Agony of Rising Inequality in Africa As remarkable as Africa’s renaissance may appear, Obinna Chima reckons that the rising spate of inequality on the continent remains a source for concern Magnus Udeh who hails from Ebonyi state, resides and works as an itinerant tailor in Lagos. He moves around major streets in suburbs of Lagos, clanging his scissors, obviously to attract patronage from residents in any area he find himself. Unfortunately, Udeh, who has a family of four, put his average daily income at about N600. “What I make daily is not stable, but on the average I take home N600 daily. But during festive periods, especially as we move towards the end of the year, I make as much as N1000 per day,” he told THISDAY. More so, today in Africa, the gap between the haves and the have nots have continued to widen. On daily basis, thousands of migrant Africans try to enter into Europe and other continents in search of greener pastures in order to get out of what they’ve described as the excruciating poverty in the continent. Nevertheless, while Udeh and a lot of other Africans still wallow in poverty, a recent report by Ventures Africa revealed that the combined net worth of Africa’s 55 billionaires increased by 12.4 per cent from $143.88 billion in 2013 to $161.75 billion in 2014. The report also showed that Africa maintained its number of billionaires during the year. The ranking of these billionaires was based on analysed financial reports and extensive due diligence in tracking their fortunes. Similarly, a separate research by Oxfam International, United Kingdom-based organisations that is determined to mobilise people against poverty, found out that this year, the 85 richest individuals in the world have as much wealth as the poorest half of the global population. It also revealed that the number of billionaires in the world has risen to 1,645 in 2014, up from 793 in 2009, adding that the collective wealth of worlds richest 85 people, who are worth as much as the poorest half of the global population, increases by $668 million a day - almost half a million dollars a minute - over the last year. Of course, while Africa’s growth story is being told in almost every part of the world, from the booming middle class and strong consumer market as well as healthy Gross Domestic Product (GDP) projections, there is a dark side to this. That clearly, is the growing level of economic inequality in the continent. Far from being a driver of economic growth, extreme inequality is a barrier to prosperity for most people in the continent. In Africa and some other countries around the world, prosperity is not trickling down to ordinary people, but up to those at the top, whose exceptional wealth is growing ever more rapidly. There is a growing consensus in the continent that inequality is a crucial challenge and failure to act is both economically and socially damaging. According to the Oxfam report, since 2009, at least one million women have died in childbirth because of a lack of basic health services, and around the world 57 million children are missing out on school, with Africa having a larger fraction of these figures. In addition, it estimated that 70 per cent of the worlds population lives in countries where economic inequality is greater than it was 30 years ago. For instance, the report showed that in South Africa, inequality is presently greater than it was at the end of the apartheid era. Given the current levels of income inequality in African countries, it is estimated that the continents poverty rate would not fall below the three per cent of the population - the World Banks definition of ending poverty, until 2075. The report found that inequality within countries was rising rapidly all over the world, with many nations richest people earning more, both in absolute terms and relative to the rest of the population. Furthermore, it stated that in Nigeria and some other countries, the richest peoples share of national income is large and growing, while the share of more than 1.1 billion people - 16 per cent of the worlds population - is shrinking. Three million people in Kenya could be saved from extreme poverty in the next five years if the country reduced inequality levels by 12 per cent, the report stated. Inequality hinders growth, corrupts politics, stifles opportunity and fuels instability while deepening discrimination, especially against women. The potential benefit of redistributing the wealth of the very richest, by even a tiny amount, tells a compelling story. Oxfam International’s Executive Director, Winnie Byanyima warned that rising inequality could set the fight against poverty back by decades. Byanyima urged world leaders to turn rhetoric into reality and ensure the poorest people get a fairer deal. Byanyima said: “Today wealth is trickling upwards, and will continue to do so until governments act. We should not allow narrow-minded economic doctrine and the self-interest of the rich and powerful blind us to these facts. “Around the world millions of people are dying due to a lack of health care and millions of children are missing out on school, while small elites have more money than they could spend in a lifetime. Byanyima added: “Tackling inequality is not about being envious of fast cars and super yachts – it’s about the fact that the richest literally live longer and healthier lives than the poorest. “We live in a world where there is plenty enough for everyone to improve their lot. Extreme inequality causes instability, conflict and even mental health problems that affect us all. It is time to even it up before it gets worse. “Investment in free public services will be crucial to closing the gap between the richest and the rest. Every year, 100 million people are driven into poverty because they are forced to pay for health care,” the Oxfam executive stressed. Furthermore, Byanyima pointed out that education fees still exclude far too many, saying that in Ghana, for instance, the poorest families would have to pay 40 per cent of their income to send just one child to a low-fee school, underlining the importance of free education for all. But for those at the top it’s a different tale as they have enough assets to last them well beyond their years. “If the worlds three richest people were to spend $1 million every single day each, it would take each one of them around 200 years to exhaust all of their wealth. “This is not a rich country story; today there are 16 billionaires in Sub-Saharan Africa, alongside the 358 million people living there in extreme poverty,” Byanyima added. However, a Senior Lecturer at the Department of Economics, Lagos State University, Dr. Ibrahim Bakare described inequality as a social relationship between the haves and the have nots. This, to him, is also a relationship between the rich and the poor. “The