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AfricaMoney | August 24, 2017

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Higher a country’s income; higher the inequality: Southern African study

Higher a country’s income; higher the inequality: Southern African study

The Gini indices for ten countries in Southern Africa shows a consistent pattern of economic growth co-existing side by side with growing levels of inequality. (Image: Health Technology Africa)

The higher the country’s income, the higher the levels of inequality, according to preliminary findings of a new report on economic growth and income inequality in Southern Africa.

The findings of a study undertaken by the Economic Commission for Africa (ECA) Southern Africa Office and UNDP Zambia Country Office indicate a region grappling with high levels of inequality amidst economic growth.

The Gini indices for ten countries in Southern Africa shows a consistent pattern of economic growth co-existing side by side with growing levels of inequality.

This finding is consistent with a 2012 study by the African Development Bank that Namibia, South Africa, Angola, Botswana, Zambia, Lesotho and Swaziland count among the continent’s top ten most unequal countries.

The most striking increase in inequality is found in South Africa and the Central African Republic whose Gini coefficients have risen from 58 to 67 between 2000 and 2006 and from 43 to 56 between 2003 and 2008, respectively, making Southern Africa the most unequal region in Africa and among the worst in the world.

The ECA-UNDP preliminary report is a subject of discussion and review at a two day expert group meeting (19-20 June) seeking to understand the paradox of deepening poverty on the one hand and unprecedented economic growth spanning over a decade on the other.

UNDP Resident Coordinator for Botswana, Anders Pederson, said that women were drivers of change and Southern Africa must begin to address gender inequality and empower and develop women in order to address income inequality.

“But is it enough to only change policies? Haven’t we seen it before? We substitute one paradigm with another; one set of policies with another set…We have to go further, dig deeper into the reasons why we have such pervasive growing inequalities, despite so many indicators on growth and development telling us a different story, ” he cautioned.

On his part, ECA Southern Africa Regional Office, Director, Said Adejumobi, noted that although inequality was a global problem, it had a strong African face, especially a Southern African face.

“We are here to address one of the most contemporary challenges of our times – the problem of economic growth and inequality. Sub-Saharan Africa is one of the most inequitable regions of the World, second only to Latin America.”

Adejumobi said that the liberal economic theory which argues that as an economy grows, there is trickle down effect of economic benefits to the lowest sections of the population, has not worked for Southern Africa.

“Economic growth is good but not enough. Besides a tiny minority, most of our people do not see, do not feel and do not benefit from the fruits of economic growth; they are completely disconnected from the economic progress registered by our countries. As our counties grew, our people tend to suffer more, we need to solve this riddle” he said.

He said that while capitalism was the most progressive social system ever invented by man, it was at the same time exclusionary, dehumanizing, and brutal, requiring mitigation and regular intervention by the state to ensure that it served the interest of the greatest number of people in society.

The expert group meeting will critically review the findings of the study which will be published and launched in the course of the year.

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