Poverty in Africa is the lack of provision to satisfy the basic human needs of certain people in Africa. African nations typically fall toward the bottom of any list measuring small size economic activity, such as income per capita or GDP per capita, despite a wealth of natural resources. Although there are more African nations in medium, high and very high human development than low (31 countries), 23 of 25 nations identified as having "Low Human Development" on the United Nations' (UN) Human Development Index were in Africa.International Human Development Indicators . undp.org As of 2019, 424 million people in sub-Saharan Africa were reportedly living in severe poverty. In 2022, 460 million people—an increase of 36 million in only three years—were anticipated to be living in extreme poverty as a result of the COVID-19 pandemic and the Russo-Ukrainian war.
In 2006, 34 of the 50 nations on the UN list of least developed countries were in Africa.LDCs List . un.org. Retrieved on 31 October 2011. In many nations, GDP per capita is less than US$5200 per year, with the vast majority of the population living on much less (according to World Bank data, by 2016 the island nation of Seychelles was the only African country with a GDP per capita above US$10,000 per yearGDP per capita (current US$) , World Bank website, retrieved 9 January 2018). In addition, Africa's share of income has been consistently dropping over the past century by any measure. In 1820, the average European worker earned about three times what the average African did. Now, the average European earns twenty times what the average African does.*A New Partnership for Growth in Africa Although GDP per capita incomes in Africa have also been steadily growing, measures are still far better in other parts of the world.
Mismanagement of land Despite large amounts of arable land south of the Sahara Desert, small, individual land holdings are rare. In many nations, the land is subject to tribal ownership. Many nations lack a system of freehold landowning. In others, the laws prevent people from disadvantaged groups from owning land at all. Although often these laws are ignored, and land sales to disadvantaged groups occur, legal title to the land is not assured. As such, rural Africans rarely have clear title to their own land and have to survive as farm laborers. Unused land is plentiful but is often private property. Most African nations have very poor land registration systems, making squatting and land-theft common occurrences. This makes it difficult to get a mortgage or similar loan, as ownership of the property often cannot be established to the satisfaction of financiers.In-depth: Land reform in Southern Africa. SOUTHERN AFRICA: Overview. 1 July 2003 (IRIN)
This system often gives an advantage to one native African group over another and is not just Europeans over Africans. For example, it was hoped that land reform in Zimbabwe would transfer land from European landowners to family farmers. Instead, it simply substituted native Africans with ties to the government for Europeans, leaving much of the population disadvantaged. Because of this abuse, foreign aid that was destined for land purchases was withdrawn. (See Land reform in Zimbabwe)
Historically, such programs have been few and far between, with much foreign aid being concentrated on the raising of cash crops and large plantations rather than family farms.3. Food self-sufficiency: Crisis of the collective ideology
There is no consensus on what the optimal strategy for land use in Africa may be. Studies by the National Academy of Sciences have suggested great promise in relying on native crops as a means of improving Africa's food security. A report by Future Harvest suggests that traditionally used forage plants show the same promise.With Time Running Out, Scientists Attempt Rescue of African Vegetable Crops. Future Harvest. 29 November 2001, Supporting a different viewpoint is an article appearing in AgBioForum which suggests that smallholder farmers benefited substantially by planting a genetically modified variety of maize.AgBioForum 9(1): Three Seasons of Subsistence Insect-Resistant Maize in South Africa: Have Smallholders Benefited? . Agbioforum.org (31 May 2006). Retrieved on 2011-10-31. In a similar vein is an article discussing the use of nontraditional crops for export published as part of the proceedings of a Purdue University symposium.Nontraditional Crop Production in Africa for Export . Hort.purdue.edu. Retrieved on 31 October 2011.
Misused money Between 1960 and 1997, foreign nations sent over US$500 billion to African nations in the form of direct aid.Aid to Africa at Risk: Covering Up Corruption. (PDF) . Retrieved on 31 October 2011.Africa's reform efforts. Odious Debts. Retrieved on 31 October 2011. The consensus is that the money has had little long-term effect. The Cato Institute argues this is because, rather than increasing development, financial aid creates dependence on foreign investments. For example, as of 2005, the budgets of Ghana and Uganda were more than 50 percent aid-dependent. In 2002, then-president of Senegal, economist Abdoulaye Wade, stated, "'I've never seen a country develop itself through aid or credit. Countries that have developed - in Europe, America, Japan, Asian countries like Taiwan, Korea and Singapore - have all believed in free markets. There is no mystery there. Africa took the wrong road after independence.''
