Sub Saharan African Countries Have Experienced Macro Economic Growth

Income inequality has been a major concern around the world, and it mainly links to how economic metrics are distributed among individuals in a country. Economists generally categorise these metrics in wealth, income and consumption. Wilkinson and Picket (2009) showed in their studies that inequality has drawbacks that lead to social problems. This is because income inequality and wealth concentration can hinder or delay long term growth. In 2011, International Monetary Fund economists showed that less income inequality increased the duration of countries’ economic growth spells more than free trade, low government corruption, foreign investment or low foreign debt (Berg and Ostry, 2011).

Wide income disparities affect a countries economic growth. The poor aren’t able to help generate new growth and opportunity to spark markets to grow because

Inequality has increased within the most advanced and emerging markets and developing countries (EMDCs), a phenomenon that has garnered considerable attention with President Obama calling widening income inequality the “defining challenge of our time.” Irrespective of culture, religion and ideology, inequality concerns and affects everyone. Inequality can serve as an indication of the shortage of income mobility and opportunity―a reflection of the perpetual disadvantage for certain sectors of society. Increasing inequality also has serious implications for macroeconomic stability and economic growth, it can concentrate political and decision making power in the hands of a few. This in turn results in the inefficient allocation of human resources,

This estimated data is used to show how impactful the changes in inequality can be, in result it is estimated to have knock off more than 4 percent points to growth in half of the countries over the two decades. The key factor that this data allows us to focus on is that: the gap between lower income households and the rest of population’s income distribution, is seen not only in the lowest level of income inequality but in the bottom four groupings of poorest income. The results suggest that policy might not be effective solely by addressing poverty but by addressing lower incomes as a whole. Typically, redistribution (taxes and benefits) has been the most direct policy tool in addressing reducing income inequality but the widening suggests

Economic growth, put simply, is “an increase in the amount of goods and services produced per head of the population over a period of time”; development is inextricably linked with this economic growth. By utilising theories of economic growth and development we can see how the Chinese and Sub-Saharan African economies have emerged, but, more notably, we can use these to look at patterns from past and present to show their experience and the implications of this growth for the future.

Among 174 countries subjected to study, Berg and Ostry (2011) examined the relationship of income inequality and economic growth revealing that in the quality of growth, income inequality was a strong factor. Burst growth in economic declines swiftly to the countries with high inequality compared to the countries having low inequality which can able to maintain and prolong high rate of economic growth for a long period of time. In the same way, countries with high income inequality made their growth slower than with a country having low level of inequality (Bénabou 1996 as cited in United Nations New York 2013). These evidences reveal that high level of inequality results to the instability of growth thus retards the global development of

The purpose of this review is to investigate the claims made by economists on why poverty is a reoccurring factor in developing areas, and whether or not that particular claim is indeed one of the reasons that these areas suffer from poverty. Poverty traps are one of the prominent factors in the reasoning behind poverty in developing areas; however, there are also many other supporting factors that reinforce poverty. Shepherd (2007) believes there is a point of equilibrium in

The concept of ‘sustainable development’ is one that has faced heated debates for decades now. A seemingly harmless concept, it raises a lot of questions as to what it really entails and how exactly it can be achieved. But with more than 1.3 billion people living in abject poverty (less than $1.25 a day), and with a reported 22,000 children dying every day as a result of poverty (UNICEF), the debate for Sustainable Development becomes interesting as it questions the extremity of economic growth policies, in the war against poverty. Many note economic growth and development as the only tool for poverty alleviation. Roemer and Gugerty, for example, report that GDP growth of 10% per year is associated with income growth of 10% for the poorest 40% of the population. However, others question the extent to which economic growth should be put above other socio-economic factors. Lele points out that the focus on economic growth has led to important ecological and social sustainability, taking the backseat. He argues that due to strong emphasis on economic growth, not enough attention is paid to social equity, and economic stability within the development discourse.

