“Na growth we go chop”?

Africa rising, who benefits? : “Na growth we go chop”?

“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have little”. FRANKLIN D. ROOSEVELT

Africa is rising, but who actually benefits?

Indeed Africa is experiencing a tremendous economic growth and rated as one of the fastest growing continent in the world. This has however, left many with unanswered questions. A new economic growth momentum has been established though, but what does this mean to the very people on the continent? What actually are the strength and the pattern of growth on the continent? Is the growth trajectory inclusive enough or better still, addressing the issue of income inequality?

It is clear like an open book, that, the very economic growth experienced on the continent is not inclusive enough, and it is leading to rather, a higher rate of income inequality. The price of inequality, I would say, is overwhelming but, it is surmountable. I would dwell the analysis on lack of inclusive growth and income inequality as the main instruments which premise the doubts by people in questioning the very economic growth on the continent.

The major doubts that people have expressed about the current economic growth of Africa is that, it is not inclusive enough hence causing increasing income inequality on the continent. Many have described the growth as been jobless in nature and that; the numbers do not reflect the reality as being felt by the very people on the continent. A popular saying in the pidgin language goes “Na growth we go chop?” Indeed such individuals are within their rights to ask such question, after all what meaning can we attach to the numbers we have on papers if it does not have real economic meanings.

I did an article on the critical need for the continent at this point in time to pursue an inclusive growth agenda, as this is a means of avoiding the conundrum of concentrated benefits and dispersed / diffused costs system happening now; i.e. income inequality.

Accordingly, inclusive growth is an economic growth that results in a wider access to sustainable socio-economic opportunities for a broader number of people, countries or regions, while protecting the vulnerable, all being done in an environment of fairness, equal justice, and political plurality. Again, inclusive growth would make the poverty reduction efforts more effective by explicitly creating productive economic opportunities for the poor and vulnerable sections of the society. It will decrease the rising level in income inequality in countries and increase the involvement of people into the growth process.

The phenomenon of concentrated benefits and dispersed costs is a valid to warrant many governmental programs on the continent. However, I believe it does not go far enough to explain the kind of situation in which we now are. The current rising income inequality amidst tremendous growth rate, gives a reverse to the definition by Abraham Lincoln, who talked about a government of the people, by the people, for the people. What we now have is a government of the people, by the bureaucrats, including the legislators who have become bureaucrats, for the bureaucrats. Simply put, the economic success is fought for by the very people, but, the benefits are concentrated at the top, leaving majority of the people in poverty. So in essence, whiles the majority poor are working assiduously to increase the national income, the minority elites and rich are also working in almost a reverse; increasing their share of the national income. This indeed is something that the continent would want to put a stop to. To show that income inequality has become a global phenomenon which requires attention from all quarters, it is interesting to note that, the top 100 billionaires added $240 billion to their wealth in 2012- enough to end world poverty four times over.

From an independent opinion on the current rate of income inequality on the continent which is premised on lack of inclusive growth, I am left with no doubt that the continent urgently need to set goals to tackle the extreme inequality and extreme wealth. It is now widely accepted that rapidly growing extreme wealth and inequality are harmful to human progress, and that something needs to be done. Already this year, the World Economic Forum’s Global Risk Report rated inequality as one of the top global risks of 2013. The IMF has said that inequality is dangerous and divisive and could lead to civil unrest.

While many people are pointing to the fact that, a certain level of inequality may benefit growth by rewarding risk takers and innovation, the levels of inequality now being seen are in fact, economically damaging and inefficient. They limit the overall amount of growth, and at the same time mean that growth fails to benefit the majority. If national income is instead more evenly spread across the population then it would give more people more spending power, which in turn would drive growth and drive down inequality. More so, unequal societies represent a threat to meaningful democracy. Extreme wealth and inequality undermines societies. It leads to far less social mobility. If you are born poor in a very unequal society you are much more likely to end your life in poverty.

The growth on the continent should therefore be looked at from two angles; who gets involved in the production and how the growth is distributed. These two scenarios have a critical bearing on poverty reduction on the continent and strategically reverse the increasing rise in income inequality. Remember, the main objective of achieving inclusive growth is to bridge the gap between the rich and the poor and thus reducing poverty and inequality on the continent

Whatever the combination of policies pursued, the first step is for Africa to recognize this as the goal. There are many steps that can be taken to make growth on the continent inclusive enough and to reverse inequality. The benefits are huge, for the poorest – but also for the richest. We cannot afford to have a continent of extreme wealth and extreme inequality. We cannot afford to have a continent where inequality continues to grow in the majority of countries, amidst increasing economic success. After the entire question, “Na growth we go chop”?