Africa begins to improve the continents poverty

For decades, it has been seen as the world’s lost continent. Now, a new study says that the view of Africa as a basket case is wrong.As the continent prepares to welcome thousands of international football fans for the World Cup in June, it seems the image of an economically vibrant region the hosts are keen to project is closer to the truth than tired stereotypes suggest.

Xavier Sala-i-Martin and Maxim Pinkovskiy, two U.S.-based academics, find that in the 10 years before the credit crunch began, poverty rates fell rapidly and inequality declined right across the continent.
They say that it is time to stop feeling so gloomy about the prospects for Africa, which they claim may meet the Millennium Development Goal target, of halving the number of people living on $1 a day, ahead of the 2015 deadline.
“Our results show that the conventional wisdom that Africa is not reducing poverty is wrong. In fact, since 1995, African poverty has been falling steadily,” the authors say. “Moreover, contrary to the commonly held idea that African growth is largely based on natural resources and helps only the rich and well-connected, we show that a great deal of this growth has accrued to the poor.” The findings in the report, published by America’s National Bureau of Economic Research, contradict the views of the World Bank and the United Nations, which established the millennium goals in 1990.
Mr. Sala-i-Martin and Mr. Pinkovskiy say that by 2006 the African poverty rate was 30 per cent lower than in 1995, and 28 per cent lower than in 1990. They also reject the argument that this has been solely the result of wealthy elites pocketing the proceeds of bumper oil wealth. While still high by developed country standards, they say the Gini coefficient, an international benchmark for social inequality, has declined consistently, if slowly, since the early 1990s.
Some development experts are not convinced. Stefan Dercon, of Oxford University, said the authors placed too much weight on government statistics such as GDP, and ignored other data. “They believe the evidence that many of us would least trust and throw away the evidence we tend to think is fairly accurate. Painstakingly collected household consumption and income surveys, especially when over various years using the same method in each year, give a rather detailed picture of whether there is massive enrichment or not. And unfortunately, the evidence for Ethiopia, where I have been doing this for years, doesn’t show such massive improvement.” Following the most severe downturn in the global economy since the 1930s, there are also concerns that Africa’s progress has been stalled. The World Bank warned in 2008 that the financial crisis would leave an extra 89 million people living on less than $1.25 a day by the end of this year.
However, Alison Evans, director of thinktank the Overseas Development Institute, said: “Rather than starting from the premise that we never get any good news from Africa, we should all be embracing the principle that Africa is on a trajectory where poverty is falling.” Countries in conflict have enjoyed a much less marked decline in poverty than their peaceful neighbours, the study finds, seeing only a small improvement during the first half of the 2000s.
Countries that were not at war saw their poverty rates decline from 40 per cent in 1970 to about 25 per cent by 2006.


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