UNDERSTANDING LINKS BETWEEN GROWTH AND POVERTY REDUCTION (GP)

The most important features of economic growth in sub-Saharan Africa (SSA) over the period since independence in the 1960s up to 2000 have recently been summarized in a two volume publication that grew out of AERC's collaborative research project on “Explaining African Economic Growth.” These features include (i) the divergence of African incomes from incomes in other  developing regions; (ii) slow growth in physical and human capital and notably also in productivity; (iii) limited structural transformation of the economy; (iv) high levels of economic volatility; and, (v) diversity of growth experience.  It is shown that over the period 1950-2001 SSA real per capita income increased by an annual rate of just about 0.7 %; low compared to an average of 3 % for the developing world, 1.7 % for Latin America and the Caribbean, 3.4 %for Asia, and 2.2 % for the Middle East, North Africa and Turkey. Moreover, during the most recent decades of 1980-89 and 1990-99 real per capita income growth was negative at 1.1 and 0.2 % respectively.

In recent years, however, SSA has shown signs of growth recovery. According to the IMF (2009) Regional Economic Outlook, real per capita GDP in SSA grew at an average rate of 1.8 % for the period 1997-2002, and an average of about 4 % for the period 2003-2008.  However, growth will have to double from current rates if African countries are to succeed in meeting the Millennium Development Goals over the next decade.

To the consternation of policy makers and economists alike, several African countries’ economies have registered positive economic growth without corresponding reductions in poverty. The literature on pro-poor growth identifies a strongly pro-poor process as one that reduces inequality in the course of raising mean consumption. Such a process raises the incomes of the poor faster than those of the non-poor. An anti-poverty strategy must therefore have a growth strategy - a diagnosis of the relevant growth opportunities and institutional and policy initiatives required to seize them- at its core.

To understand the above scenario, Understanding Links between Growth and Poverty Reduction Project seeks to identify the nature of economic growth that results in poverty reduction.  Accordingly, a concept note on this project was approved by the AERC Program Committee at its meeting in December 2005 clearing the way for commencing the project. 

Membership of Project Steering Committee

1.  Olu Ajakaiye (Chair)
2. Ali A. Ali (Project Coordinator)
3. Andy MacKay (Project co-Coordinator)
4. Erik Thorbecke
5. Ernest Aryeetey
6. John Mbaku
7. Machiko Nissanke
8. Steve O’Connell

To give the intellectual guidance to the project, the following ten framework papers were commissioned.

1. Informality, Economic Growth and Poverty in Africa by Ernest Aryeetey
2. Spatial Inequality, Economic Growth and Poverty Reduction by Andy McKay
3. Impact of Globalization on Growth, Inequality and Poverty by Machiko K. Nissanke
4. Is Poverty a Binding Constraint on Growth in SSA by Stephen A. O’Connell
5. Growth, Employment Creation and Poverty Reduction: An Overview Evidence and Possible Applications to Africa by Haroon Bhorat
6. Anatomy of Growth, Distribution and Poverty Reduction in Africa: Theory, Methods and Evidence by Erik Thorbecke
7. Agriculture as Engine of Growth and Poverty Reduction in Africa by Douglas Gollin
8. Agriculture and Rural Poverty Reduction: Contextual and Institutional Issues by Stefan Dercon
9. Shared Growth, Social Protection and Political Economy of Growth and Poverty Reduction in Africa by Pramila Krishnan
10. Macroeconomic Stability, Exchange Rate and Poverty by Ibrahim Elbadawi

These framework papers have been posted on the AERC website and are currently being processed for publication. The country case studies under this project which are on-going include the following:

1. Croissance sectorielle et réduction de la pauvreté et de l’inégalité au Bénin, by Mededji Damien, Djossou Aristide, Sessede Charles, and Jean-Claude Keke
2. Croissance et persistance de la Pauvreté au Burkina Faso  by Dorinne Kanmij, Dzifa Kpetigo and Alain Siri
3. Les  sources Microéconomiques de la Dynamique de la Pauvreté et des Inégalités au Sénégal, by Dr.  Mbaye Diene
4. Analysing the Role of the Labour market and Employment Creation within the Growth-Poverty-Inequality Linkages in Cameroon, by    Tabi Atemnkkng Johannes,  Ngantcha   Tonda Joëlle and Ngeh Ernest Tingum
5. Spatial Inequality in Cameroon during the 1984-2001 Period, by Samuel Fambon and Isaac Tamba
6. Les liens entre la Croissance économique et Réduction de la Pauvreté en Afrique : Cas du Tchad, by Tabo Symphorien Ndang and Nan-Guer Koulké Blandine
7. Growth, Inequality and Poverty Reduction: Panel data Evidence from Ethiopia, by Atlaw  Alemu , Abbi Kedir, Kefyalew Endale, and Tsegabirhan W.Giorgis
8. La Croissance économique en Guinée est- elle  pro-pauvres, by Aboubacar Kaba (Mr), Mama Keita (Miss), Jacob Delamou (Mr) and Sékou Sidia Fofana (Mr)
9. Regional Inequality, Poverty and Economic Growth: Understanding the Linkages in Kenya, by Jane Kabubo-Mariara, Godfrey Ndeng’e, and Domisiano Mwabu
10. Agricultural Growth and Poverty Reduction in Malawi,  by Mirriam Muhome-Matita  and Ephraim Chirwa
11. Government Fiscal Reforms and Pro-Poor Growth in Nigeria, by A.S. Oyekale, Y. Lawal and M.E. Onu
12. Pro-Poor Growth, Unemployment and Poverty in Nigeria: Evidence from Existing Datasets, by Hyacinth Ichoku , Chukwuma Agu , and John Ele Ataguba
13. Understanding the Links between Growth and Poverty Reduction in Ghana, by John Baptist D. Jatoe, Ramatu Al-Hassan and Dele Adekunle

Final draft research reports are expected by March 15, 2011 after which a final report review workshop will be organized.  Upon submission of the revised final reports, dissemination and publication activities will commence.