It's Per Capita Growth that Matters for Well-Being

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Wednesday, 06 November 2013 05:33

The NYT had a piece telling readers that growth in Africa has not been able to reduce the number of people in poverty. By not taking population growth into account, it wrongly implied that the continent is seeing rapid growth. It told readers:

"The continent is indeed posting gains — in 2013, sub-Saharan Africa’s growth rate is projected at 4.9 percent, a figure that would be the envy of any Western government."

Actually, the 4.9 percent figure is not especially strong. Africa's population growth is over 3.0 percent annually. This puts it per capita growth at less than 2.0 percent annually. That is actually weak for developing countries and in fact not something that Western governments would particularly envy. For example, if Japan's economy grew at a rate of 1.7 percent a year, with a population that is declining at a 0.2 percent annual rate, it's per capita GDP growth would be the same as sub-Saharan Africa.

Growth by itself will not reduce poverty if it is concentrated among the wealthy, but in fact, sub-Saharan Africa has not been seeing especially robust growth. Its problem is not just a question of distribution.