Economic Growth Income Inequality And Poverty Reduction Evidence From Sub Saharan Africa Countries

In recent times there has been a renewed interest in relationships between economic growth, in-rnequality, and poverty. In this paper, we use System GMM estimation of dynamic panel data onrnthe twenty-seven SSA countries to consider whether the recent tremendous growth has had anrnappreciable impact on Poverty and Inequality. We argue that such economic growth have beenrnassociated with poverty reduction and widen income inequality. Thus, Economic growth in SSArncountries is often aimed at improving the life of the poor, although the e¤ectiveness has oftenrnbeen hindered by inequality on transferring growth into poverty reduction. Moreover, althoughrnthe non-monetary measure and income poverty measures have similar result-shows reducingrnpoverty, the non-income poverty especially the destitution data suggests that SSA countriesrnare poorer than we thought. We argued that SSA countries would do promote a policy ofrnIncome-enhancing (i.e. economic growth) and inequality-reducing complementarily to translaterninto poverty reduction. In addition, we revealed that the Kuznets hypothesis was invalid. So,rnstrengthening the egalitarian income distribution system in every stage of development is rec-rnommended rather than after a certain level of development as Kuznets argued. Furthermore,rnwe nd that Credit has an important contribution to reducing poverty but it increases incomerninequality. Our argument here is building a pro-poor credit institution which should concen-rntrate on consumption banking to bene t the poor, and to reduce income inequality. As well asrnbeing important to policy debates, this study may help to di¤use the more general pessimismrnthat can underestimate the e¤ect of economic growth on income redistribution in developingrncountries speci cally in SSA countries.

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