HLEG thematic workshop on Measurement of Well Being and Development in Africa, 12-14 November 2015, Durban, South Africa, More information at: www.oecd.org/statistics/measuring-economic-social-progress

1. POVERTY IN A RISING AFRICA
– A MONETARY PERSPECTIVE
Luc Christiaensen, Presentation at Measurement of
Well Being and Development in Africa Conference,
Durban, South Africa, 12-14 November, 2015
1
http://www.worldbank.org/africa/povertyreport

2. 2
Motivation – Africa Rising !

3. 3
Motivation – Are People Better Off?

4. • Doubts about progress in extreme poverty
In part driven by the quality and availability
of data
• A Response: Poverty in a Rising Africa
• Scrutinizes the data for measuring
consumption (and poverty, inequality)
• Revisits evolution of poverty and inequality
in light of this review
• Considers non-monetary dimensions (going
beyond education and health)
Motivation – Poverty in a Rising Africa
4
http://www.worldbank.org/africa/povertyreport

5. The Monetary Perspective – Take-Aways
• Africa’s Poverty Statistics
• Measuring poverty in Africa remains a challenge given limited availability of
comparable and quality consumption surveys
• Poverty Trends and Profiles
• Poverty rate possibly lower than current estimates suggest, but more people
poor today than in 1990
• Poverty reduction slowest in fragile countries; rural areas remain much
poorer; and 60 percent of the poor are chronically poor.
• Inequality
• No systematic increase in inequality; but the data do not capture extremely
wealthy Africans, whose numbers and wealth are increasing
• Spatial inequalities (bw urban & rural areas and across regions) can be large 5

6. The Data Landscape
6

7. Data: substantial progress in non-consumption surveys;
availability of consumption surveys remains a challenge
7
70
140 138
42
33
37
43 46
28
103
92
0
20
40
60
80
100
120
140
160
1990-1994 1995-1999 2000-2004 2005-2009 2010-2014
Sharp increase in (non-consumption) surveys
# surveys
# non-consumption svys
(DHS/MICS/LFS/ad-hoc svys
# consumption surveys (incl. LSMS-ISA)
18
16 16 15
13 12
9
7
5 4 3 3 4 4
16
16 15
14
15
20
21
23
22 25
23
21
17
19
2
2
2
4 5
3
4 5
4
3
4
4
7
6
3
5 6 7 8
6
10 9
13 10
12
14
16 15
8 8 8 7 6 6
3 3 3
5 5 5
4 4
0
5
10
15
20
25
30
35
40
45
50
Numberofcountries
No survey One survey
Two surveys (interval of 6 years or more) Two surveys (interval of 5 years or less)
Three or more surveys
47 47 47 47 474747 47474747 484847
2003-2012: only 25 African countries with ≥ 2
consumption svys to track poverty over past decade

8. Data (2): lack of comparability (&quality) compounds
the challenge of limited availability in tracking poverty
8
6
3.83.5
1.6
World SSA
Consumption surveys per country (1990-2012)
Average Comparable
 countries that appear data rich, often are not
(e.g. Guinea and Mali both had 4 surveys 1994-2012,
but no pairs were comparable)
Lack of comparability particularly severe in Africa Comparability matters!
Nigeria (2010)
Malawi: comparing Ginis
65.8
39.9
46.1
0
10
20
30
40
50
60
70
1997 2004 2010
Not comparable

9. Poverty : Trends and Profile
9

10. Poverty trends (1): Headcount rate may be lower than
current estimates suggest ….
10
56
43
37
0
10
20
30
40
50
60
70
80
90
100
1990 2012 (Povcalnet) 2012 (Most optimistic)
Povertyheadcountrate(%)

11. Poverty trends (2): … but given population growth, number
of poor still much higher, even under optimistic scenario.
11
56
43
37
284
389
337
-
50
100
150
200
250
300
350
400
0
10
20
30
40
50
60
70
80
90
100
1990 2012 (Povcalnet) 2012 (Most optimistic)
No.ofpoorpeople(Millions)
Povertyheadcountrate(%)

12. Poverty profile: Poverty reduction slowest in fragile states
15.1% ***
-12.6% ***
-7.1%
-1.1%
-20.0% -10.0% 0.0% 10.0% 20.0%
FRAGILE
RESOURCE RICH
LANDLOCKED
MIDDLE INCOME
Change in poverty headcount (%points) (1996-2012)

13. Poverty profile: Poverty remains predominantly rural, but
rural-urban gap is declining
293
272
60 60
0
50
100
150
200
250
300
350
1996 2012
0
10
20
30
40
50
60
70
80
90
100
Numberofpoorpeople
Povertyheadcountrate
Urban poor
Rural poor
69
46
34
18
1996 2012
0
10
20
30
40
50
60
70
80
90
100
Povertyheadcountrate
Urban headcount rate
Rural headcount rate

