Ideas & Debate

How poverty stands in the way of growth

Healthy people are needed to participate in activities that boost economic growth. FILE PHOTO | NMG
Healthy people are needed to participate in activities that boost economic growth. FILE PHOTO | NMG 

The fact that Africa struggles to meet development goals is not a secret but an understanding of the role poverty plays in this process is less common.

Africa seems to be caught in a vicious cycle where a poor status of development exacerbates poverty — and poverty negatively affects the ability of Africans to meet development goals.

According to the organisation World Hunger, in 2012, 47 per cent of the population of sub-Saharan Africa, lived on $1.90 a day or less, which is below the poverty line.

Twenty-two per cent of the world’s human development is lost due to inequality; the figure is 32 per cent in Sub-Saharan Africa.

There are several means through which poverty curtails Africa’s ability to develop.

First is the role of poverty in economic growth. Poor Africans do not have the savings required to invest in activities that would boost their income. Further, poor Africans are seen as high risk and thus are routinely denied access to credit streams that would enable them to improve their financial status. Thus being poor, makes it harder to get the financial support required to get out of poverty.

Secondly, there are effects of poverty on health and education. Higher levels of income reduce infant mortality and better education in terms of primary and secondary school enrolment rates, positively associated with higher levels of income.

But the reality is that poor people often cannot afford the healthcare they require, nor are they able to educate their children to basic levels of education.

Thus the fact that almost every one in two Africans are in a state of poverty means that half of the continent has a fundamentally compromised ability to afford healthcare and education, a reality that then makes the prospects of rising out of poverty more difficult. Poor health compromises one’s ability to physical work and exerts a great toll on income growth.

Poor education ensures that millions of Africans are vulnerable, stuck in low paying jobs, often in the informal economy that routinely undercompensate. Poverty itself makes it difficult for Africans to rise out of poverty.

Finally, poverty negatively affects human development itself. Research has found that exposure to poverty in early childhood impacts brain development.

Damaging effects can range from poor cognitive outcomes and school performance, stunted development, limited future productivity as adults and intergenerational transmission of poverty, to a higher risk for antisocial behaviours and mental disorders.

According to Unicef, nearly half of all children in sub-Saharan Africa are living in extreme poverty; children are twice as likely as adults to be living below the poverty line.

And because more children live in poverty, they are much less likely than an adult to cope with extreme poverty because of stunting, infant mortality and compromised early childhood development.

The good news is that this can all change. For example some of the negative effects of poverty on children’s brains can be mediated by support of the children’s caregivers.

It is time Africa developed a strategy on how the negative effects of poverty on development can be systematically eliminated.