Inequality in Africa is a matter of choice

By Billow Kerrow

The  government unveiled Kenya’s largest budget in history — at Sh1.8 trillion — for 2014/15. It includes approximately Sh20 billion for specifically mitigating effects of poverty and inequality, through affirmative action and social protection programmes; a positive gesture by all means, but a drop in the ocean.

The 2014 Economic Survey also launched this week reveals about 45 per cent of Kenyans still live in poverty. Malaria alone killed some 46,000 Kenyans last year, not to mention other common diseases. Nearly two million will require relief food to stave off hunger.

In Kenya, the top 10 per cent richest people control 40 per cent of national income. Globally, the wealth of top one per cent richest people in the world, to be precise some 85 people, is  $110 trillion, representing 65 times more than that of the bottom 50 per cent of the world’s population, or some 3.5 billion people. Eighty per cent of the world’s people earn less than $10 per day.

Some 22,000 children die daily globally due to poverty. Over one billion people are illiterate; a similar number has no access to water. Over 50 per cent of the world’s poor live in Africa. And so on.

The statistics are depressing. And this rising inequality is the reason for the decline or stagnation of poverty in Africa.

We are all born free and equal, so we say. But in reality, we are unequal; or to be precise, some are more equal than others.

This extreme socio-economic inequality is not only morally objectionable but equally worrying because of its negative impact on economic development and its harmful effect on social cohesion. The capitalist model we embrace decries social obligations. Remember the words “when I feed the poor they call me a saint, but when I ask why they are hungry they call me a communist”?

The Pan-Africa conference on inequalities just concluded in Accra brought to the fore the urgent need for governments in the world, and Africa in particular, to address the rising inequalities.

The key drivers of inequality vary from country to country but in most cases the political exclusion and socio-economic policies are the problem. Bad governance where political patronage and expediency determine how resources are allocated or how development perspectives are pursued plagued most African nations.

The continent may still be resource-rich relative to other parts of the world but multilateral institutions such as the World Bank and IMF, as well as donor countries, have for long determined our socio-economic policies.

The growth paradigms predicated on macro-economic factors that largely ignore the realities in our countries only succeeded in creating an elitist economy that made the rich richer, and the poor to remain so.

Too few have benefitted from economic growth in Africa in recent years, as most resources remained in the hands of a few. Consequently, there have been sharp disparities not just in inequalities in income and opportunities but more significantly in access to basic services such as education, health, water, etc.

We disregard priorities such as agriculture and SMEs, which support 80 per cent of our populations. The so-called modern sector where government spends its time and resources does not create enough jobs or wealth for the masses, even for countries that have pursued structural transformation.

Our land wealth remains worthless because we cannot collateralise the same. The financial institutions pursue mega profits from investing in “money trade” and not productive sectors of the economy.

Lax regulatory structures in our countries have favoured the rich, especially in the areas of financial capital, investments, tax and trade agreements.

The redistributive effect of taxation policy is ignored as the poor remained the most taxed.

Liberalisation and deregulation has helped create a “predatory” private sector in most countries that has perpetuated the inequalities. It is time Africa embraced political inclusion and re-engineers its socio-economic development models to address these glaring inequalities.

The writer is a political economist and Mandera County Senator