Governance and income determinants of poverty reduction: A cross-sectional analysis of Sub-Saharan African countries

Journal Article

• Magazine \ Newspaper: African Journal of Business Management
• Issue Number: 3
• Volume Number: 6
• Pages: 756 -761

Publication Abstract

This paper using cross-sectional data on 39 Sub-Saharan African countries examines how political and

economic governance affect the most recent data on poverty for the period of 2000 – 2007. For this

period, the paper finds that the average percentages of population living on less than $1.25 a day and

on less than $2.00 a day are 50 and 70, respectively in Sub-Saharan Africa. It finds that these

percentages can be reduced by a half in 12.5 years and 28 years, respectively if the real per capita

gross domestic product (GDP) grows sustainably at 5% per annum. Whereas, at a real per capita GDP

growth rate of 7% per annum, the percentages can be reduced by half in 9 and 20 years, respectively.

Government expenditures are found irrelevant to the poverty reduction. Similarly, high literacy rates are

not found to trickle down to any significant poverty reductions. The political governance variables used

in the paper are all found not to contribute towards poverty reductions. The paper confirms strongly

that real per capita GDP is what matters most to poverty reductions in Sub-Saharan Africa.