Experts Call for Better Policies to Promote Income Distribution in Africa

Economists have called for better policies to promote income distribution in Africa at the ongoing the 10th edition of the African Economic Conference, titled Addressing Poverty and Inequality in the Post-2015 Development Agenda, taking place in Kinshasa, Democratic Republic of Congo.

While Africa as a whole has made considerable progress on poverty reduction since the mid-1990s due to rapid economic growth, it has yet to have a significant impact on income distribution.

Since mid-2000, Africa’s GDP growth has been high, averaging five per cent, and well above the global average of three per cent per year, instilling optimism about the continent’s economic prospects. However, the growth has not been inclusive or equitable, and has made little impact on poverty.

Yet growth without redistribution cannot eliminate poverty or bolster sustainable development.

However, better social policies can enhance income growth and income distribution including improving the complementarity between physical capital and education especially at the basic educational level.

For instance, this would entail a focus on vocational training in the last three years of basic education.

In addition, there is need for policymakers in Africa to put greater emphasis on addressing income inequality, empowering women, narrowing down the gaps in health, nutrition and education, and challenging prejudices and stereotypes which feed discrimination and marginalization.

According to a paper titled “Growth and Poverty Reduction in Africa: The Context and Evidence” presented during a plenary session on Monday titled “The Poverty, Inequality and Growth Nexus in Africa”, over 70 per cent of the 39 African countries in the sample analyzed have reduced their poverty levels since about the late 1990s, and income growth has been the main driver of this progress.

Yet, there are considerable disparities across African countries, with certain countries, albeit a relatively small number, relying primarily on improving income distribution to reduce poverty.

However, worsening income distribution was the major culprit in the majority of countries experiencing poverty exacerbation.

More so, there is also further complication that per capita Gross Domestic Product (GDP) may understate income in certain countries, but overstate it in others.

In addition, social protection programs that insure against downside risks of economic undertakings would help.

In his remarks during the session, Steve Kayizzi-Mugerwa, acting vice-president and chief economist of AfDB, underscored the need to take in account the political economy to effectively address income inequalities.

“Public policy needs to take in account the role of local bureaucracy because they are affected by the same policies,” Kayizzi-Mugerwa said, pointing out that economic managers need to consult the local administrative structures in policy formulation to make it effective.

According to experts, small number of African countries is relying primarily on improving income distribution to reduce poverty. However, worsening income distribution is the major culprit in the majority of countries experiencing poverty exacerbation.