14. Inequality : A Complex Picture
14

15. 15
• Seven of 10 most unequal countries
in SSA (but 5 with ≤5 million people)
• Inequality in Africa shows a
geographical pattern
• Omitting southern African countries
& controlling for GDP, African
countries not more unequal
• Controlling for sub-region,
inequality is not correlated with
fragility, landlocked status, resource
rich status, or income level.
Inequality in Africa

16. Inequality is not systematically going up (or down)
16
-0.04
-0.03
-0.02
-0.01
0
0.01
0.02
0.03 BurkinaFaso
SierraLeone
Tanzania
Uganda
Botswana
Namibia
Congo,Dem.Rep.
Mozambique
SouthAfrica
Swaziland
Rwanda
Mauritius
Cameroon
Zambia
Senegal
Coted'Ivoire
Madagascar
Ghana
Nigeria
Chad
Togo
Ethiopia
Malawi

17. Beyond the Gini: Billionaire Wealth is Growing
0
1
2
3
4
2006 2007 2008 2009 2010 2011 2012 2013
Angola Kenya Nigeria Tanzania
Uganda South Africa Total
Source: Aggregate net wealth: “The World's Billionaires” Forbes Media GDP: World Development Indicators.
17
Forbes (2013/14): Africa
• 19 billionaires
• ~50 individuals with net
worth ≥400 million

18. Decomposing inequality: between and within groups
18
0
.1.2.3.4
%ofinequalityexplained
low inequality high inequality
Urban
0
.1.2.3.4
%inequalityexplained
low inequality high inequality
Region
0
.1.2.3.4
%inequalityexplained
low inequality high inequality
Education
0
.1.2.3.4
%ofinequalityexplained
low inequality high inequality
Employment
0
.1.2.3.4
%ofinequalityexplained
low inequality high inequality
Gender
0
.1.2.3.4
%ofinequalityexplained
low inequality high inequality
Demographics
0
.1.2.3.4
%ofinequalityexplained
low inequality high inequality
Age group
• In Senegal, 1/3 of total inequality
can be attributed to gaps bw
urban and rural households
• In Nigeria, the richest state has 4
times mean consumption of the
poorest state.
• Educational attainment of the
household head explains up to 40
percent in Rwanda, South Africa,
and Zambia

19. Concluding Remarks
19

20. Concluding remarks
Big trends
• Poverty possibly lower than current estimates suggest, but more people poor today than in 1990
• Poverty reduction slowest in fragile countries; rural areas remain much poorer; and 60 percent of
the poor are chronically poor.
• No systematic increase in inequality; data do not capture rising number of wealthy Africans
Poverty Measurement
• Limited availability and comparability of consumption surveys is a challenge
• Many technical issues remain  better international standards
• Caution against overinterpretation of poverty point estimates
Better Data make for Better Decisions and Better Lives
• Data Initiative – assist IDA countries in having at least one consumption survey every three years
20

21. Thank you!
21

22. http://www.worldbank.org/africa/povertyreport 22

23. Additional slides
23

24. Data (3): … plenty of issues with auxiliary data as well
24
• CPIs often based on outdated weights
and 1/3 of people in countries that only
collect urban prices.
• GDP: only 22 out of 48 countries use
base years more recent than 2004.
• Note: data issues not totally unique to
consumption (CPI, or GDP) data
(politically economy of data)
2010 or later
2%
2005-09
51%
2000-04
23%
1995-99
11%
before 1995
2%
missing
11%
Reference period of CPI weights
(% of population, as of July 2012)

25. Poverty trends (1): Headcount rate may be lower than
current estimates suggest …
25
55
37
0
10
20
30
40
50
60
70
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Poverty headcount rate ($1.90-day) (%)
Comparable and good quality surveys
56
43
0
10
20
30
40
50
60
70
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Poverty headcount rate ($1.90-day) (%)
- PovcalNet
57
43
0
10
20
30
40
50
60
70
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Poverty headcount rate ($1.90-day) (%) -
Comparable surveys only
55
40
0
10
20
30
40
50
60
70
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Poverty headcount rate ($1.90-day) (%)
Comparable & good quality surveys (w/o Nigeria)

26. 26
• Seven of 10 most unequal countries
in SSA (but 5 with ≤5 million people)
• Inequality in Africa shows a
geographical pattern
• Omitting southern African countries
& controlling for GDP, African
countries not more unequal
• Controlling for sub-region,
inequality is not correlated with
fragility, landlocked status, resource
rich status, or income level.
Inequality in Africa