21/08/2017 10:40 AM AEST | Updated 21/08/2017 10:40 AM AEST

Nearly Half The Continent Is Living In Poverty. No Wonder They Want Out Of Africa.

Thousands of Africans are fleeing from rising inequality, a stymied economy and ineradicable poverty.

MAHMUD TURKIA via Getty Images
JULY 8, 2017: Illegal migrants from Africa, attempting to reach Europe, walk towards a detention center off the coastal town of Guarabouli.

According to the International Organisation for Migration (IOM), at least 2,357 people have died or are missing after trying to cross into Europe in the first half of this year. Last year, 5,096 deaths were recorded.

The majority of them -- variously described as economic migrants, victims of 'people smugglers', etc. --are young Africans aged between 17 and 25. The former head of the British mission in Benghazi (Libya) warned in April that as many as a million migrants were already on the way to Libya and then Europe from across Africa.

Why are so many young Africans trying to leave the continent of their birth? Why are they risking their lives to flee Africa?

A large part of the answer lies in the failure of liberalisation and privatisation policies, typically introduced as part of the IMF's structural adjustment programmes (SAPs) that much of Africa was subjected to from the 1980s. The World Bank, the African Development Bank and every donor supported SAPs, despite the United Nations' warning about adverse social consequences and advocating a much cautious approach.

SAP advocates promised that soon private investment and export growths would follow, bringing growth and prosperity. Now, a few within the IMF and the World Bank admit that the neoliberalism was oversold, condemning the 1980s and 1990s to become 'lost decades'.

Africa has been experiencing rapid urbanisation and slum growth. According to UN Habitat, 61.7 percent of Africa's urban population lives in slums, and in extreme vulnerabilities

While SAPs were officially abandoned in the late 1990s, the replacements, such as Poverty Reduction Strategy Papers (PRSPs) or 'New Partnership for Africa's Development' (Nepad) are 'old wine in a new bottle'. Although advertised as a 'home-grown' mandate, they are notable for promoting the same liberalisation and privatisation policies.

Meanwhile, within five years the G8 countries reneged on their 2005 Gleneagles pledge to provide an extra $25 billion a year for Africa as part of a $50 billion increase in financial assistance to "Make Poverty History". No wonder Africa has become the only continent to see a massive increase in poverty at the end of the 20th century and during the years of the Millennium Development Goals. Nearly half the continent's population now live in poverty.

According to the World Bank's 'Poverty in Rising Africa', the number of people living in extreme poverty increased by more than 100 million between 1990 and 2012 to about 330 million. The report projects that "the world's extreme poor will be increasingly concentrated in Africa".

The continent has also been experiencing rising economic inequality, with higher inequality levels than in the rest of the developing world, even overtaking Latin America. National Gini coefficients -- the most common measure of inequality -- average around 0.45 for the continent, above 0.60 in some countries, and still rising.

While the continent is experiencing a 'youth bulge' with more young people (aged 15-24) in its population, it has failed to generate sufficient decent jobs. South Africa, the most developed economy in Sub-Saharan Africa (SSA), has a youth unemployment rate of about 54 percent.

The real picture could be much darker. Discouraged youths, unable to find a decent job, drop out of the labour force; they are simply not counted. Uncertain survival and livelihood prospects have pushed many youths to self-harm, including suicide and to anti-social activities, often ending in incarceration.

Most poor people simply cannot afford to remain unemployed when there is no decent social protection system, they have to accept whatever is available to survive. Hence, vulnerable employment and the rate of working poor are extremely high in the continent, warranting a careful interpretation of official unemployment rates. For example, in Ghana, the official unemployment rate is 5.2 percent, while the underemployment rate is 47 percent.

Such sobering statistics are despite annual growth rates in many African countries often exceeding 5 percent in the new century. SAP and PRSP advocates were quick to claim credit, arguing that their policy prescriptions were finally bearing fruit. They have gone silent after the commodity price collapse since 2014.

With trade liberalisation and greater specialisation, many African countries are now even more dependent on fewer export commodities. The top five exports of SSA economies, all non-renewable natural resources, accounted for 60 percent of all exports in 2013. The linkages of extractive activities with the rest of national economies are now lower than ever. Thus, despite impressive economic growth rates, African economies have become more vulnerable to external shocks.


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Meanwhile, Africa's share of global manufacturing has fallen from about 3 percent in 1970 to less than 2 percent in 2013. Manufacturing's share of total African GDP has decreased from 16 percent in 1974 to around 13 percent in 2013. Thus, over the past four decades, Africa has deindustrialised.

Africa possesses about half the uncultivated arable land surface in the world with huge growth potential. Sixty percent of SSA's population work in jobs related to agriculture. However, agricultural productivity has mostly remained stagnant since 1980 as under SAPs, the sector was ignored.

The African governments were advised that importing food grains would be cheaper and the continent turned into a net food importer, according to a FAO report.

With agriculture stagnant, people moved from rural to urban areas, only to find things little better. Thus, Africa has been experiencing rapid urbanisation and slum growth. According to UN Habitat, 61.7 percent of Africa's urban population lives in slums, and in extreme vulnerabilities like the most recent disaster in Sierra Leone which killed more than 400 people (atleast 600 missing).

Meanwhile, powerful outside interests, including the IMF, the World Bank and donors, have been advocating large farm production, claiming that is the only way to boost productivity. Accordingly, several governments have already contracted out land to international agribusinesses, often displacing settled communities.

One cannot help but wonder whether G20's new 'compact with Africa', showcased at Hamburg, can combat poverty and climate change effects, and hence deter mass exodus, without fundamental policy changes.