub-Saharan Africa 56 2012 1990 Undernourished people (%) Underweight- children under five (%) Sub-Saharan Africa 25 21 33 Sub-Saharan Africa 29 Developing regions 14 24 World 15 Northern Africa 4 25 4 5 Developed regions 3 Northern Africa 3 10 2011-2013 1990-1992 2012 1990 Source: Data extracted from UN (2014) African Development Report 2015 Growth, Poverty and Inequality Nexus: Overcoming Barriers to Sustainable Development 179 people living on less than $1 a day from 56.5% to 48.4%. way, SSA has lowered the percentage of underweight chil- This is a mere 8% reduction (Figure 7.1). dren by 8 percentage points, less than the global progress achieved of 10 percentage points, and much less than the Africa’s undernourishment rate is equal to the devel- 20 percentage point progress registered in Southern Asia oping world’s rate of 25 years ago. Uneven progress in between 1990 and 2012. reducing undernourishment is demonstrated by its high incidence in SSA, relative the rest of the developing world. Regarding MDG2 (achieving universal primary educa- SSA reduced the fraction of undernourished babies from tion), primary enrolments have significantly improved 35% in 1990 to 25% in 2012: A level equal to the entire in Africa. Achievements towards this goal have seen the developing world’s rate in 1990 (Figure 7.1). In the same gap between SSA and the rest of the developing world Figure 7.2 Progress towards MDG2 Enrolment rate for primary (%) 99 Northern Africa 90 80 96 Developed regions 97 96 90 Developing regions 83 80 78 Sub-Saharan Africa 60 52 1990 2000 2012 Source: Data extracted from UN (2014) Figure 7.3 Progress towards MDG3a Gender Parity Index for gross enrolment rates Northern Africa Developing regions Tertiary Tertiary education Sub-Saharan Africa Northern Africa Developing regions education Secondary Sub-Saharan Africa Developing regions Primary Northern Africa education Sub-Saharan Africa 0 0,2 0,4 0,6 0,8 1 1,2 1990 2012 Source: Data extracted from UN (2014) 180 Chapter 7 Eliminating extreme poverty: progress to date and futures priorities narrow: From a wide 28-percentage point difference to a In terms of gender equality and women’s empowerment lower 12-percentage point difference by 2012 (Figure 7.2).