Growth, Inequality and Poverty Reduction in Africa in the Last Two Decades

What is it about?

This paper documents the important welfare changes that have slowed down poverty reduction in Sub Saharan Africa in the last two decades. By applying a new decomposition technique based on a non-parametric method—the ‘relative distribution’—we found a clear distributional pattern affecting almost all analysed countries. Nineteen out twenty four countries experienced a significant increase in polarisation, particularly in the lower tail of the distribution, and this distributional change lowered the pro-poor impact of growth substantially.

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Why is it important?

Without this unfavourable redistribution, poverty could have decreased in these countries by an additional five percentage points.