Extreme Poverty Falling, But Still A Challenge

The year 2015 saw the world’s focus transition from the Millennium Development Goals to the Sustainable Development Goals. According to a new World Bank report, the year is also predicted to see a significant drop in extreme poverty (defined as living with less than $1.90 per day according to the updated international poverty line), from 902 million people worldwide in 2012 to 702 million people in 2015, or 9.6 percent of the global population. This marks the first time that the percentage of global extreme poverty will fall to single-digit levels.

Africa south of the Sahara has also seen a modest decline in the share of its population living below the poverty line – from 58.1 percent in 1999 to 12.8 percent in 2012; by the end of 2015, the Bank estimates this number to further drop to 35.2 percent. This reduction in overall poverty, and the accompanying improvements in health and education, can be attributed to the region’s strong economic growth over the past two decades.

Despite this progress, however, extreme poverty has become increasingly unequal, concentrated mainly in SSA and South Asia. SSA’s share in total global poverty has actually risen since 1990 due to population increases, reaching 43 percent in 2012; an estimated 63 million more people now live in extreme poverty in Africa than in 1990. The rate of poverty reduction in the region has also lagged behind global rates, falling only from 56 to 42.6 during the same time period; global poverty rates, on the other hand, fell from 37.1 to 12.8.

In addition to a lack of income, populations in extreme poverty may also face a lack of access to education, health care, jobs, housing, and personal safety; ending extreme poverty means ending these deprivations as well. The Bank report uses the Multidimensional Poverty Index (MPI), put forth by the Oxford Poverty and Human Development Initiative and the United Nations Development Programme, to examine how the world’s regions stack up in terms of the non-income dimensions of poverty. The MPI is composed of 10 indicators grouped in three dimensions: education (including school attendance and years of education); health (including child mortality and nutrition); and other living standards (including access to electricity, sanitation, access to safe water, flooring and housing materials, cooking fuel, and household assets).

The 2015 MPI counts 1.6 billion people as poor by these non-income factors; SSA rates highest in terms of the range of deprivation. This could be partly due to the fact that multi-dimensional poverty tends to occur more often in fragile states or countries facing conflict (for more information on how conflict, poverty, and hunger collide, read the new post on FSP-SSA).

The country with the highest rate of multi-dimensional poverty in the world is Niger. However, when the data is broken down even further to sub-national levels, wide differences are seen among SSA countries and populations. The poorest of the world’s sub-national regions is found not in Niger, but in Salamat in southeast Chad. Nearly 98 percent of this region’s 354,000 inhabitants are poor according to the MPI, deprived on average of 75 percent of the MPI dimensions.

The World Bank’s aim of ending extreme poverty by 2030 clearly faces a challenge in Africa south of the Sahara. Even if the world continued to see the rapid economic growth that has characterized the 2000s, poverty in the region would still be at an estimated 14.4 percent in 2030. Africa’s structural characteristics are partly to blame for this. Much of the region’s population depends on capital-intensive, natural resource-based economies (such as agriculture or fishing), and many countries still face frequent outbreaks of conflict and political instability. These challenges tend to limit income-generating activities for poor, rural populations, making it hard for poverty in these areas to respond positively to overall economic growth.

The report also finds evidence that recent economic growth trends may not be sustainable from an environmental perspective. Natural capital depletion (i.e., the depletion of minerals and degradation of natural resources) reached six percent of total gross national income per capita in low-income countries since 1990. In Africa south of the Sahara, 84 percent of countries are depleting their capital, making their economies unsustainable in the long term.

In addition to eradicating extreme poverty, policymakers also need to focus on reducing income inequality so that future prosperity is shared more equitably. These two goals will need to work in tandem to foster economic growth and lift the incomes of the poorest populations. The report calls for continued efforts to improve access to education and social protection mechanisms, as well as for improved identification methods to accurately assess all of the dimensions of poverty in a region- and country-specific way. Such improved methods will be particularly important in SSA, where data is sparse (a total of 21 countries in the region do not have at least two surveys with which to track poverty) and where poverty’s impacts and effects vary widely. To address this need for more and better data, the Bank has launched a new “end-poverty” tool to ensure that the world’s 78 poorest nations have household-level surveys conducted every three years, with the first round to be completed by 2020.

Access the full database behind the World Bank report here. Read UN coverage of the World Bank report here. For further media coverage of the extreme hunger situation in SSA, read articles from Bloomberg News and Uganda’s New Vision.

By: Sara Gustafson, IFPRI

Photo credit:Ollivier Girard for Center for International Forestry Research (CIFOR)