Africa’s growth of the elite is no true growth
As an admirer of John Maynard Keynes economic theories, I strongly believe that economic growth should benefit all members of society but that is not always the case across the world and its even worse in sub Saharan Africa. Maynard theory that a widening income gap hurts social stability and slows overall gross domestic product growth is what is taking place in Africa. According to an independent study, the wealthiest 10 percent of Africans are expected to enjoy 46 percent of the continent’s GDP next year, while the poorest 10 percent will only be able to enjoy 2.8 percent. In cities across the continent, shopping malls are being built, people are buying more cars and fast-food restaurants are opening faster to meet the growing appetite of an emerging middle class.With that shift in the population, rural areas could lose out, being passed over for development. Historically, in any growing economy, industrialization has played a significant role in this demographic shift, and the youth populations tend to flock to cities for higher-paying jobs.
African countries government have launched scheme to pay its people in the countryside as part of a welfare program which many analysts and researchers have termed as the most effective way of those in power to keeping them in poverty. To them, their arguments goes, the government should be finding ways to provide rural population with a substantial means of living. As the continent of Africa aspires to have among the biggest economies in the world within a generation especially Nigeria and South Africa, policy makers should ensure that economic prosperity benefits all and not just the metropolitan elites. In my opinion, the solution, however, is not greater welfare but enhanced economic opportunities, including greater access to loans by the poor, especially for micro businesses.Currently the banking sector only reaches about less that 15 percent of the total African population. This means that the vast majority of Africans are excluded from the financial system. They must be included if we are to narrow the income gap and the growth of mobile money transfer is a step in the right direction. Growth with equity has long been the stated objective of the governments but in Africa there remains much work to be done in terms of helping the least economically well off improve their lives.