The Millennium Development Goals (MDG) were adopted by the United Nations in 2001 as key targets for the developing world. These goals are also commonly accepted as a framework for measuring development progress. The MDGs have elicited great interest and attracted broad support from the international community including international development organisations, donor countries and Governments.

This CAI paper discusses the first Millennium Development Goal, eradicating extreme poverty, unemployment and hunger by 2015, with reference to Africa. It is a contemporary perspective on how far Africa has progressed towards MDG 1. The paper traces and enquires into the trends in poverty, employment and hunger in Africa. The aim is not to predict whether or not Africa will achieve MDG 1 but to discuss the progress achieved on MDG 1 so far, the limiting factors and the policy measures required to achieve this goal.

The first MDG

The first MDG focuses on eradicating poverty, unemployment and hunger by 2015. It is further divided into more specific sub-goals or targets: ⁽²⁾

• Target 1A: Halve, between 1990 and 2015, the proportion of people living on less than US$ 1 a day;
• Target 1B: Achieve full and productive employment for women, men and young people; and
• Target 1C: Halve, between 1990 and 2015, the proportion of people who suffer from hunger.

Each of the above targets has a set of indicators used to assess progress. The first MDG is crucial as it has extensive linkages with, and spillover effects on, the next seven MDGs.

Goal 1 and Africa

Although Africa has witnessed rapid economic growth in the last decade (2000-2010), wherein the average gross domestic product (GDP) growth rate hovered around 4.8%,⁽³⁾ this has not translated into proportionate reductions in poverty and hunger, nor has the growth been able to create widespread employment. The slow pace of poverty reduction is attributable to inconsistent and inadequate economic growth, rising population growth, low growth elasticity of poverty ⁽⁴⁾ and persistently high levels of gender and economic inequalities (notably towards rural dwellers).

Why is the first MDG so important? The first goal has extensive linkages with, and implications for, all other MDGs. Reducing poverty is not only an end in itself, it is also a means to accelerating progress for the rest of the MDGs. For example, an increase in purchasing power often has positive effects on families’ education and health decisions. People living above the poverty line and having stable jobs are more capable of educating their children, of facilitating access to basic medical services and of contributing to decisions that affect their lives and livelihoods and those of their children. Progress on this indicator has positive spillover effects that create a virtuous circle between Goal 1 and other MDGs.

Africa’s progress on Target 1A

Target 1A seeks to halve the proportion of people living on less than US$ 1.25 a day at purchasing power parity (PPP) between 1990 and 2015. Poverty is in a slow decline in Africa, but the continent as a whole is likely to miss the 1A target. Africa has experienced a decline in poverty rates as well as in absolute number of poor people. However, this rate of decline has been too slow to achieve the target by 2015. On average, poverty declined by only 0.5% per annum in sub-Saharan Africa between 1990 and 2008. The proportion of people living on less than US$ 1.25 a day in sub-Saharan Africa decreased marginally from 56.5% in 1990 to 52.3% in 2005, and further to 47.5% in 2008, whereas North Africa has already reached its target.⁽⁵⁾ The United Nations estimates that 35.8% of the population in sub-Saharan Africa is in a situation of extreme poverty.⁽⁶⁾

In the past, the number of people living in extreme poverty in sub-Saharan Africa has increased from 289 million in 1990 to 394 million in 2005.⁽⁷⁾ This trend was reversed by 2008. The number of people living below the US$ 1.25 a day line fell by 9 million.⁽⁸⁾ If one considers a US$ 1.00 a day poverty line, reductions in the number of poor people were even more significant as 32 million people then moved out of extreme poverty.⁽⁹⁾ The absolute number of people living below the poverty line is highly sensitive to the definition of ‘poverty line’. If the poverty line was fixed at US$ 2.00 a day, 3.2 million people fell below the poverty line,⁽¹⁰⁾ highlighting the existence of vulnerability between US$ 1.25 and US$ 2.00 a day poverty lines.

