Unequal access to jobs, finance, and public services is hindering poverty reduction in Sub-Saharan Africa, according to a World Bank report released on December 4, 2024. The report titled "Leveling the Playing Field: Addressing Structural Inequalities to Accelerate Poverty Reduction in Africa" highlights how structural inequalities based on factors such as birthplace, ethnicity, gender, and parental background create advantages for some while disadvantaging many others.
Africa is currently the world's second most unequal region after Latin America. It is also the only region where extreme poverty reduction has stalled in recent years. While global extreme poverty rates have decreased to single digits, Africa's rate stood at 38% in 2022. The region hosts 60% of the world's extremely poor population—a figure that could rise to 87% by 2030 without significant reforms.
The report recommends focusing on broadening opportunities as a strategy for poverty reduction. Ethiopia's expansion of land user rights since the early 2000s promoted agricultural investment. In Kenya, mobile money products increased financial inclusion and resilience against economic shocks. Ghana's investments in primary education improved completion rates, while market liberalization in its cocoa sector boosted agricultural incomes.
“There is nothing inevitable about structural inequalities. As successful country examples show, barriers to opportunities can be removed and replaced with well-designed policies that allow people to build their productive capacities and open access to jobs and markets,” said Nistha Sinha, co-author of the report.
High inequality has prevented economic growth from translating into poverty reduction across the region. Many individuals are born into circumstances limiting their future opportunities. For instance, children from the poorest households are least likely to complete school on time. Only 32% of poor households have electricity access compared to nearly 70% of non-poor households.
The report outlines four priority areas for addressing structural inequalities:
1. Strengthening economic and institutional foundations.
2. Investing in education, health, and infrastructure.
3. Enabling markets through improved access to capital and technology.
4. Fair use of government resources via progressive taxation and efficient spending.
“These policy priorities should not be seen in isolation but as overlapping and mutually reinforcing—creating a level playing field while at the same time enhancing the region’s productive capacity,” said Gabriela Inchauste, co-author of the report.
Addressing these structural inequalities could enable Sub-Saharan Africa to achieve inclusive growth and reduce poverty significantly.
For further information:
Caitlin Berczik: +1 (202) 458-9351
Daniella Van Leggelo Padilla: +1 (202) 751-8156