Chinese Growth and Poverty Reduction: Lessons for Sub-Saharan Africa

What you need to know:

In learning from China, SSA needs greater efforts and policies to transform agriculture and rural economy, strategic manufacturing sector, and to support productivity growth and gradual upgrading of the informal sector.

China have transformed its economy and reduced poverty dramatically over the last forty years. Sub-Saharan Africa (SSA) have not done very well on this front. While efforts are made to reduce poverty, and growth averaged 4.8% between 2000 and 2010, only modest results in poverty reduction was achieved. Generally speaking, the average growth in SSA was relatively very low compared with China’s growth average of 9.56% between 2000 and 2015, with a consecutive four-year period of double-digit growth that climaxed at 14% in 2007.The World Bank data showed half of 736 million extremely poor people living on less than $1.90 a day lived in SSA. In his 2008 paper, Martin Ravallion, a renowned economist, showed that two thirds of Chinese people lived below $1 a day in 1981, and the World Bank data shows that in 1990, 54% of the population in SSA lived below $1.90 a day. While this proportion had fallen to 4% in East Asia in 2013, it declined to only 41% in SSA. The World Bank projects that, while the number of extremely poor people in other parts of the world is declining, it will rise in SSA and constitute 9 in 10 of the extremely poor by 2030. Negative growth rates, rapid population growth, political instability, and gender inequality are among factors hindering rapid change. The experience of China suggests that accelerated growth accompanied by effective socio-economic transformation is key to resolving the “poverty trap” in SSA. The UN Sustainable Development Goals (SDGs) and the AU Agenda 2063 clearly recognize this.

Chinese Growth and Poverty Reduction: Lessons for Sub-Saharan Africa

What you need to know:

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