Though Africa as a region may miss the Target 1A, a number of African countries are well on track. Tunisia, Egypt, Cameroon and Guinea have achieved the target while Senegal, Gambia, Swaziland, Uganda and Mauritania are very close to halving extreme poverty, at about 5 percentage points from the 2015 target.⁽¹¹⁾ Ghana, South Africa, Mali and Niger are about 10 percentage points away. However, five countries, namely Côte d’Ivoire, Kenya, Madagascar, Nigeria and Morocco, have regressed on this indicator.⁽¹²⁾

The decline in poverty in some countries is driven by reducing inequality, falling fertility rates, improvements in social safety nets and rising wage employment. For example, Rwanda’s 2010-2011 household survey reveals that the incidence of poverty fell by about 12% between 2005-2006 and 2010-20011, from 56.7% to 44.9%.⁽¹³⁾ This was made possible by strong economic growth in the past decade. Similar progress was witnessed in many other African countries where the income per capita has increased significantly over the past decade. Twenty-four out of 53 African nations have doubled their income per capita from 1990 to 2010, led by Equatorial Guinea, Angola, Nigeria, Cape Verde, Egypt, South Africa and Mauritius.⁽¹⁴⁾ All these countries, except Cape Verde, are resource-rich countries and have benefited from the commodity price boom of the past decade.

Trends in poverty in Africa

Poverty in Africa is spatial in nature and is concentrated in rural areas. Out of 53 African nations, 37 have data on urban and rural poverty indicating a wide disparity between the two. Rural poverty is at least three times as high as urban poverty in Morocco, Egypt, Ghana, Zambia, Cameroon, Cape Verde and Rwanda.⁽¹⁵⁾ The deplorable state of rural infrastructure, the paucity of rural livelihoods, youth unemployment, limited access to high-quality education, and high rates of child labour are key drivers of rural poverty.⁽¹⁶⁾

Some African countries, namely Egypt, Cameroon, Morocco, Kenya, Cape Verde, South Africa, Guinea and Madagascar, have ‘feminine’ poverty, i.e. relative to men; women are disproportionately affected by poverty.⁽¹⁷⁾ This is attributable to a host of reasons. Women are often involved in domestic work and do not have wage employment. When they do, they are often employed in low-wage jobs. Restricted access to economic resources and the lack of education are also important in female poverty. This situation is, however, not homogenous throughout Africa. Ethiopia and the Central African Republic (CAR) have a more gender-balanced distribution of poverty ⁽¹⁸⁾ and poverty is biased against men in most East African countries.⁽¹⁹⁾

Why is poverty declining so slowly in Africa?

A number of economic, social and demographic factors, including political instability and conflicts in some countries, are accountable for the slow decline in poverty in Africa. The crucial factors are discussed below.

The first key factor is the insufficient and inconsistent economic growth on the continent. Africa needs, or would have needed, to grow at an average of about 7% a year for countries to halve the proportion of people living below the poverty line between 1998 and 2015.⁽²⁰⁾ However, from 2000–2010, average growth rates (aggregate and per capita) fell short of the required rate in each African sub-region.⁽²¹⁾

Secondly, high population growth seriously weakens the link between economic growth and poverty reduction. Africa’s average annual population growth rate between 1990 and 2010 stood at 2.4% ⁽²²⁾ whereas its GDP per capita grew on average by 2.1% per annum.⁽²³⁾ The growing population also increases the pressure on scarce economic resources, exacerbating the huge pressures on public spending that Africa faces owing to its distinct challenges, such as pervasive malaria and HIV/AIDS. Also, poverty itself increases population growth; because poverty and its determinants (such as subsistence agriculture, little education, child fostering, and the subordinate position of women) tend to perpetuate high fertility rates.⁽²⁴⁾ As seen in Rwanda in recent times,⁽²⁵⁾ reducing Africa’s high population growth is important to addressing poverty.

