Poverty, the inability to satisfy basic human needs is endemic in Africa. Unfortunately, the continent is blessed with enormous human and material resources to meet its needs and stimulate growth and prosperity.
Many factors such as illiteracy and lack of good governance have been identified as being responsible for this. Recent global developments such as the COVID-19 outbreak have made the matter worse.
According to the Economic Report on Africa 2021(ERA2021) inaugurated by the Economic Commission for Africa (ECA), the disruptions caused by the COVID-19 pandemic pushed an estimated 55 million Africans into extreme poverty in 2020.
The pandemic reversed more than two decades of progress in poverty reduction on the continent.
- Questions over unending killings in Benue
- Navy arrests 27 vessels, deactivates 294 illegal refinery sites
Reports show that in 2019, 424 million people in sub-Saharan Africa lived in severe poverty and 460 million in 2022.
Based on the Economic Development in Africa (ECA) Report 2021, Africa stands out as the most affected region in the world in terms of loss of income of poor households.
The Chief Economist of ECA, Hanan Morsy, says Africa currently accounts for more than half of the World’s poor at 54.8 per cent.
Morsy, during the 55th session of the Conference of African Ministers of Finance, Planning, and Economic Development in Addis Ababa, Ethiopia, said the continent faced a tsunami of global shocks that have exacerbated existing socio-economic operation and equity.
She said because of these shocks; the continent currently accounts for more than half of the world’s poor at 54.8 per cent.
“We have estimated 548 million Africans living in poverty in 2022 and 149 million at risk of falling into poverty in the same year.
“There is a skewed distribution across the continent in terms of concentration of these issues, with particularly East and West Africa having a higher share of poverty across regions,’’ she said.
Morsy said the situation was further exacerbated by existing inequalities, noting that even in times of high economic growth in Africa, the rate of inequality still rose.
“We need to pursue inclusive macroeconomic policies such as targeted and efficient spending and build resilience to future shocks at the household and community level.
“African governments need to enhance resource mobilisation. To do that, I think several measures would help, including closing tax loopholes.
“Africa loses 40 to 60 billion dollars annually in tax evasion. There’s also funding that can be raised through tackling issues of illicit financial flows,’’ she said.
Mr Adam Elhiraika, Director Macroeconomic Policy Division, ECA, said many African countries were struggling to meet the continent’s development goals due to the impact of severe and mutually reinforcing shocks.
According to Elhiraika, the continent has encountered severe developmental challenges due to increasing poverty, high inequality rates and a lack of decent jobs.
He reiterated that the COVID-19 pandemic, the Ukrainian war and the resultant food and energy crisis, rising inflation, debt tightening, and natural disasters were critical factors to the challenge.
He spoke at a recent at a meeting of experts to herald the 2023 Conference of African Ministers of Finance, Planning, and Economic Development in Ethiopia.
Elhiraika said Africa’s growth dwindled from 4.6 per cent in 2021 to 3.6 per cent in 2022 and is anticipated to grow by 3.9 per cent in 2023.
“In 2022, an additional 18 million new poor emerged in Africa, with more than half the highest proportion of the world’s poor at 54.8 per cent.
“This is alarming because 546 million people were living in poverty in 2022, which is more than half of the continent’s population,” Elhiraika said.
To enable countries on the continent to advance, in spite of the challenges they encountered, the ECA pledged its unreserved commitment to support and provide shields where necessary.
Acting Secretary-General of ECA, Antonio Pedro, said Africa needs adequate financing to tackle poverty on the continent and cushion the vulnerable groups while meeting its long-term development objectives.
Pedro, at the conference, reiterated that evidence showed the effects of COVID-19, the war in Ukraine, the looming debt crisis, and climate change impacts characterised the deep and interlocking crises in Africa.
He said overcoming these challenges, occasioned by the overlapping crises, would require African countries to formulate innovative and multifaceted strategies that provide a range of policy options.
The acting secretary explained that implementing the agreement establishing the African Continental Free Trade Area (AfCTA) continued to be the blueprint for the African pro-poor economic recovery.
He said there was the need to expedite action on the agreement’s implementation, given its numerous benefits to member states, including resilience to shocks.
Similarly, the African Union Commissioner for Economic Development, Trade, Industry and Mining, Albert Muchanga, said African continental efforts alone were not sufficient to solve the problem.
He, therefore, urged the reform of the global value chain, focus on developing regional and continental value chains and the need for African countries to invest at least one per cent of their GDP in research and development.
Muchanga said the commission was designing a programme that would enable Africa to move from being a producer and exporter of raw materials to an exporter of manufactured goods, agro-processed foods, and services.
The commissioner, however, said Africa faced a climate finance challenge, which could lead to increased climate-induced poverty across the continent.
Meanwhile, highlighting some of the resolutions at the end of the conference, its Chairman/Ministerial Committee of Uganda, Henry Ariganyira, said women and youth empowerment was imperative for the continent’s development.
“Member States are called to leverage the agreement establishing the AfCTA to strengthen their resilience to future economic shocks and maintain sustainable growth.
“They should use it to create wealth and increase domestic resource mobilisation through prudent and targeted public spending, modernise the tax system and adopt home-grown fiscal and monetary reforms that attract small and medium-sized investors”, she said.
Experts say that to address its poverty challenge, African countries should look more inwards with a view to harnessing the continent’s abundant resources rather than depending on handouts and economic templates developed for the continent in foreign lands. (NANFeatures)
Nigerians can now earn US Dollars by acquiring premium domain names, most clients earn about $7,000 to $10,000, all paid in US Dollars. Click here to learn how to start.