Thursday, March 04, 2010

New study says African poverty is falling... fast!

A new study says that African poverty is falling, and it's falling at a rate faster than many believe. In fact, the authors of the study say that Africa will meet it's Millennium Development Goal for poverty reduction only 2 years after the target year of 2015. The study's findings are in stark contrast to those of the United Nations.

From Reuters Blogs, we find this analysis of the study.

“Africa is reducing poverty, and doing it much faster than we thought,” the study by U.S.-based economists Xavier Sala-i-Martin and Maxim Pinkovskiy said.

“The growth from the period 1995-2006, far from benefiting only the elites, has been sufficiently widely spread that both total African inequality and African within-country inequality actually declined over this period.”

The research, which assesses poverty levels and income distribution from 1970 to 2006, lends weight to a belief among local and foreign investors that Africa is finally getting its act together 50 years after shaking off the colonial shackles.

The study, published by the private, non-profit U.S.-based National Bureau of Economic Research, also challenges the suggestion that strong African growth over the last decade or more has done little to alleviate grassroots poverty due to the countervailing effect of equally strong population expansion.

Going by an inflation-adjusted $1 per person per day yardstick, the study, using statistical analysis pioneered by the two authors said 32 percent of Africans were in poverty in 2006, compared to 42 percent in 1995 and 40 percent in 1970.

By contrast, the United Nations’ population agency estimates the average African is 22 percent worse off now than in the mid-1970s because “20 years of an almost 3 per cent annual population growth has outpaced economic gains”.

If you would like to read this for yourself, the study can be purchased at the National Bureau of Economic Research for five dollars. A couple of graphs were designed to give a visual to the conclusions of the report. First, those who live on a dollar or less a day...

Lastly, income inequality in Africa...

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