Thirdly, one of the main reasons why appreciable economic growth has not translated into steep poverty reduction, is the relatively low responsiveness of poverty reduction to growth, i.e. a weak growth elasticity of poverty. In Africa, the average growth elasticity of poverty (absolute value) stands at 1.82, less than in other developing regions. The low growth elasticity of poverty marks a weak connection between growing sectors of the economy and the sectors where the poor work, as well as spatial disparities between areas with strong growth and areas where the poor live.⁽²⁶⁾ A multitude of interconnected factors influence the response of poverty reduction to economic growth, but the growth elasticity in Africa is underpinned by the absence of a diversified economy, poor access to credit and insurance, low human and physical capital, poor infrastructure and weak systems of social protection. Thus the strengthening of the relationship between growth and poverty reduction in Africa has implications for the annual rate of GDP growth required to halve the proportion of the population living on less than US$ 1.25.⁽²⁷⁾ Regions with a higher growth elasticity of poverty and slower population growth usually require slower GDP growth to reach the MDG target. To meet target 1A, East and West Africa with the highest population growth rates, require 5.90% and 5.96% annual GDP growth respectively whereas Southern Africa, with the lowest growth elasticity of poverty, requires 5.60% GDP growth a year to halve poverty.⁽²⁸⁾

Lastly, the responsiveness of poverty to economic growth is also weakened by wide economic inequality in Africa. Economic inequality significantly reduces the gains from growth that accrues to the poor.⁽²⁹⁾

Africa’s progress on Target 1B

Target 1B seeks to achieve full and productive employment and decent work for all, including women and young people. Africa’s annual employment growth for 2012-2016 is expected to reach 3%, i.e. much higher than the world average of 1.3%. However, Africa’s annual labour productivity growth, currently at 2.3%, is expected to decline over 2014-2016 to 1.9%.⁽³⁰⁾ Overall, improvements in the business climate in some African countries and the drive for African markets by both the emerging and Western countries are expected to create employment opportunities in the region. To assess the progress on target 1B, a host of indicators are employed, namely the growth rate of GDP per person employed, the employment-to-population ratio, the proportion of employed people living below US$ 1.25 a day and the proportion of own-account and contributing family workers in total employment.

Progress on target 1B can also be assessed in terms of the growth rates in ‘GDP per person employed’, a productivity indicator. Labour productivity is central to economic growth, improving livelihoods, reducing poverty and inequality. Factors that influence labour productivity include capital investments, organisational capacity, labour technology and skills. On the African continent, labour productivity is low and labour productivity growth declined in the aftermath of global financial crises.

In Africa, the number of working poor (employed persons earning less than US$ 1.25 a day) has decreased over the last decade but remains high relative to other developing regions. Working poor accounted for 39.1% of total employment in sub-Saharan Africa in 2011, compared to 54.8% in 2000.⁽³¹⁾ The decline is attributable, in part, to strong economic growth which pushed wages above the international poverty line and to affirmative action policies undertaken by various African Governments. For example, many African countries, like Algeria, Angola, Cameroon, Mauritania, Nigeria and Tanzania, have increased their minimum wages in 2008-2010.⁽³²⁾

Any discussion on employment in Africa must include vulnerable employment. The International Labour Organisation (ILO) defines vulnerable employment as “the sum of own-account workers and contributing family workers.”⁽³³⁾ Vulnerable employment is characterised by inadequate earnings, low productivity and difficult conditions of work that undermine workers’ fundamental rights. In Africa, the informal sector has been the main driver of job creation and vulnerable work accounted for 70% of employment growth from 2007–2011.⁽³⁴⁾ Four out of 10 employed people in North Africa in 2011 were in vulnerable employment. In sub-Saharan Africa, vulnerable employment accounted for 76.6%, in reduction of 3.8 percentage points in the past decade.⁽³⁵⁾

The vulnerable employment figures are disproportionately driven by women and youth. In North Africa, men are less likely (32.2%) to be employed in vulnerable jobs than women (55.1%).⁽³⁶⁾ For the rest of Africa, the probability is far higher for women (84%) to be vulnerably employed than for men (70%).⁽³⁷⁾ The dominance of the informal sector and the few (or missing) social protection systems partly explain the high proportion of vulnerable workers in Africa. As the above discussion indicates, some progress has been achieved in Africa in context of Target 1B but reaching full and productive employment by 2015 is improbable.

