Getting to zero on poverty in Africa
Prospects for economic growth in Africa look positive, but ending poverty to meet the new SDGs will require a huge effort.
Last week, the United Nations General Assembly adopted the 2030 Agenda for Sustainable Development, with its 17 goals and 169 associated targets. Now that the goals and targets have been finalised, the real work begins. The first, and most important Sustainable Development Goal (SDG) is simply to ‘end poverty in all its forms everywhere’.
Africa faces the largest challenge to meet goal one. Soon, the burden of extreme poverty will be the most prevalent in sub-Saharan Africa, as rapid growth continues to lift millions of Chinese and Indians, among others, out of dire circumstances.
Eradicating poverty does not mean zero poverty, which would be unrealistic. Rather, it’s about reducing poverty levels in each country to below 3%. With an estimated total population of 1.17 billion Africans in 2015, 3% is 35 million people. By 2030, achieving that goal would mean that 49 million Africans (out of an estimated total population of 1.64 billion) would still live in extreme poverty.
According to the estimates of the African Futures Project, using the International Futures forecasting system, 418 million Africans (roughly 36%) currently live in extreme poverty.
This is calculated using the standard income line of US$1.25 in 2005 purchasing power parity, which is still generally used as appropriate benchmark under goal one.
The income level used to define extreme poverty (such as US$1.25 or less per day) has been updated a number of times and generally follows the rebasing of global economies.
This is done by a worldwide statistical partnership; the International Comparison Program (ICP) – now hosted by the World Bank. It’s a complex, time-consuming task, and is only done every few years.
In October last year, the World Bank released the latest global update, which now moves the comparison of global economies from 2005 to 2011 prices. Armed with the voluminous data from this recent rebasing, the next step to measure progress towards goal one is to release an updated extreme poverty line. Originally, extreme poverty was defined as persons living below US$0.90 in 1990 prices, which then became US$1.25 in 2005 prices: the level that is currently included in the SDGs.
Ahead of its upcoming annual meeting in Lima, Peru, the World Bank is expected to update the poverty line to either US$1.90 or US$1.92 in 2011 prices. The recalculation has limited impact in Africa, where we estimate poverty levels at 418 million using US$1.25 (in 2005 prices); and 408 million using US$1.92 (in 2011 prices). The update may, however, have larger implications for other regions.
Whatever the final level, forecasting done by the African Futures Project at the Institute for Security Studies underlined the huge ambition in the SDG goal on eliminating extreme poverty.
The burden of extreme poverty will be the most prevalent in sub-Saharan Africa
A base case forecast – where Africa’s 54 countries grow, on average, at around 5.8% per annum from 2015 to 2030 – would see the number of people living in extreme poverty decline from 418 million to 397 million over the next 15 years (in 2005 prices); or 408 million to 389 million (using 2011 prices).
Although it may appear disappointing, this relatively small decline in the absolute number of extremely poor people should be viewed against the simultaneous 39% increase in Africa’s total population size over this period.
Without additional measures, we expect that Africa’s total extremely poor population will therefore decrease from its current 36% of total population to about 24%. Africa’s prospects are positive – but more is required. To achieve the goal of eradicating extreme poverty by 2030, Africa would need to achieve an additional 21% decrease in poverty levels.
This is, undoubtedly, a huge challenge and implies significantly higher average growth rates than the current forecast. It also implies that Africa would have to make progress in reducing its stubbornly high levels of inequality (goal 10 in the SDGs is ‘reducing inequality within and among countries’).
High levels of inequality mean that growth does not necessarily lead to poverty reduction, as larger income streams generally accrue to the top 10% or 20% income groups. Without changes to the structure of African economies, progress in poverty reduction will therefore not translate to the achievement of goal one. Southern Africa, where inequality is the highest globally, faces a particular challenge in this regard.
418 million Africans currently live in extreme poverty
It is because of high inequality that Africa and Latin America have struggled to reduce poverty over successive decades, compared to other regions, such as in many countries in Asia.
For this reason, among others, target 10.1 of the SDGs commits the international community to ‘progressively achieve and sustain income growth of the bottom 40% of the population at a rate higher than the national average.’
The choice of an appropriate poverty level (such as US$1.92 in 2011 prices) as the applicable level of income is necessary, but it hides as much as it reveals. In practice, the amount of income that people need to survive (essentially to buy sufficient food for a daily intake of 2 000 to 2 500 calories) differs from country to country, since food prices and the nature of foodstuffs differ.
In many countries, including South Africa, different definitions are used at a national level and poverty lines are often higher. For this reason, the SDG poverty goal also has a number of targets beyond the ambition to get to zero poverty. These include ‘to reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions by 2030’ (emphasis added).
The SDGs must be seen as a package, they are ‘integrated and indivisible’. Therefore reducing poverty must go hand in hand with reducing inequality (goal 10), promoting peaceful and inclusive societies (goal 16) and sustainability (goal 15).
Work by the African Futures Project over the last year has sought to plot the policy and implementation challenges to eliminate extreme poverty. Our analysis modelled four clusters of interventions intended to root out deep-seated or chronic poverty (poverty at levels even worse than extreme poverty).
The SDGs must be seen as an 'integrated and indivisible' package
These included increased spending on welfare, increases in government revenues, improved government effectiveness and modest declines in corruption. We also modelled increased investments in infrastructure, agriculture, education, healthcare, gender empowerment and female labour forces participation.
Our forecast pointed to potentially achieving the elimination of extreme poverty by around 2045, some 15 years later than that set by the SDG process. The goal of eliminating extreme poverty by 2030 is therefore extremely ambitious. It will firstly require an extraordinary effort by African governments. It will also require the support of the international community at a time when the Africa rising narrative and global slowdowns in growth have led to a domestic and inward focus, and a reduced appetite for development assistance.
Eventually the SDGs are set to galvanise the global community to achieve hard-to-reach targets. The goal to eliminate extreme poverty is one of the most difficult, but also one of the most important goals. Nothing is as debilitating as hunger: children cannot pay attention in class, adults do not have energy to search for or undertake work and life is a struggle for existence. Over prolonged periods, hunger translates into malnutrition and stunting with life-long implications.
Fortunately, many lessons have been learnt as part of the Millennium Development Goal process, and this time around, we can expect greater focus on monitoring achievements and public accountability.
Globally, inequality is rising, but we can’t take our eye off what happens at the bottom – for this is where life is most excruciatingly unfair.
Jakkie Cilliers, Executive Director, ISS
