What Causes Inequality in African Countries? New Book Traces a Vicious Cycle
Inequality is a problem that exists in various forms in sub-Saharan Africa.
Inequality is created by, among other factors, where you are born and live. Alongside this, income, assets, and access to education and healthcare differ among and between populations. These inequalities reinforce each other. The result is persistent poverty, lack of social mobility across generations, increased exposure to climate change, and a lack of inclusive economic growth.
Our recently published book Inequalities in Sub-Saharan Africa: Multidimensional Perspectives and Future Challenges presents an overview of the current situation. It identifies the key dimensions, challenges and causes of inequalities in the region. The book also proposes some solutions for equitable and sustainable development. These include progressive taxation and policies that address inequalities at their roots.
The impact of inequality
Migration: On a global scale, the greatest determinant of individual incomes – and thus of inequalities between individuals – is place of birth. More than half of income’s variability is explained by the country of residence and by the given circumstances at birth. These include being born in a rural environment.
In sub-Saharan Africa, especially in low-income countries, internal migration remains the most prevalent migration pattern. Migration is often the chosen route for people seeking to escape poverty. The rural exodus that characterises many countries in sub-Saharan Africa illustrates this well. Young people in Africa, faced with high unemployment rates, often see migration as the only opportunity for social mobility.
The dynamics of international migration are more complex. Given the high costs involved, international migration concerns only 2.5% of the population in sub-Saharan Africa. This is mostly intra-continental.
Labour market: Access to the labour market remains the main determinant of inequalities in sub-Saharan Africa.
Labour markets in the region are characterised by high proportions of informal employment. Formal sectors are relatively small (about 15% of total employment on the continent). Since the turn of the century, countries like Kenya have seen their share of informal employment increase significantly (from 73% in 2001 to 83% in 2017). At the same time formal wage employment has declined.
This amplifies inequality because the informal sector is characterised by a lack of protection and high vulnerability. But not all informal activities are precarious. Some serve as springboards into formal jobs.
In the formal sector, wage inequality in Africa is among the highest in the world. In South Africa, workers in high-skilled jobs earn nearly five times more than those in low-skilled jobs.
Young people entering the labour market have much higher unemployment rates and little chance of regular employment.
Gender inequality: Many gender inequalities persist, particularly access to the labour market. Unpaid care work makes women’s work invisible. In many African countries, women and girls spend more time on unpaid care which limits their economic opportunities.
These inequalities are reinforced by inequalities in access to resources. About 38% of African women report owning land, compared to 51% of African men.
Climate change: Africa is suffering the most severe impacts – droughts, floods and food insecurity – while contributing less than 5% of global carbon emissions.
Arid conditions affect 43.5% of agricultural land in sub-Saharan Africa compared to an estimated global average of 29%. Similarly, climate change mitigation costs, such as finding alternatives to hydroelectric power, are higher for low-income countries.
In sub-Saharan Africa, the richest 10% emit seven times more tonnes of carbon dioxide than the poorest 50%. Disadvantaged groups are more vulnerable to adverse climate effects as their housing and wealth are more likely to be damaged by storms and floods.
Skewed economic growth benefits: Economic growth has led to notably lower reductions in poverty in African countries than elsewhere. Unequal distribution of growth and its capture by those at the top of the income distribution ladder are evidence of non-inclusive economic growth. The richest 1% of Africans received 27% of the total revenue from growth on the continent.
What needs to be done
It is vital to give priority to promoting social and economic inclusion in the development strategies of African countries. Importantly, multidimensional inequalities such as income and health persist because they reinforce each other. Tackling them therefore requires coordinated and coherent policies.
