Tackling poverty through decent work for Africa’s sustainable development
Economic growth has been a key driver of poverty reduction in Africa, but the lack of decent jobs needed to lift people out of poverty is hindering progress towards the 2030 Sustainable Development Goals.
18 May 2016
ABIDJAN (ILO News) – The incidence of poverty remains stubbornly high in Africa with job deficit and income inequality exacerbating gaps and keeping countries from reaping the dividends associated with economic growth and social progress, warns a new report by the International Labour Organization (ILO).
The 2016 World Employment and Social Outlook (WESO) on “Transforming jobs to end poverty” by the ILO, pinpoints that over 36 per cent of the emerging and developing world live in poverty – on a daily income of less than US$ 3.10 purchasing power parity (PPP).
Progress among African countries was less pronounced, as more than 40 per cent of the African population continued to live in extreme poverty and some 64 per cent in extreme or moderate poverty. It is estimated that in 2015, 57.8 per cent of the employed population in Africa were still classed as working poor, living on less than $3.10 PPP per day.
The report highlights that, in South Africa, wages contributed the most to the decline in poverty, followed by non-contributory transfers; in Ghana, wages and self-employment income contributed the most; while in Egypt and Rwanda, it was a combination of labour and non-labour incomes that contributed to the decline.
However, persistent poverty cannot be solved by income transfers alone; more and better jobs are crucial to achieving this goal, the ILO underscores stressing the fact that high levels of income inequality reduce the impact of economic growth on poverty reduction.
In Africa, eliminating poverty through social transfers alone cannot be considered as the solution as it would represent a major challenge, WESO 2016 further points out.
The total cost of eliminating extreme poverty represents more than half of total expenditure on public social protection in nearly one out of three emerging and developing countries, in 60 per cent of the countries in Africa and in 85 per cent of low-income countries, according to the new study.
On average, the income gap for eliminating both extreme and moderate poverty represents nearly 70 per cent of total spending on social protection in the emerging and developing countries for which data are available.
Income inequality can be a serious obstacle for poverty reduction because it might exclude populations from opportunities.
The study finds that labour income ranges between 34 per cent (South Africa) and 92 per cent (Ghana) of the total income for moderately poor households. In Rwanda and Ghana, private transfers are the next most important source of income and comprise about 4–10 per cent of the household income. In South Africa, non-contributory social transfers (52 per cent) and private transfers are also an important source of income for poor households.
In African countries, female-headed households tend to depend more on private transfers than male-headed ones, regardless of their income level. However, they rely more on a mix of labour income, non-contributory social transfers and private transfers when they are moderately or extremely poor.
Key findings “tell us that it is past time to reflect on the responsibility of rich nations and individuals in the perpetuation of poverty. Accepting the status quo is not an option,” concludes Raymond Torres, ILO Special Advisor on Social and Economic Issues.
The 2016 World Employment and Social Outlook (WESO) on “Transforming jobs to end poverty” by the ILO, pinpoints that over 36 per cent of the emerging and developing world live in poverty – on a daily income of less than US$ 3.10 purchasing power parity (PPP).
Progress among African countries was less pronounced, as more than 40 per cent of the African population continued to live in extreme poverty and some 64 per cent in extreme or moderate poverty. It is estimated that in 2015, 57.8 per cent of the employed population in Africa were still classed as working poor, living on less than $3.10 PPP per day.
The report highlights that, in South Africa, wages contributed the most to the decline in poverty, followed by non-contributory transfers; in Ghana, wages and self-employment income contributed the most; while in Egypt and Rwanda, it was a combination of labour and non-labour incomes that contributed to the decline.
However, persistent poverty cannot be solved by income transfers alone; more and better jobs are crucial to achieving this goal, the ILO underscores stressing the fact that high levels of income inequality reduce the impact of economic growth on poverty reduction.
In Africa, eliminating poverty through social transfers alone cannot be considered as the solution as it would represent a major challenge, WESO 2016 further points out.
The total cost of eliminating extreme poverty represents more than half of total expenditure on public social protection in nearly one out of three emerging and developing countries, in 60 per cent of the countries in Africa and in 85 per cent of low-income countries, according to the new study.
On average, the income gap for eliminating both extreme and moderate poverty represents nearly 70 per cent of total spending on social protection in the emerging and developing countries for which data are available.
Addressing poverty gaps
“If we are serious about the 2030 Agenda and want to finally put an end to the scourge of poverty perpetuating across generations, then we must focus on the quality of jobs in all nations.”, ILO Director-General Guy Ryder emphasizes.Income inequality can be a serious obstacle for poverty reduction because it might exclude populations from opportunities.
The study finds that labour income ranges between 34 per cent (South Africa) and 92 per cent (Ghana) of the total income for moderately poor households. In Rwanda and Ghana, private transfers are the next most important source of income and comprise about 4–10 per cent of the household income. In South Africa, non-contributory social transfers (52 per cent) and private transfers are also an important source of income for poor households.
In African countries, female-headed households tend to depend more on private transfers than male-headed ones, regardless of their income level. However, they rely more on a mix of labour income, non-contributory social transfers and private transfers when they are moderately or extremely poor.
Transforming jobs to end poverty
If the U.N. 2030 Poverty Sustainable Development Agenda is to be achieved, addressing structural challenges to providing quality jobs becomes a pressing priority for poverty alleviation. The ILO will focus on key areas to support opportunities for transforming jobs and ending poverty:- Tackling low-productivity traps, which lie at the heart of poverty;
- Strengthening rights at work and enable employer and worker organizations to reach the poor;
- Alleviating poverty through well-designed employment and social policies;
- Reinforcing governments’ capacity to implement poverty-reducing policies and standards;
- Boosting resources and making the rich aware of their responsibility; and
- Involving the ILO in the achievement of Sustainable Development Goals.
Key findings “tell us that it is past time to reflect on the responsibility of rich nations and individuals in the perpetuation of poverty. Accepting the status quo is not an option,” concludes Raymond Torres, ILO Special Advisor on Social and Economic Issues.