Africa’s number of “extremely wealthy” are increasing, while inequality widens across the continent, a World Bank Group report finds.
The 2015 report, Poverty in a Rising Africa, is the first of two sequential reports aimed at better understanding progress in poverty reduction in Africa and articulating a policy agenda to accelerate it.
In the report, Vice President, Africa Region World Bank Makhtar Diop said the latest estimates from the World Bank suggested that the share of the African population in extreme poverty declined —from 56 percent in 1990 to 43 percent in 2012, at a time when Africa’s population continued to expand rapidly.
He said a result of this was the number of people living in extreme poverty still increased by more than 100 million.
“These are staggering numbers. Further, it is projected that the world’s extreme poor will be increasingly concentrated in Africa.”
He said the findings of the report are both “encouraging and sobering”.
For the subset of 23 countries for which comparable surveys are available with which to assess trends in inequality, half the countries experienced a decline in inequality and the other half saw an increase.
Although declines in inequality are associated with declines in poverty, poverty fell, despite increasing inequality, in many countries. For Africa as a whole, ignoring national boundaries, inequality has widened.
Aggregate billionaire wealth increased steadily between 2010 and 2014 in Nigeria (from 0.3 percent to 3.2 percent of GDP) and South Africa (from 1.6 percent to 3.9 percent).
The number of ultra-high-net-worth individuals (people worth at least $30 million) also rose.
In Kenya, 8,000 people are estimated to own 62 percent of the country’s wealth, the report quoted.
The share of extreme wealth derived from areas prone to political capture, including extractives, has been declining, while the share derived from services and investment has been increasing.
The report pointed to lack of data to work with – calling for better data collection across Africa.
“Clearly, policies matter beyond resource availability. To maintain and accelerate the momentum of progress of the past two decades, concerted and collective efforts are also needed to further improve the quality and timeliness of poverty statistics in the region,” Diop wrote.
He wanted to see domestic political support for statistics to get better data to track progress.
“Better data will make for better decisions and better lives.”
The report noted that the coverage, comparability, and quality of household surveys to monitor living standards have improved, but in 2012, only 25 of the region’s 48 countries had conducted at least two surveys over the past decade to track poverty.
It found regular and good quality GDP, price, and census data are lacking, and needed a region-wide commitment to get better data.
It found not all GDP data available from African countries were relevant, citing Ghana as an example as Ghana leapt from low-income to lowmiddle-income country classification after rebasing its GDP in 2010.