The Inequality Trap: Why Sub-Saharan Africa Struggles to Escape Poverty

Kohnert, Dirk (2025): The Inequality Trap: Why Sub-Saharan Africa Struggles to Escape Poverty.

Abstract

The issue of poverty in Africa is well-known and widely researched. Around a third of the world's poorest people live in Africa. Evidence from more recent years suggests that inequality may be an even greater challenge in Africa than in other developing regions. High levels of poverty and inequality persist in Africa despite it being one of the fastest-growing regions of the last decade. In particular, six of the world's ten fastestgrowing economies between 2001 and 2010 were in sub-Saharan Africa (SSA). Initial inequality reduces the ability of growth to reduce poverty, and even more so if inequality rises during the growth process. Although income inequality fell by 4.3% between 1990 and 2009, Africa remains the second most unequal region globally, after Latin America and the Caribbean. Inequality not only dampens the poverty-reducing impact of growth and lowers the growth rate, but also hollows out the middle class, encourages corruption and rent-seeking, increases crime and violence, undermines social stability and precludes sustained growth. Growth trends in sub-Saharan Africa are not significantly different to those of other developing countries that have fallen into a poverty trap. The combination of endemic poverty, high inequality and low growth is a major obstacle to poverty reduction and overall socioeconomic development in much of Africa. Multidimensional inequality is deeply entrenched in much of Africa and exhibits vertical and horizontal dimensions that hinder human development. The roots of inequality lie in the colonial past and have been reinforced by institutions that limited access and were established by the colonisers and maintained by generations of African leaders since then. Attention should also be paid to the diachronic dimensions of inequality, especially how inequality changes over individuals' lifetimes and its effect on intergenerational mobility. As effective democratic practices take firmer root on the continent, it can be expected that pressure for general and inclusive social redistribution will increase. Providing social protection contributes to reducing poverty and inequality in Africa. Additionally, rising income inequality contributes to increased CO₂ emissions. Furthermore, an increase in poverty has a detrimental effect on environmental pollution in sub-Saharan African countries. Over half of adults infected with HIV in Africa are female, yet poverty and social structures still prevent many women from protecting themselves. Current strategies to change HIV-related behaviours continue to fail women and girls in Africa.

• Item Type: MPRA Paper
• Language: English
• Keywords: Poverty; inequality; economic growth; Sub-Saharan Africa; Nigeria, South Africa; DR Congo
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Household Saving; Personal Finance; D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions; D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E26 - Informal Economy ; Underground Economy; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E64 - Incomes Policy ; Price Policy; F - International Economics > F2 - International Factor Movements and International Business > F24 - Remittances; F - International Economics > F5 - International Relations, National Security, and International Political Economy > F54 - Colonialism ; Imperialism ; Postcolonialism; I - Health, Education, and Welfare > I1 - Health > I14 - Health and Inequality; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N17 - Africa ; Oceania; N - Economic History > N3 - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy > N37 - Africa ; Oceania; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa; P - Economic Systems > P4 - Other Economic Systems > P46 - Consumer Economics ; Health ; Education and Training ; Welfare, Income, Wealth, and Poverty; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification

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