In addition, most African nations have owed substantial sums of money. However, a large percentage of the money was either invested in weapons (money that was spent back in developed nations, and provided little or no benefit to the native population) or was directly misappropriated by corrupt governments. As such, many newly democratic nations in Africa are saddled with debt run up by totalitarian regimes. Large debts usually result in little being spent on social services, such as education, pensions, or medical care. In addition, most of the debt currently owed (approximately US$321 billion in 1996Samuel M. Wangwe FOREIGN AID, DEBT AND DEVELOPMENT IN SUB-SAHARAN AFRICA. Economic and Social Research Foundation (ESRF). 29 July 1998. Paper presented at the UNU-AERC Conference on "Asia and Africa in the Global Economy" at United Nations University Headquarters, Tokyo, Japan 3 – 4 August 1998) represents only the interest portion on the debt, and far exceeds the amounts that were actually borrowed (although this is true of large debts in developed nations as well). Authors Leonce Ndikumana and James K. Boyce estimate that from 1970 to 2008, capital flight from 33 sub-Saharan countries totalled $700 billion. Most African nations are pushing for debt relief, as they are effectively unable to maintain payments on debt without extending the debt payments indefinitely. However, most plans to forgive debt affect only the smallest nations, and large debtor nations, like Nigeria, are often excluded from such plans.
What large sums of money that are in Africa are often used to develop mega-projects when the need is for smaller scale projects. For example, Ghana was the richest country in Africa when it obtained independence. However, a few years later, it had no foreign reserves of any consequence. The money was spent on large projects that turned out to be a waste of resources: The Akosombo Dam was built to supply electricity for the extraction of aluminium from bauxite. Unfortunately, Ghanaian ores turned out to be too low grade and the electricity is now used to process ores from other nations. Storage silos for the storage of cocoa were built to allow Ghana to take advantage of fluctuations in the commodity prices. Unfortunately, unprocessed cocoa does not react well to even short-term storage and the silos now sit empty.
Another example of misspent money is the Aswan High Dam. The dam was supposed to have modernized Egypt and Sudan immediately. Instead, the block of the natural flow of the Nile River meant that the Nile's natural supply of nitrate fertilizer and organic material was blocked. Now, about one-third of the dam's electric output goes directly into fertilizer production for what was previously the most fertile area on the planet. Moreover, the dam is silting up and may cease to serve any useful purpose within the next few centuries. In addition, the Mediterranean Sea is slowly becoming more saline as the Nile River previously provided it with most of its new fresh water influx.
Corruption is also a major problem in the region, although it is certainly not universal or limited to Africa. Many native groups in Africa prioritize family relationships over national identity, so people in authority often use nepotism and bribery for the benefit of their extended family group at the expense of their nations. For example, the Congolese president Mobutu Sese Seko became notorious for corruption, nepotism, and the embezzlement of between US$4 billion and $15 billion during his reign. Despite this, corrupt governments often do better than authoritarian ones that replace them. For example, under Ethiopian emperor Haile Selassie, corruption was rife and poverty rampant. After his overthrow, corruption was lessened, but famine and military aggressiveness came to the fore. In any event, corruption both diverts aid money and foreign investment (which is usually sent to offshore banks outside of Africa), and puts a heavy burden on native populations forced to pay bribes to get basic government services.
In the end, foreign aid may not even be helpful in the long run to many African nations. It often encourages them not to tax internal economic activities of multinational corporations within their borders to attract foreign investment. In addition, most African nations have at least some wealthy nationals, and foreign aid often allows them to avoid paying more than negligible taxes. As such, wealth redistribution and capital controls are often seen as a more appropriate way for African nations to stabilize funding for their government budgets and smooth out the boom and bust cycles that can often arise in a developing economy. However, this sort of strategy often leads to internal political dissent and capital flight. Sub-Saharan Africa's government debt rose from 28% of gross domestic product in 2012 to 50% of gross domestic product in 2019. The COVID-19 pandemic caused it to rise to 57% of gross domestic product in 2021. In February 2024, following a large-scale trafficking of currency devices, the West African Monetary Union (UEMOA) and the Economic and Monetary Community of Central Africa (CEMAC), responsible for the monetary management of the CFA franc zone, and the Bank of France, which produces CFA franc coins, these central banks want to equip the CFA franc coins with a new alloy guaranteeing the security of the monetary circuit of the CFA franc zone, according to the International Copper Study Group (ICSG), the metal used to manufacture CFA franc coins, is prized because of its market value, The Economic and Monetary Community of Central Africa opened the first investigations in 2019, after noting the disappearance of CFA franc currency devices within the organization.
Human resources
A segment of Africa's population receive low wages or do not have stable employment. Real wages increased from 2006 to 2017, but the continent's average real wages has since been declining. As many as 85% of people in Africa subsist on less than $5.50 per day.
Two-thirds of the labor force are men and one-third are women. Women on average receive lower wages than men.
The International Labour Organization (ILO) recommends legislation and minimum wage policies to address low wages and wage inequalities in Africa. The ILO also encourages the promotion collective bargaining that covers a large part of worker population and addresses gender pay gaps.