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Understanding Links between Growth and Poverty Reduction (GP)

The most important features of economic growth in Sub-Saharan Africa (SSA) over the period since independence in the 1960s up to 2000 have recently been summarized in a two volume publication that grew out of AERC's collaborative research project on “Explaining African Economic Growth.”

These features include (i) the divergence of African incomes from incomes in other  developing regions; (ii) slow growth in physical and human capital and notably also in productivity; (iii) limited structural transformation of the economy; (iv) high levels of economic volatility; and, (v) diversity of growth experience.  It is shown that over the period 1950-2001 SSA real per capita income increased by an annual rate of just about 0.7 percent; low compared to an average of 3 percent for the developing world, 1.7 percent for Latin America and the Caribbean, 3.4 percent for Asia, and 2.2 percent for the Middle East, North Africa and Turkey. Moreover, during the most recent decades of 1980-89 and 1990-99 real per capita income growth was negative at 1.1 and 0.2 percent respectively.

In recent years, however, SSA has shown signs of growth recovery. According to the IMF (2009) Regional Economic Outlook, real per capita GDP in SSA grew at an average rate of 1.8 percent for the period 1997-2002, and an average of about 4 percent for the period 2003-2008.  However, growth will have to double from current rates if African countries are to succeed in meeting the Millennium Development Goals over the next decade.

To the consternation of policy makers and economists alike, several African countries’ economies have registered positive economic growth without corresponding reductions in poverty. The literature on pro-poor growth identifies a strongly pro-poor process as one that reduces inequality in the course of raising mean consumption. Such a process raises the incomes of the poor faster than those of the non-poor. An anti-poverty strategy must therefore have a growth strategy - a diagnosis of the relevant growth opportunities and institutional and policy initiatives required to seize them- at its core.

To understand the above scenario, Understanding Links between Growth and Poverty Reduction Project seeks to identify the nature of economic growth that results in poverty reduction.  Accordingly, a concept note on this project was approved by the AERC Program Committee at its meeting in December 2005 clearing the way for commencing the project. 
Membership of Project Steering Committee

  1. Olu Ajakaiye (Chair)
  2. Ali A. Ali (Project Coordinator)
  3. Andy MacKay (Project co-Coordinator)
  4. Erik Thorbecke
  5. Ernest Aryeetey
  6. John Mbaku
  7. Machiko Nissanke
  8. Steve O’Connell

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