High growth marred by unemployment: the African enigma is that poverty and joblessness continue to rise even though economic growth is at a 10-year high says a new UN report. Tom Nevin explains the reason for the anomaly and describes remedies prescribed.

Author:Nevin, Tom
 
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Despite significant improvement in the growth of Africa's gross domestic product (GDP) in recent years, poverty on the continent is higher than in other developing regions. The share of the total population living below the $1 a day threshold, at 46%, is higher today than in the 1980s and 1990s. The implication: poverty has been unresponsive to economic growth.

The enigma of increasing poverty in the face of an economic growth of 4.6% is best answered, says the Economic Report on Africa for 2005, by the fact that the rate is inadequate.

"African countries need to grow by an estimated 7% a year to reduce poverty enough to achieve Millennium Development Goal 1 (MDG1) of halving the number of poor people by 2015," says the report prepared by the UN's Economic Commission for Africa.

Adding to the dilemma is the low labour absorption rate in Africa's growth sectors being concentrated in the traditionally capital-extensive extractive sector.

"Agriculture, which employs most people in most African countries, is characterised by low productivity growth, and thus has not provided enough real employment and income security to the population, especially in the rural areas."

The report also singles out inequality in the distribution of opportunities created by economic growth. "Poor people lack the capacity to meaningfully participate in the economy," it says, "either as producers of goods and services or as suppliers of labour. And the volatility of growth has added to the vulnerability of poor people. Only a few countries in Africa have sustained growth over the years. Yet that is precisely what is required to increase employment and reduce poverty."

Prerequisites for creating decent employment include the transformation of African economies from low productivity traditional agriculture to labour-intensive high-value agriculture and agro-processing--and to the growing industrial and service sectors, taking advantage of globalisation's opportunities.

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Political leadership is required in managing African economies to give priority to broad-based employment creation in national development programmes, including poverty reduction strategies.

The Declaration of Employment and Poverty Alleviation in Africa by the heads of state and governments of the African Union in 2004 acknowledged that widespread poverty, unemployment and underemployment compromise basic human rights and the dignity of individuals and communities--and constitute a...

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