The higher the country’s income, the higher the levels of inequality. This is according to preliminary findings of a new report on economic growth and income inequality in Southern Africa.
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 2000-2006 and from 43 to 56 between 2003-2008, respectively. Southern Africa 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.
Ministry of Finance Permanent Secretary, Mr Nkulukusa in his key remarks read on his behalf said high levels of inequality were detrimental to balanced and sustainable growth. He said that the levels of inequality especially in rural areas was unacceptably high and that inequality leads
to under-investments in education. “Inequality of income leads to inequality of education. Children from lower income families end up in lower-quality schools and lower quality education resulting in a workforce that is less productive than it would be in a more equitable economy whilst transmitting and sustaining inter-generational poverty” he said.
Nkulukusa said the Government of Zambian was addressing this misnomer by implementing social protection programs. “To highlight this commitment, Government’s contribution to the social cash transfer scheme in the 2014 national budget was scaled up by over 700 percent. The highest that the social transfer scheme has ever received.” He said.
Meanwhile, 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 Oder to address income inequality. He said adjusting policies to be more inclusive was necessary. “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 that we at that time truly believe is the right thing to do? We have to go further, dig deeper into the reasons why we have such pervasive growing inequalities, despite so many of the indicators on growth and development that e are using telling us a different story.
On his part, ECA Southern Africa Regional Office, Director, Said Adejumobi said 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. The problem of Sub-Saharan Africa is one of the most inequitable regions of the World, second only to Latin America. Southern Africa takes an unenviable first place as the most inequitable region on the continent and one of the worst cases in the World.”
Adejumobi said that the liberal economic theory which argues that as an economy grows, there is trickledown effect, 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 studywhich will be published and launched in the course of the year.