8 Facts about Africa to
Understand Poverty in the Continent

Published Oct 2011

Fact #1: African poverty is rooted in an unfair economic system and in political instability

Understanding Africa and understanding the whole context surrounding the crisis the continent has been through for decades is crucial to decipher the problem of African poverty. From the origins of poverty, to colonization, corruption, tribes and ethnic issues, living standards in Africa, the impact of globalization and international aid.

Knowing that it’s very hard and risky to make any generalization, let’s yet try to see some of the commonly accepted origins of African poverty.

The African economic crisis

If things are more mixed nowadays with countries doing “okay”, by the mid-1990s most countries were in a worse state than they were after their independence. A few reasons for that:

  • The population increased much faster than the continent’s economic growth (when there was any), that’s why China and India have taken one child policies so seriously;
  • Exports have declined in part due to unfair trade deals and subsidies in richer countries (litigations are being settled through the WTO in the past few years and Africans start to win);
  • Food production has experienced severe droughts and mismanagement and thus declined; the need for food in Africa hasn’t been met with the creation of big enough import industries (maybe because of dependency on international aid).

And well, many other things did NOT happen like industrialization – though long awaited and foreseen – or debt reduction, on the contrary most African countries became massively indebted.

You can also count the fall in public revenues (again partially due to aid dependency, hence no incentive to create a proper state and resource management system), and consequently the collapse of public services throughout the continent. Lack of the most basic infrastructure (roads, phone, schools, hospitals, banking system,…) remains a problem everywhere.

The crisis of the African economy also caused the marginalization of the continent; it left it sort of a lost continent while the whole world has been partying on international trade, “interconnectedness” and interdependency, the Internet and other new financial services (to name a random few).

Political incompetence, instability and corruption

The countless massacres and deaths caused by ethnic rivalries and lust for power across Rwanda, Mozambique, Somalia, Sudan, Congo (and so on) are high on the list of the causes of African poverty. They also cause entire populations to flee their home countries and live in makeshift refugee camps.

Instability is by no means attractive to investors so obviously these countries are rarely able to attract any foreign investment. Likewise, widespread and all-pervasive corruption isn’t very sexy to investors who don’t wish to see their money sucked up by greedy officials, just like a good share of international aid often disappears.

But hell… incompetence, greed and corruption exist everywhere so things are very complex when trying to understand Africa (as for any country). It’s often best to listen to what the people itself has to say. And realize that the so-called Western democracies have supported African dictators for decades and turned a blind eye to their crimes as long as they’d get their oil, coffee, cocoa, uranium and whatnot. In any case the word gets around and a new generation is rising against incompetence and corruption in Africa. They’re involved in many sectors across the government, businesses or local NGOs.

Fact #2 Ethnic diversity creates more corruption, instability and worse performance in terms of institutions and economy

Africa is the most ethnically diverse continent and also the poorest. But the problem with its ethnic tensions is also due to colonialism. Have a look at a map of Africa and you’ll see how the French and the British – for the most part – divided the continent using a ruler!

They forced completely different people to live together and strive for political power and resources. Because obviously once one group obtains more power it tries to keep as much resources as it can for itself. Consequence: the well-known, bloody rivalries.

But this also means something very important for building a nation on the grounds of cultural diversity and cooperation in order to build stability, peace but also rebuild a social fabric between culturally different people. But nation-building can prove a dangerous game. In some cases it can be used to repress minorities for not fitting in the mold, in other cases the dominant group feels like its losing its way of life. But some countries like Tanzania have been relatively successful at celebrating ethnic diversity – without having to “kill” anyone’s culture or language – and have brought stability and economic growth.

Fact #3: Living standards have improved a lot, but not for everyone

The least to say is that progress has been inconsistent. Be it economically or in terms of well-being (e.g. child health) or access to elementary services (especially education), for the past forty years things have been… fluctuating. Every other economic crisis, drought, dictator, ethnic clash have fully helped this going back and forth in improving living standards.

Often times progress is socially segregated: the rich-ish get better while the super poor get worse, or one ethnic group gets preferential treatment while the other… is neglected, at best.

Fact #4: Health and education in Africa are getting better - but not nearly enough

There’s clearly a problem between spending for health and education in Africa and the outcomes they get out of it. Most countries invest more GDP per capita than most countries across Asia for much worse results. Now whether that money goes where it’s supposed to is another story. The problem remains that health and education are still at very poor levels. For instance, children stunting rates are still way too high.

