17 October 2018

Africa Needs to Invest Much More in Its People

Photo: World Bank
World Bank Africa VP Hafez Ghanem.
guest column

Progress in the fight against extreme poverty in Africa has been way too slow. Although the poverty rate has declined from 54 percent in 1990 to 41 percent in 2015, a rapid population growth of 2.6 percent per year has offset these gains, resulting in 130 million more poor people. Today more than half of the world’s 725 million people living in extreme poverty are in Africa. The war against poverty will be won or lost in Africa. And it must be won.

Fighting African poverty should be a global concern. The rising number of extremely poor Africans is a major developmental and humanitarian challenge for the continent. It also could have far-reaching social, political and economic implications for the rest of the world, and particularly for Europe.

I believe that Africa is lagging the rest of the world in poverty reduction because it has not invested sufficiently in its people. Of course, infrastructure, macro-economic stability, institutions and governance are important for growth and poverty reduction. But unless Africa has a healthy and educated population, it will not succeed in attracting enough quality investment to close the infrastructure gap, and institutional and governance reforms will continue to yield disappointing results.

The World Bank has recently presented a new “Human Capital Index (HCI)” that captures the productivity and economic potential of a country’s population. It combines measures of child survival rates, access to education and its quality, and health outcomes.

Studies have shown a very strong relationship between the values of this index and growth outcomes. Those results are quite intuitive. Without a healthy, educated and resilient population countries cannot compete effectively in the world economy.   This will become increasingly true in coming years as technology is changing the nature of work, and the frontier for skills is moving rapidly bringing both opportunities and risks.

The HCI results for Africa are cause for concern. Twenty-five of the bottom 30 countries in the world are in Africa. Africa’s education systems are in crisis with about 50 million children out of school, low completion rates and weak learning outcomes. The situation is not much better on the health side. Nearly one third of African children are stunted. That is, they will never reach their full physical and mental potential. Too many of Africa’s poor are not covered by any social protection or labor program, leaving them to fend alone during crises. These statistics are tragic but can be changed.

If the long-term aspirational goal of providing complete education and full health to Africa's citizens was achieved—generating an HCI score at the top of the range—then the continent's Africa’s GDP per worker would be 2.5 times higher than current levels. So investing in health, education and social protection in Africa has a substantial return and should be a top priority.

Investing in education does not simply mean building more schools. It requires programs for early childhood development; strengthening curricula for the modern economy, including developing soft skills like problem solving, and supporting teachers to be more effective. And schools must be more accountable for learning outcomes.

Investing in health will require better health systems with a stronger focus on maternal and child health, nutrition and on female reproductive health. During a recent visit to a hospital in Bingerville, a poor suburb of Abidjan in Côte d’Ivoire, I saw how seemingly simple reforms can dramatically reduce maternal mortality and stunting rates. The first reform linked additional financing to specific outcomes. The second created a transparent oversight and management structure representing the interests of doctors, the community and the government.  Better management, buy-in from all players, and additional funds for good results. added together, save the lives of mothers and children.

It would be extremely difficult to improve Africa’s HCI, and hence its growth and poverty reduction prospects, without greater investment in female reproductive health with a view to reducing fertility rates. African women on average have 4.8 children, twice the world average of 2.4. They often have too many children at too young an age, with too little time in between births for them to stay healthy. This pattern not only puts mothers and children at risk, it also strains public services and budgets.

Africa can benefit from the experience of countries around the world that have lowered fertility rates. The most successful interventions have included mobilizing support from community and religious leaders, promoting initiatives to keep girls in school and delaying marriages.

Africa’s greatest resource is its young people, with their energy, creativity and resilience. The 21st century could produce an African renaissance if governments and their development partners prioritize investing in people, especially the youth. Ensuring that Africa’s youthful population is healthy, educated and well-equipped for the future is the best way to eradicate poverty in Africa and contribute to the world’s stability and prosperity.

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