Africa’s progress on Target 1C

Target 1C seeks to halve, between 1990 and 2015, the proportion of people who suffer from hunger. Africa’s progress on this target is slow. The 2011 Global Hunger Index ⁽³⁸⁾ from the International Food Policy Research Institute (IFPRI) shows an improvement of 18% during 1990–2011 in sub-Saharan Africa, compared to 25% in South-East Asia and 39% in North Africa.⁽³⁹⁾ These regional aggregates obscure the large country variations in progress on Target 1C. For example, significant improvements in Ghana, Mauritania, Angola and Congo counterbalance a sharp worsening in the Democratic Republic of the Congo (DRC).⁽⁴⁰⁾ The trend in Central, East, Southern and West Africa trammelled between 1990 and 1996, improved slightly in 2001 and then declined more markedly in 2011.⁽⁴¹⁾

Another important indicator used to assess the progress on Target 1C is the prevalence of underweight children under five years of age. On this indicator, sub-Saharan Africa has not improved enough to ensure that it will meet the target by 2015. Central, East, Southern and West Africa improved slightly from 27% to 22% between 1990 and 2009. This improvement in regional aggregates masks again wide disparities between African countries. In Botswana, the prevalence of underweight children under five years of age is about 13% whereas in Niger it is as high as 40%.⁽⁴²⁾ Child malnutrition is an underlying cause of more than a third of under-five deaths,⁽⁴³⁾ and also has negative spillover effects on other MDGs.

Policy recommendations

Significant advances in income poverty reduction have been made across Africa but disparities exist within and amongst countries. The dominance of rural poverty and the feminised nature of poverty should be given more attention and be designated policies for addressing overall poverty. Lessons from countries like Rwanda underscore the importance of reducing inequality to facilitate a rapid decline in poverty. Policies to promote inclusive growth with emphasis on agriculture and the informal sector can increase the growth elasticity of poverty. Polices targeted at slowing down population growth and increasing social protection are also crucial for poverty reduction in Africa.

Africa has an encouraging average annual employment growth rate (of 3% for 2012-16). This indicates Africa’s strong potential to generate jobs in the medium term. Policy intervention for expanding jobs and increasing labour productivity should focus on creating a business environment favourable for foreign and private investment, improving access to machinery and equipment, boosting physical and institutional infrastructure, improving the quality of human resources and improving working conditions.

Addressing hunger, i.e. ensuring food security, would require a two-pronged policy response. Short-term measures should focus on improving the access to health services, providing food assistance and targeting vulnerable sections of the population (namely women and children). Following the African Union’s Comprehensive Africa Agricultural Development Programme,⁽⁴⁴⁾ long-term policies and strategies should focus on promoting the use of fertilizers, improving the access to disease and drought resistant seeds, encouraging all-season farming and providing market information, credit and insurance to farmers.

Conclusion

In the context of the first goal of the MDGs, Africa has made significant progress on targets of poverty, unemployment and hunger. In order to meet these targets by 2015, the rate of progress needs to be accelerated, however. It is important to think of MDGs as yardsticks to measure the developmental progress of a region, and not as an absolute. A region’s ability to achieve the MDGs is dependent upon a host of internal and external factors. The resources at Africa’s disposal, the magnitude and complexity of challenges it faces and other dimensions – economic, social, and demographic – influence Africa’s ability to meet the MDGs.

