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The West Africa inequality crisis

This year marks the fourth year of implementation of the Sustainable Development Goals (SDGs), which aim to address global challenges such as poverty, inequality, climate change and environmental degradation, and to ensure that no one is left behind. It also marks the mid-point of the first 10-year implementation plan of the African Union’s Agenda 2063, which seeks to promote ‘a prosperous Africa based on inclusive and sustainable development; and an Africa whose development is people-driven, relying on the potential of African people, especially its women and youth, and caring for children’. 1 However, African countries, especially those in West Africa, are simply not doing enough to meet these regional and global goals.

In 2018, six of the 10 fastest-growing economies in Africa were in West Africa (Côte d’Ivoire, Senegal, Ghana, Burkina Faso, Benin and Guinea), and Côte d’Ivoire, Ghana and Senegal were among the 10 fastest-growing economies in the world.2 The region has seen impressive economic growth in the past two decades, and in a few countries this has been matched by a significant reduction in poverty levels. However, in most countries the benefits of this unprecedented economic growth have gone to a tiny few. Inequality has reached extreme levels in the region, and today the wealthiest 1% of West Africans own more than everyone else in the region combined. In Nigeria, Africa’s largest economy, the richest man earns about 150,000 times more from his wealth than the poorest 10% of Nigerians spend on average on their basic consumption in a year. It would take 46 years for the richest Nigerian man to spend all of his wealth, even if he spent at a rate of $1m a day.

It would cost about $24bn a year to lift all Nigerians above the extreme poverty line of $1.90 a day. By comparison, the wealth of the five richest Nigerian men combined stands at $29.9bn – more than the country’s entire budget in 2017. Nigeria’s stark levels of inequality are comparable only to those in Brazil, where the richest 5% of the population have as much wealth as the remaining 95% (the six richest men in Brazil have as much wealth as the poorest 50% of the population – over 100 million people).

In Ghana, West Africa’s second biggest economy, one of the richest men earns more in a month than one of the poorest women could earn in 1,000 years. In the decade ending in 2016 the country saw 1,000 new US dollar millionaires created, but only 60 of these were women. While a few people grew super-rich, nearly one million more, mostly from the Savannah Region of the country, were pushed into the poverty pool, while thousands of those who were already poor sank even deeper. The wealthiest 10% of Ghanaians now account for 32% of the country’s total consumption. This is more than the consumption of the bottom 60% of the population combined, while the very poorest 10% of Ghanaians consume only 2%.

Inequality is also rife in the provision of public services, such as education and healthcare. For example, women from rich families in Mali are 15 times more likely to have received a secondary education than those from poor families. In Nigeria, a woman from a poor family is 26 times more likely never to have been to school compared with a woman from a rich family,and in Ghana a girl from a poor family is 14 times more likely never to have been to school than one from a rich family.4 An estimated 70% of the poorest girls in Niger have never attended primary school; among those who have attended, school supplies and materials account for almost 75% of spending on education for the poorest households. Niger is the least educated country in the world, with the average length of schooling being just 18 months. 5 Only one in two girls goes to primary school, one in 10 to secondary school and one in 50 to high school.

While some governments are doing little or nothing to tackle inequality, and some through their actions are even making it worse, a few are taking a different route. Senegal has increased its public spending on health services and education, making it the 13th highest-spending country in the world in these sectors, proportionally as a percentage of GDP. Senegal also has one of the largest safety net programmes in Africa.

Inequality and poverty are not preordained: they are the products of political choices and public policy. Tackling inequality is critical to the fight against extreme poverty. Indeed, unless countries significantly close the gap between the richest and the rest, ending extreme poverty will remain just a dream. Governments are not the only ones who need to work to reduce inequality, but without them success will be impossible.

This briefing paper examines in detail how committed West African governments are to reducing inequality. To do this, it first provides an overview of the inequality crisis that characterizes much of the region, and explains why inequality matters not just to the poor but to the whole of society.

The Commitment to Reducing Inequality (CRI) Index, devised by Development Finance International (DFI) and Oxfam, has analysed data from 157 countries around the world, and ranked them according to three major policy areas that are recognized as being key to tackling inequality. These include progressive spending on assets such as schools, hospitals and social protection, taxing the better-off more than the poorest people, and paying workers a living wage. For this review, CRI data have been used to assess the performance of all 15 member countries of the Economic Community of West African States (ECOWAS), along with Mauritania. Government action in these areas has been rated to give countries a combined score and a CRI Index ranking in comparison with the other 15 countries in this region and with other African countries. The review also assesses policies relating to land and agricultural investment in West Africa.

Analysis based on the CRI Index shows that, of the five major economic blocs in Africa, West Africa is trailing behind all the others in tackling inequality. In fact, West African citizens are living under governments that are only half as committed to reducing inequality as their counterparts in Eastern and Southern Africa. Oxfam’s assessment clearly indicates that governments in West Africa are, on average, the least committed to reducing inequality across all regions of Africa and that most of them are choosing to ignore the inequality crisis rather than address it.

The assessment does offer glimmers of hope, with some West African countries doing well on addressing inequality in certain areas, even if they are failing in others. Burkina Faso and Senegal, which have seen modest investments in progressive social spending policies, are notable exceptions, and Burkina Faso is one of the 10 countries most committed to social spending in sub-Saharan Africa. However, no other West African government appears among the top 10, and Nigeria, Sierra Leone and Guinea-Bissau are among the least committed to social spending on the African continent.

There is nothing inevitable about the crisis of inequality that defines the West Africa region, but without a concerted effort by governments, the crisis is likely only to get worse. In short, the key is for West African governments to radically increase their commitment to tackling the issue. It falls to national governments and to ECOWAS and the West African Economic and Monetary Union (UEMOA) to reverse the trend by prioritizing a regional plan to fundamentally change the status of West Africa as the African region least committed to the fight against inequality.

This paper sets out a policy agenda that could help to dramatically reduce inequality in West Africa, including through promoting progressive taxation, boosting social spending, strengthening labour market protection, investing in agriculture and strengthening land rights for smallholder farmers.