existence of poverty in a society means individuals and groups are drawn into unequal relations with others who are more powerful or have a more privileged position through which they have an advantage. “This is a global scourge affecting different countries in order of relativity and it is very high in less developed countries than in developed countries,” Bakare said. He attributed the rising cases of inequality in the continent to the mismanagement of resources. According to him, this has also led to a situation where state resources in some countries are being used to oppress members of the public. Poor leadership, greed on the part of the political leaders, weaker institutions that are not independent and in the interest of the less privileged, monumental corruption at all levels in Africa, favoritism, amongst others were some of the factors, which according to Bakare has continued to fuel inequality in the continent. “If you look at some African countries like Libya, Tunisia, Egypt, Sudan, and Somali and of course, the unprecedented level of inequality that has pervaded Nigeria, you will see a very deep gap between the rich and the poor. “The level of inequality we have in Africa is so wide and our leaders are not showing any sense of seriousness in order to address this challenge,” Bakare added. Way Forward According to Oxfam report, imposing higher taxes on the rich would raise enough resources to ensure an education for every child in the world and slow the rise in inequality. The report also showed that while the worlds richest people had recovered quickly from the global financial crisis, the benefits of economic growth were not being shared with the majority, including hundreds of millions trapped in poverty. On his part, another Senior Lecturer at the Department of Economics, Lagos State University, Dr. Salami Das-Kareem stressed the need for the development of human capital through education. He urged governments in Africa to develop programmes to would lift a lot of the people out of poverty. “If you want to have equality in the system, the cycle of poverty must be broken through education. Education will make them participants in economic activities and boost entrepreneurship. “There is also need to develop areas of comparative advantage in economies in Africa. Mostly, the agriculture must be encouraged. There is need to develop public-private partnership to boost the agricultural sector. In most Asian countries, the percentage of the contribution of agriculture to the GDP in most countries is as high as 30 per cent,” Das-Kareem added. Also, Oxfam’s Chief Executive, Mark Goldring, wealthy minorities around the world were taking an ever-increasing share of the pie, and called on world leaders to close the gap between rich and poor. This is not just an issue of fairness, but in a world where people are dying of hunger or because they cant afford healthcare, it becomes an issue of life and death, Goldring said. The report calculated that taxing billionaires 1.5 per cent of their wealth over $1 billion could raise $74 billion a year, enough to get every child in the world into school and to deliver health services in the worlds poorest countries. Goldring said inequality was holding back efforts to end poverty and called it one of the defining problems of our age. Governments around the world have been guilty of a naive faith that wealth going to those at the top will automatically benefit everyone. Thats not true - it is their responsibility to ensure the poorest are not left behind. Oxfam called on governments to share the tax burden fairly and tackle tax dodging, promote womens economic equality and rights and achieve universal free public services by 2020. On her part, a co-convener of the Bring Back Our Girls (BBOG) Group and former Minister of Education in Nigeria, Dr. Oby Ezekwesili expressed disappointment about the high level of inequality in the country, noting that for any society to develop, there has to be equal opportunity for everyone. However, Ezekwesili identified quality of human capital as a major growth driver in any economy. She said: “The reason for the growth of human capital in other societies is access to quality education. The basis for attainment in society, the basis for social and economic mobility has often been access to education. “Education is a part of economic development. If you want to create an equitable and just society, give quality education.” Furthermore, Ezekwesili said empathy deficit had contributed to the widening inequality. “Poor governance, whether it is health, education, roads, water, agriculture, etc, happens not because of the failure of the institution, but mostly because of the deficit of empathy. “When the society excludes, the excluded will someday wake up and demand their rights. Today, the rich cannot sleep anymore because the poor are awake,” she added. For Bakare, in order to address the developmental challenges posed by the rising inequality in the continent, there is need for policy makers in the continent to design more realistic and sound macroeconomic policies that would impact directly on effective allocation of resources. “In trying to address inequality, we must look at those that have become so strangulated and completely drawn into further state of poverty. The macroeconomic policies that have to be put in place have to those that are pro-poor and very friendly with the less privilege for them to recover from the clutches of poverty. “Our institutions tend to be independent. He that plays the piper dictates the tune and that is the chronological experience of leadership in Africa. If institutions are functional, the problems of inequality and poverty would be addressed. So we need vibrant institutions that would checkmate the excesses of the rich and tyrant leadership. “The question of accountability has remained very challenging in Africa. So, we need accountability to be put in place at all levels. Accountability that is not a respecter of anyone, but would ensure that leakages are blocked,” he said. Also, a former Deputy Governor at the Central Bank of Nigeria (CBN), Dr. Kingsley Moghalu, in his book, “Emerging Africa,” argued that in the continent, national level strategy should be focused on how to create an environment that promotes productivity. He added: “Africa’s sustainable economic development depends greatly on how well each nation is able to create an enabling environment for businesses to thrive, promote trade within the continent and eventually compete globally. “Efficient infrastructure, adequate access to financial and human capital, better living conditions, safety and security, good governance and the rule of law are some of the drivers of enabling productivity.”
Posted on: Wed, 10 Dec 2014 03:12:15 +0000
Trending Topics
Recently Viewed Topics
© 2015