African Governments, institutions, donors and development agencies regard the MDG framework as a metric to determine developmental progress in Africa and are committed to meeting the MDGs. Achieving MDG 1 (and other MDGs) is a daunting challenge for African countries, given their structural problems, the lack of adequate foreign investments, their excessive dependence on natural resources, their inadequate infrastructure, high levels of poverty and malnutrition, and recurrent civil strife in many nations. However, Africa has made encouraging progress on MDG 1 and has the potential to achieve it. Whether Africa will achieve MDG 1 by 2015 is conjectural, but what is certain is that it is on track to meeting this goal.

Written by Sudhanshu Sharma ⁽¹⁾

NOTES:

(1) Contact Sudhanshu Sharma through Consultancy Africa Intelligence’s Finance & Economy Unit (finance.economy@consultancyafrica.com).
(2) United Nations website, http://www.un.org.
(3) Clark, D., ‘Africa's economic growth saga’, Institute for Africa and Middle East Studies, February 2012, http://iames.gov.vn.
(4) The growth elasticity of poverty measures the reduction in poverty associated with a unit increase in growth. The higher the growth elasticity, the greater the effects of growth on poverty reduction.
(5) World Bank Database website, http://data.worldbank.org.
(6) ‘The Millennium Development Goals report 2011’, United Nations, http://www.un.org.
(7) Ibid.
(8) Ibid.
(9) Ibid.
(10) Ibid.
(11) World Bank Database website, http://data.worldbank.org.
(12) Ibid.
(13) ‘The evolution of poverty in Rwanda from 2000 to 2011: Results from the household surveys (EICV)’, National Institute of Statistics of Rwanda, February 2012, http://eeas.europa.eu.
(14) World Banks Database website, http://data.worldbank.org.
(15) ‘African Development Indicators 2011’, World Bank Group, August 2011, http://data.worldbank.org.
(16) ‘Gender dimensions of agricultural and rural employment: Differentiated pathways out of poverty’, Food and Agriculture Organisation of the United Nations, 2010, http://www.fao.org.
(17) ‘African Development Indicators 2011’, World Bank Group, August 2011, http://data.worldbank.org.
(18) Ibid.
(19) Ibid.
(20) ‘Africa regional preparatory meeting on the review of the implementation of the Brussels Programme of Action’, United Nations Economic Commission for Africa, March 2010, http://www.un.org.
(21) World Banks Database website, http://data.worldbank.org.
(22) UN Data website, http://data.un.org.
(23) Ibid.
(24) Odusola, A., ‘Poverty and fertility dynamics in Nigeria: A micro evidence’, Centre for the studies of African Economies, 1997, http://www.csae.ox.ac.uk.
(25) ‘The evolution of poverty in Rwanda from 2000 to 2011: Results from the household surveys (EICV)’, National Institute of Statistics of Rwanda, February 2012, http://eeas.europa.eu.
(26) Fosu, A., ‘Growth, inequality, and poverty reduction in developing countries: Recent global evidence’, United Nations University-World Institute of Development Economics Research, 2011, http://www.wider.unu.edu.
(27) Ibid.
(28) Ibid.
(29) Ibid.
(30) ‘Global employment trends 2012: Preventing a deeper job crisis’, International Labour Organisation, 2012, http://www.ilo.org.
(31) Ibid.
(32) ‘Global employment trends 2012: Preventing a deeper job crises’, International Labour Organisation, 2012, http://www.ilo.org.
(33) International Labour Organisation website, http://www.ilo.org.
(34) Ibid.
(35) Ibid.
(36) Ibid.
(37) Ibid.
(38) The index is a multidimensional statistical tool that combines three equally weighted indicators: the proportion of the undernourished as a share of the population; the prevalence of underweight children under the age of five; and the mortality rate of children under the age of five.
(39) ‘The challenge of hunger: Taming price spikes and excessive food price volatility’, International Food Policy Research Institute, 2011, http://www.ifpri.org.
(40) Ibid.
(41) Ibid.
(42) ‘World health statistics 2012’, World Health Organisation, 2012, http://www.who.int.
(43) Ibid.
(44) The Comprehensive Africa Agricultural Development Programme (CAADP) website, http://www.nepad-caadp.net.