Taking stock of the complexities between economic growth, poverty, and inequality in Africa

Abstract

Whether economic growth is good or bad for the reduction of poverty and inequality and sustainable development outcomes in general, depends on the specific economic and societal contexts within which economic growth is taking place and the nature of that economic growth. Yet, discussions about the anticipated effects of economic growth on poverty and inequality are often brought to the public sphere without sufficient context.

The stubbornly high levels of poverty and inequality in Africa, and our current lacklustre performance in achieving the goals of both the SDG’s and the AA2063 despite three decades of strong growth performance in many African countries, illustrates the urgency of moving into more comprehensive understandings of the relation between economic growth and poverty and inequality. If we aim to propose better action plans of action to achieve the goals of the SDGs and the Africa Agenda 2063, we need to make explicit the different factors that modulate the relation between economic growth, poverty and inequality on the continent.

In this document, we illustrate some of the complexities associated with the relationship between economic growth, poverty, and inequality in Africa. We show that these relations are context-specific, and we highlight some of the contextual factors that condition these impacts. There are few stylised facts, and this article makes the case for the importance of understanding these complexities in each country context in order to design more effective policies and interventions to reduce poverty and inequality in that country and then across the continent.