EVOLUTION OF POVERTY, INEQUALITY AND ECONOMIC GROWTH IN WEST AFRICA: AN EMPIRICAL INVESTIGATION

Abstract

The effects of inequality and poverty on growth has been extensively debated in the literature with studies providing conflicting results. However, understanding the effects of inequality and poverty on economic growth is cardinal for informing development policies in West Africa where poverty and inequality present significant development challenges. Despite the decline in poverty, economic growth measured by GDP per capita is sharply declining in West Africa. Using recent yearly date covering 1980-2022 and applying multilevel modeling techniques (fixed effects and random effects models), this paper empirically investigates the effects of inequality and poverty on per capita growth in West Africa. The empirical estimates reveal that economic growth matters for both inequality and poverty reduction. Per capita growth reduces income inequality as well as the incidence and intensity of poverty in West Africa. Importantly, the regressions show that increases in crop production reduces poverty and inequality; hence, improvement in agricultural produce is critical for enhancing growth in West Africa.  The findings suggest that inclusive policies and programs that reduce inequality and poverty are essential for boosting economic growth in West Africa.

Keywords: Poverty, Inequality, Economic Growth, West Africa, GDP Per Capita, Development Challenges.