- Tackling poverty in Africa remains one of the primary goals of policymakers and institutions globally, including the World Bank.
- As the world’s economic powers focus on Africa for a share of its vast resources, the stars could be aligning for Africa to deal a body blow to the ghosts of poverty.
- One of the key cogs of this endeavor, however, is tapping on human capital and technology to drive change at scale, as advised by the UN.
One of the most vexing questions for policymakers internationally is how to make sustainable progress in tackling poverty in Africa. In this endeavor, which often draws in actors from across the globe, one thing remains clear: combating poverty in Africa requires empowering the continent and its people to make the most of its abundant resources.
With vast mineral resources and an increasingly educated and informed leadership and workforce, one wonders: Why is Africa poor? Quite often, a quick analysis leads to a simple conclusion: Africa is poor because its people cannot utilize its resources.
“Africa is a continent with remarkable economic potential yet the least developed in part due to its inadequate human capital to transform this potential into social and economic development,” explains UN Deputy Secretary Amina Mohamed.
With renewed focus on Africa, however, the stars could be aligning for economies across the continent to change the tide and deal a body blow to the challenge of poverty. Increasingly, world powers, grappling with a renewed thirst for minerals, are looking into Africa for fresh supplies, opening a window of opportunity for leaders across the continent to align their development goals in a manner that can significantly tackle poverty in Africa.
For instance, between October 13 and 15, US President Joe Biden will be touring Angola. A White House update states that the US President will make his first tour in Africa.
Biden is embarking on a tour that has been hailed critically as “celebrating a signature project of the G7’s Partnership for Global Infrastructure and Investment, which advances our joint vision for Africa’s first trans-continental open access rail network that starts in Lobito and ultimately will connect the Atlantic Ocean to the Indian Ocean.”
“The President’s visit to Luanda celebrates the evolution of the US-Angola relationship, underscores the US’ continued commitment to African partners, and demonstrates how collaborating to solve shared challenges delivers for the people of the US and across the African continent.”
President Biden’s tour to Africa, just weeks before the November General Election in the US, comes soon after China hosted leaders from across the continent in Beijing in yet another show of might and interest in the mineral-rich zone.
In different forums, other strong economies, including Malaysia, South Korea, Japan, Italy, and Russia, have made strong overtures to Africa as a renewed appetite for resources in Africa pushes global powers to reconsider the continent’s role in driving the world economy.
Amid this push, however, poverty in Africa sticks out like a sore thump. Recent surveys and projections paint a grim picture, with the continent projected to be the home of the world’s youth in just under a decade. Without addressing the key question of empowering human capital and skilling, the threat of increased levels of poverty in Africa remains a frightening reality.
Poverty in Africa: The sorry state of the continent’s human capital
In a 2023 UN presentation titled ‘Human capital and building forward better after the COVID-19’ the head of the UN, Amina Mohamed (and panelists), admitted that Africa’s plight has several causes, but the one that was placed center stage was “the condition of Africa’s human capital.”
According to the World Bank’s Human Capital Index, African countries rank at the bottom of the food chain. Africa’s Human Capital Index score ranks at 0.4, a deplorable ranking compared to the global average of 0.57.
“Sub-Saharan Africa currently only captures 55 per cent of its human capital potential, compared to a global average of 65 per cent,” reads the UN report.
Worse still, the report paints a grim doomsday scenario, laying out the hard-to-swallow facts point blank; “before the pandemic hit, the UN Sustainable Development Goal (SDGs) to eliminate extreme poverty by 2030 was already out of reach.”
Africa poverty reduction: Exploding population, human capital or cheap labor?
The UN Deputy Secretary points out that Africa’s labor market is distinctively marked by rising skills mismatch. For instance, it presents a cocktail of low productivity in the informal sector, unemployment, and underemployment against a rising youth population expected to reach more than one billion by 2050.
The UN diplomat describes Africa’s condition concerning the youth mushrooming population as “a generation at risk.” However, a generation at risk could be an understatement because; “Africa records the world’s lowest school enrollment and quality, leaving over 90 million teenagers struggling for employment in low-paid, informal sector jobs. These, coupled with the mixed effects of limited access to health, nutrition, technology and innovation are strong warning signals to sustaining Africa’s growth,” the UN report points out.
Granted, the paper paints an alarming picture of poverty in Africa. This challenge is unlikely to be tackled by 2030 as per the SDGs. “Achieving the poverty eradication goal was unlikely even before the pandemic,” but the UN remains surprisingly optimistic, noting that Africa still has a chance.
First, the UN suggests that; “Investments in human capital will help lower the risk of long-lasting damage from the pandemic, which may become apparent over the longer term, and can enhance competitiveness and productivity.”
This could perhaps inform policymakers in crafting investment deals and resource exploration agreements. A good starting point would be for participating multinationals to commit to skills transfer programs even as the revenue-sharing formula adheres to community investments in health, education, and infrastructure to help tackle extreme poverty in Africa.
Secondly, “increasing allocation and efficiency of spending on human capital is needed to achieve results. Domestic resource mobilization, private sector engagement, and better use of development assistance must be coupled with efforts to improve the efficiency and effectiveness of spending through policy reforms and a focus on value for money.”
This is where things get tangled up, and good intention gets mixed up with corrupt elements; “resource mobilization, private sector engagement, development assistance, policy reforms.” In Africa, these benign truisms have subliminal ways of turning gifts into curses.
“The pandemic is an opportunity to shift from a charity-based approach to one that puts human capital at the heart of post-pandemic recovery and sustainable economic growth,” the UN explains.
This proactive approach to solving Africa’s development problems requires that government and private entities operate with utmost good faith and, for all purposes, be patriotic. If there is a lack of commitment and legal frameworks to ensure monitoring and evaluation of funding, then the envisioned goals will not be achieved.
Along with the above options, the UN also proposes debt relief for African countries to end African poverty. “Reducing countries’ debt burdens will release resources for public investment, including investments in human capital, in areas such as education, health, and infrastructure,” the UN suggests.
However, in the same vein, the UN cautions policymakers that even when in effect, debt relief is not sufficient to end poverty, especially in key areas such as the health sector.
“…while helpful, aid will not be enough to fill human capital investment gaps in health…African countries previous commitments to strengthening their health sector in the 2001 Abuja Declaration by allocate no less than 15 percent of their annual budget to the health sector should be reinforced.”
According to the World Bank, specific policy reforms aimed at protecting human capital that was not as present, including reforms in access to education, reforms to expand social insurance coverage to informal sector workers, and reforms focused on human resource management, should now be strengthened.
For example, when you look at the education sector, the World Bank estimates that “70 percent of Africa Youth are offline even though technology is one the key drivers for human capital development.”
“There is a need to increase national budgeting for education and accelerate the development of e-learning system in delivering quality education, especially for offline youth in fulfilling the commitment of the AU African Strategy for Digital transformation (2020- 2030),” the World Bank advises.
Policy reforms critical in addressing digital infrastructure gaps
The bank maintains that each country must review its policy reforms and address its digital infrastructure gaps. In this regard, the World Bank cites the affordability of devices and services and digital literacy as the basis for expanding access to digital technologies and for African countries to close the existing gender digital divide and, by so doing, boost overall human capital.
“Success in this area will place African countries in a good position to successfully move forward… investments in tertiary education and, particularly, in science, technology, engineering, and mathematics (STEM) skills are critical for designing technologies that create the conditions for jobs,” the report notes.
