Sub-Saharan Africa’s growth fails to alleviate extreme poverty as number of poor Africans rise to 462 million
The World Bank’s October 2023 Africa Pulse report reveals that growth in Sub-Saharan Africa has failed to adequately reduce extreme poverty and promote shared prosperity.
Moreover, the region has exhibited a lower responsiveness of poverty reduction to economic growth compared to other parts of the world.
The poverty headcount ratio, measured at $2.15 per day, has seen a slight decline to 37.2 percent in 2023 from a peak of 37.6 percent during the COVID-19 crisis in 2020. Alarmingly, the number of individuals living in poverty has increased to 462 million people.
The report underscores a disconcerting trend – despite Sub-Saharan Africa experiencing growth over the past two decades, it has not translated into more job opportunities for its population. The region achieved a modest annual average growth rate of 1.4 percent between 1991 and 2019, even though a growth spell during 2000–2014 saw output per capita expand at an annual rate of 2.8 percent.
This faster growth, however, resulted in only a marginal increase in the proportion of working-age individuals engaged in wage jobs, rising from 14 to 16 percent.
Furthermore, the report emphasizes the pressing need for African policymakers to develop inclusive growth strategies that can generate steady and productive employment opportunities for the more than 10 million youth entering the workforce each year.
Current growth patterns are producing a mere 3 million formal jobs annually, resulting in high youth unemployment rates. Addressing this employment gap is essential not only for inclusive economic growth but also to harness the demographic transition in the region and transform it into a demographic dividend.
