Several African countries are among today’s fastest growing economies in the world, boosted in many instances by new discoveries of oil, natural gas and strategic mineral reserves. Extreme poverty on the continent is in decline, and progress toward meeting the millennium development goals has accelerated. A number of very poor African countries, including Malawi, Sierra Leone and Ethiopia have made recent and substantial improvements in their levels of income equality.
Yet Africa’s impressive growth is not shared by millions of its people. Sub-Saharan Africa is home to a third of the world’s poorest people, and six of the top 10 most unequal countries in the world.
Where income inequality is high, the benefits of economic growth are inaccessible to poor people. Poverty and exclusion are bad for social stability, preventing productive investment and undermining growth itself.
The continent’s potential is also being undermined by illicit capital haemorrhaging out of African countries – often in the form of tax evasion and trade mispricing by multinational oil, gas and mining companies, and in collusion with corrupt elected officials.
In 2010, Africa’s oil, gas and mineral exports amounted to $333 billion in 2010. But estimates of illicit financial outflows from Africa are up to $200-billion annually, dwarfing the development aid it receives.
Together, income inequalities and illicit capital flows are cheating Africa of its wealth and potential for the investments in education, agriculture and healthcare needed to support productive citizens.
Read more: mg.co.za