Where health and education are interesting aspects of poverty reduction is that unlike income inequalities they should depend on less factors than all this messy market-trade-labor system. Technically spending on provision of public services alone is enough to reduce poverty in terms of health and education.

Truth be told though, educational levels have been improving it’s true, simply not by as much as was expected. At least with that improvement came related decrease in poverty. Plus the plague of HIV has brought a massive and unexpected burden to health costs and budgets for both African governments and populations.

Fact #5: Globalization made poverty worse (in some ways)

The debate’s still pretty heated worldwide considering that globalization generated both growth and inequalities. But in Africa poverty has definitely remained at a high rate while economic development didn’t really take off to say the least.

Yet there are some regions and countries where trade really boomed, which resulted in big inequalities within the population between those who can take advantage of globalization and the rest. The huge contradictions between different sectors (e.g. urban & rural economies) as well as those between tribes and ethnic groups make it impossible to consider trade as the only means to reduce inequalities in Africa. 

As for assessing changes in poverty it’s still hard to do because of the lack of data on Africa continent-wide which is why many experts rightfully call for a case-by-case study working with local poverty lines to better account for differences. Overall it’s safe to say that many countries have registered a decrease in poverty while many others have experienced the opposite trend. For the rest, poverty remained simply high.

Fact #6: Aid thy neighbor, but not too much

Sub-Saharan Africa is receiving more aid than ever before, and the amount was set to double from 2005 to 2015 (to reach nearly $200bn). Now the problem is that, more and more (expert) voices are being heard against this increase because the efficiency of classic top-down aid reaches a limit up to a certain point. Worse, too many African governments are completely dependent on aid… in a bad way. 

They got so used to receiving money whenever they needed some that they often don’t even take fiscal and public revenue seriously. As a result, the whole institutions of dozens of countries are underdeveloped, when hardly existing, profoundly flawed and mismanaged (if managed at all). Everybody just relies on the informal sector which means nearly no rule of law in the private sector, no labor protection, no contract etc. And of course it means massive corruption as well since no one’s monitoring or policing whatever is going on.

But humanitarian aid can now be better monitored (in terms of technology) and it should be done systematically. But overall aid should also be more bottom-up and less top-down. Unless when it's for public infrastructures or food, in either case project-based aid is easy to implement and to observe the result. Finally studies have shown that when states don’t rely on their citizens to raise revenues they end up less accountable to them. In other words they don’t care anymore about their needs and are less likely to invest in infrastructures and institutions.

Fact #7: Clientelism and corruption have thrived on flawed aid programs

This seconds the previous “African Facts” and shows that poorly designed aid programs have allowed too many countries to get away with partial, superficial reforms (international aid traditionally comes with strings attached: on the conditions of reforms, usually market liberalization, institutional performance, good governance and whatnot). One indirect consequence of this – and also inherent to African politics – is clientelism as a way of preserving legitimacy. Governments maintain themselves in power in exchange of granting favors either to specific individuals (VIPs so to speak) or to specific ethnic groups. 

It’s of course a form of corruption since a particular group gets all the public resources at the expense of the rest of the population. Nowadays the picture gets more and more complicated with hybrid forms of modern bureaucracies and more patrimonial system with a sort of aristocracy/bourgeoisie made of big families that trust all the resources and means of production (property, capital,…).

Facts #8: The World Bank asked for reforms unsuited to many countries, in exchange of granting loans

So we’ve seen that many countries have excessively borrowed money and got indebted. Well a big part of that money came from the World Bank, and here again the loans came with strings attached. Usually those stem from the Washington Consensus, which aside from a fair policy of macroeconomic stability also requires neoliberal reforms. These reforms could be summed up as the demise of the state and the faith in the inherent justice of the ideal market that regulates everything by itself. Myth long gone among realistic persons.

The problem is that there are indeed countries on Earth where bureaucracy and administrations are too heavy, but those certainly aren’t African countries which need to build the most elementary institutions and infrastructure. That means they (usually) need a strong central state that will help build everything and decide long term plans. The other problem with neoliberal reforms is also that they encourage a decrease in provision of public services. That was part of the catastrophe for people depending on cheap health care or even just schools or transportation.

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