First off, One cause for poverty is the Rich. The rich bring inequality to the poor. The wealth difference between upper-class and lower-class is at its widest point. “In most nations today, inequality the gap between the rich and the poor is quite high and often widening” (”Cause of”). Shows that while the rich are seeing their wealth grow, the middle and lower-classes are seeing financial decline. The distribution of wealth and income reveals inequalities among countries. “Inequality in the distribution of money income causes poverty” (Davis 23). The distribution of wealth compares all the assets held by the richest and poorest members of society. Tanzania is the largest of the East African countries and one of the poorest countries in the world. “During the twentieth century, the gap between the income of the richest and the poorest countries grew substantially, for example, in 2006, the average U.S. citizen was

Economic growth and inequality has been a long debated topic but is more important in the recent decades as income inequality has dramatically grown within many countries; the implications on these can hinder social and political development. Economic growth and its link to Equality can help create stability for an economy and improve living standards in the long run. More directly it allows people to be able to contribute and engage in the economy as it provides the opportunity for employment, investment and savings as well as consumption (Gehring & Kulkarni, 2006). These opportunities are channelled through the drivers of economic growth that increase factors of production (Human Capital, Technology and Institutions), as a result the relationship between growth and inequality are evident in the functioning of the labour market. Many of the theoretical and empirical studies that explore the relationship between inequality and growth have so far been disappointing and inconclusive. One of the reasons for this is the emergence of the different types of inequality that affect growth which is inequality of opportunity and effort, therefore the relationship can be positive or negative based on the type of inequality, so it’s important to explore the theory behind inequality of income, opportunity and intergenerational mobility as the answer to the question embedded in each (Bradbury & Triest, 2014).

Some of the world’s poorest countries, with some of the highest child labor and illiteracy rates lie in Sub Saharan Africa. People generally associate the region only with poor economic conditions and all of the social disorder that goes along with 3rd World Status. While some of this reputation is deserved, many people are also failing to see the vast potential for this part of the world. There are several factors that African governments should look into if they want to effectively and efficiently revamp this areas quality of life. One way to do so is by improving the more crucial aspects to healthy functioning region, for example, allowing children to possess their natural rights to a decent education. This could influence an increase

Poverty is a major menace to humanity existence in recent times majorly in the third world countries; it is one of the greatest threats to stability and peace more than other tussles like terrorism. The Sustainable Development Goal of the United Nations to eradicate poverty everywhere in all its form and ensure quality education by 2030 shows the global commitment to ensure a higher standard of living for mankind.

The questions are raised as what and how the wealth is distributed or allocated among societies. Countries with similar average incomes can differ substantially when it comes to people’s quality of life such as social justice, access to education and health care, job opportunities, availability of clean air and safe drinking water, the threat of crime, freedom of speech, life expectancy, birth-death control, identity, culture, conservation, equal opportunities, environmental change. Development is important as it covers a wide range process involving cultural, economic, environmental, political, social and technological change of a country. Regarding goals and means of development, recent United Nations documents emphasize on human development measured by life expectancy, adult literacy, access to all three levels of education as well as people‘s average income which is a necessary condition of their freedom of choice. In other words, human development incorporates all aspects of individuals’ well -being from their health status to their economic and political freedom. The Human Development Report 1996 of UNDP focuses on development as the end and economic growth a

This research also shows that economic growth, on average, raises incomes for both the rich and the poor. It helps to lift the poorest in society out of absolute poverty and does not automatically increase inequality. More importantly, no country has managed to lift itself out of poverty without integrating into the global economy.

In the short run, governments could use income distribution schemes to attenuate negative impacts on the poor of policies intended to jump start growth, but transfer schemes cannot be an answer in the long run and can be problematic also in the short run.5 In poor countries such schemes can impose significant burdens on already stretched budgets, and it is theoretically impossible to reduce poverty through redistribution in countries where average income falls below US$ 700 per year. According to a recent OECD study, even in developed countries, redistribution schemes cannot be the only response to rising poverty rates in certain segments of the population. 6