Global News Journal
Beyond the World news headlines
from Africa News blog:
African poverty falling faster than thought?
The old image of an Africa doomed to get ever poorer has certainly lost credence over the past decade even if it is a view still held by some.
Well, according to a new study, Africans are getting wealthier more quickly than previously believed and the poorest continent's riches are also spreading beyond the narrow confines of its elite.
"Africa is reducing poverty, and doing it much faster than we thought," the study by U.S.-based economists Xavier Sala-i-Martin and Maxim Pinkovskiy said.
"The growth from the period 1995-2006, far from benefiting only the elites, has been sufficiently widely spread that both total African inequality and African within-country inequality actually declined over this period."
The research, which assesses poverty levels and income distribution from 1970 to 2006, lends weight to a belief among local and foreign investors that Africa is finally getting its act together 50 years after shaking off the colonial shackles.
The study, published by the private, non-profit U.S.-based National Bureau of Economic Research, also challenges the suggestion that strong African growth over the last decade or more has done little to alleviate grassroots poverty due to the countervailing effect of equally strong population expansion.
Going by an inflation-adjusted $1 per person per day yardstick, the study, using statistical analysis pioneered by the two authors said 32 percent of Africans were in poverty in 2006, compared to 42 percent in 1995 and 40 percent in 1970.
I believe we sit on the Cusp of an Inflexion Point and that Africa is probably the last Convergence Trade going in the c21st. Its quite disjunctive and hence it is difficult to model. The Speed with which it is happening is quite breath taking. In Kenya, 10 years ago There were 15,000 Mobile Phones and Today There are more than 17.4m. The SMS Curve [and you can use it as a Proxy for the arrival of the Information century] is surely parabolic and Off the charts. It is the Phone that knitted this previously fragmented and non scaleable Continent into Scale. The Recent Pace of Urbanisation has also bulked up our Cities. The Demographic Skew [very low average] also lends itself to a fast pace of Change and Convergence.
There are many problems that swirl over Africa and there exists an inherent Bias which has crimped the Continent. Symbolically, this was pierced with the Election of President Obama, which was probably the mostintense Political Moment for this Continent, since Independence.
Africa is a very rich Continent. It has had a very Rentier Based Architecture. Today it sits on the Runway. The Old Architecture was about what was in the Ground. The New Architecture and Prosperity will come from those who walk on it. The Phone and the Internet are plucking People from the Village watching life go by right into the c21st. Its an Option Trade.
I remain supremely optimistic and believe recent Activity [Bharti Purchase of Zain 2nd biggest Purchase after Corus by India Inc.] is confirming a Deluge of Buy Side Interest. The Bourses from the Cape to Cairo, from Nairobi to Lagos have been on a Tear. Consider Nigeria’s run higher in the context of a President holed up in an ICU in the grounds of the Presidential Palace guarded by the First Lady Turai.
Africa will be built by the Entrepreneurs and the drag on per Capita which has been Population is its biggest advantage.
Its a very rare Moment.
Aly-Khan Satchu
http://www.rich.co.ke