African Inequality Review to fill in the gaps for policymakers

Scrutinising the factors that drive inequality across Africa so that better decisions can be made to deal with them – this is the aim of a multi-country research and policy initiative launched on 15 September.

The African Inequality Review (AIR) is jointly led by the African Centre of Excellence for Inequality Research (ACEIR) at the University of Cape Town (UCT); the International Inequalities Institute at the London School of Economics; the United Nations University World Institute for Development Economics Research (UNU-WIDER); and the World Bank.

Its work is guided by a high-level expert panel of senior African and international scholars, chaired by Ghanaian economist Emeritus Professor Ernest Aryeetey.

AIR seeks to fill specific gaps in the continent’s evidence base on inequality and lay the platform to reboot inclusive development in Africa, within increasingly difficult circumstances for governments.

The launch was held at the UCT Graduate School of Business at the V&A Waterfront, with a number of African policy stewards and AIR researchers also taking part online. They focused on the question: What do African policy leaders need from inequality research now?

ACEIR director, Emeritus Professor Murray Leibbrandt, welcomed delegates and said they were launching a process that they hoped would be maximally useful to the continent.

Digging down on the data

The first speaker was former minister of finance and chair of the Africa Expert Panel (AEP), Trevor Manuel. He said tackling inequality was a big challenge as it appeared to be inter-generational and he stressed the importance of having good data.

“Across the world now, autocrats drive inequality in so many places. If you look at Latin America, across the African continent, parts of Asia now, parts of Europe now, inequality is growing in leaps and bounds. The issues we thought would carry us through don’t find resonance.”

He said AIR was taking on a big task to identify priorities, ensure the data is in place, and provide policymakers with what they deem necessary to effect change.

“It’s important to understand who is affected,” Manuel said.

“This moment requires that we actively find and promote inclusive and sustainable development pathways.”

Emeritus Professor Leibbrandt said in the global context, the world is experiencing numerous shocks, including the climate crisis and political reconfigurations. This is having huge economic ramifications. “These changes are having real impacts on African countries trying to further their development. Budgets are shrinking, assistance packages are disappearing overnight. In our countries, we are facing more choices that are harder than you can imagine.”

Leibbrandt said Africa is having to forge its own way. “This moment requires that we actively find and promote inclusive and sustainable development pathways.”

He said the inequality lens has much to offer. “It sketches for us how life is actually working for all people within and across African countries, when they walk out the door; aspiring to quality education; aspiring to start a small business; aspiring to be productive in the workplace.”

Leibbrandt said they needed to figure out how to provide platforms of support to leverage this productivity, in our countries and the continent, and enable people to be their best.

“The Africa Inequality Review is trying to be a force for good in exactly that.”

He reiterated what Manuel said about the importance of data. It was crucial to generate and assess the comparable evidence across the continent and connect the evidence to policy processes.

“We only need to look at the world around us to see the consequences of persistently high inequality.”

He said the model for AIR builds on the experience of the Deaton Review in the United Kingdom and the recently completed Latin American and Caribbean Inequality Review, which were also large-scale and ambitious interventions.

“This isn’t the time for African researchers to be sitting on our hands,” said Leibbrandt.

An incredible group of people agreed to be part of the process to frame the AIR agenda and now to take it forward with strong links to the policy community from the outset, he said.

Leibbrandt said AIR was joining similar initiatives across the world. There is a strong focus on inequality now and the African voice and situation needed to be included in an organised, informative and useful way. 

He is currently at the United Nations in New York in support of an initiative to establish a new International Panel on Inequality.

A defining moment

Director of UNU-WIDER, Professor Patricia Justino, said the organisation decided to invest in this initiative because they believe inequality is one of the defining development questions of our time.  

“We only need to look at the world around us to see the consequences of persistently high inequality,” she said.

“Conflict is increasing. Climate change is intensifying pressures on livelihoods and public resources. Debt and fiscal constraints are limiting what governments can do. Food insecurity persists. Working people in many countries are seeing incomes and opportunities squeezed.

“Better knowledge about inequality … is increasingly a political, social and economic necessity.”

“At the same time, international aid budgets are shrinking, geopolitical fragmentation is increasing, and many African countries are being asked to manage greater risks with fewer resources and less international support.”

She said these pressures affect countries, communities, and people differently. 

“And the policy choices governments make in response – about taxation, public spending, social protection, education, employment or climate adaptation – have distributional consequences of their own.

“So better knowledge about inequality is not an interesting academic exercise; it is increasingly a political, social and economic necessity.”

She said we need to understand who is affected, who benefits, who is being left behind. “And we need to understand how policy choices can expand opportunity and strengthen inclusive development rather than inadvertently deepen existing inequalities.”

Asking the right questions

At the launch, a moderated panel, chaired by Michael Sachs, economic advisor to President Cyril Ramaphosa, was designed to set priorities for AIR’s research agenda. 

On the panel were Professor Carlos Lopes, honorary professor at Nelson Mandela School of Public Governance at UCT; Dr Hanan Morsy, deputy executive secretary (Programme) and chief economist at the United Nations Economic Commission for Africa; and Dr Anda David, senior economist and lead economist on inequality at Agence Française de Développement.

Sachs posed two questions to the panel: “Where are important policy choices being made without the evidence you wish you had?” and “What single inequality question, answered well within three years, would most change policy in your country or institution?”

The panel agreed that Africa needed continent-specific solutions.

“Fighting informality by ensuring all citizens are recognised through civil registration is a precondition for making economic transitions in the formal world possible.”

Professor Lopes said Africa needs to address poverty in ways that go beyond the common fixation on measuring income alone. 

“Contextual aspects such as how regulatory impositions and other international rules contribute to specific dimensions of distribution and extraction of value have immense repercussions on inequality patterns. 

“Access to assets such as land, capital, incentives, and shared infrastructure will define the potential to transform livelihoods and contribute to structural transformation, rather than seeking compensation through transfers. Fighting informality by ensuring all citizens are recognised through civil registration is a precondition for making economic transitions in the formal world possible. These are all African-specific concerns that should be part of any policy discussion about inequality on the continent.”