This story was written by the ILO Newsroom For official ILO statements and speeches, please visit our “Statements and Speeches” section.

Africa: insecurities compound poverty

JOHANNESBURG - Africa has suffered greater economic insecurity and instability than any other region of the world during the past decade and half. According to a recent ILO report presented at last month's annual meeting of the African Union Labour and Social Affairs Commission, among the 23 African countries for which adequate data are available, 19 fall in the category "much-to-be-done", facing tremendous challenges in terms of policy reforms, building capacity and delivering results. An interview with Guy Standing, Director of the ILO Socio-Economic Security Programme.

Article | 11 May 2005

JOHANNESBURG - Africa has suffered greater economic insecurity and instability than any other region of the world during the past decade and half. According to a recent ILO report ( Note 1) presented at last month's annual meeting of the African Union Labour and Social Affairs Commission, among the 23 African countries for which adequate data are available, 19 fall in the category "much-to-be-done", facing tremendous challenges in terms of policy reforms, building capacity and delivering results. An interview with Guy Standing, Director of the ILO Socio-Economic Security Programme.

1. How do you measure economic security?

We identify seven aspects, such as income, access to work opportunities, safety in work, access to training, and - crucially - representation. Unless people have basic income security and access to organisations to protect their interests, they will be vulnerable. Then, we consider government policy commitments, the existence of institutions to deliver those policies, and outcomes.

2. In looking at national levels of economic security you divide Africa into four groups of countries in your report?

Countries are divided into four clusters: Pacesetters - countries with good policies, good institutions and good outcomes; Pragmatists - countries with good outcomes in spite of less impressive policies or institutions; Conventionals - seemingly good policies and institutions but with less impressive outcomes; and Much-to-be-Done countries - weak or non-existent policies and institutions, and poor outcomes.

Among the 23 African countries for which adequate data are available, 19 (or 83 per cent) had scores on the Economic Security Index that puts them firmly in the bottom "Much-to-be-Done" cluster, implying weak policies, weak institutions and weak outcomes.

The need for more stable economic growth has not been given the attention needed. Overall, social security systems in Africa are still little developed, less than elsewhere in the world. In a composite measure of legislative coverage of standard social security risks, the countries that are more advanced in this respect are in North Africa, with Mauritius and South Africa.

3. Income security is a major element of economic security. What about people's incomes in Africa?

While poverty rates are underestimated for Africa compared with other parts of the world due to measurement procedures, the problems are compounded by the fact that income insecurity is severe. According to the ILO's People Security Surveys in four African countries, most Africans suffer from acute income insecurity even if they are not actually in poverty at any particular moment.

In South Africa, about one-third feel their household income is insufficient for their food needs, and even more said that about their clothing, housing and health care needs. In Ethiopia, 78 per cent of men and 83 per cent of women say their household income is inadequate for basic needs. About 12 per cent of Ethiopian households said one or more young members had left school due to financial difficulties, about 8 per cent had been obliged to sell some livestock and 7 per cent had sold jewellery in distress sales.

Incomes are rarely stable or predictable. In Tanzania and Ghana most people said their household income fluctuated from month to month, particularly for those who relied largely or exclusively on non-wage income, for the less educated and for women.

4. Who most supports basic security and redistribution … and who does not?

In both Ghana and South Africa rural dwellers are more inclined to support the egalitarian option of similar incomes for all. On the contrary, the support for "no limits but policies to help the poor" is stronger among the more educated; precisely those who can expect to reach higher income levels than those with fewer qualifications.

Regardless of their own income, people want more help to be given to the poor in their societies, and this applies even if they anticipate being made slightly worse off in seeing that come about.

5. In South Africa, is there a legacy of apartheid and persistent race-based inequalities in the country?

In our survey, blacks were far more likely to favour equality and an upper limit on incomes, and whites were strongly against an upper limit. More encouraging is that a majority of both main racial groups favour a minimum floor income, corresponding to the popularity of the proposed basic income grant in the country.

6. What about employment as a means to "work out of poverty" and economic insecurity?

Very few Africans have strong employment security. In South Africa, a large proportion of wage and salary workers had been in their employment for a short time. The age structure of the labour force is key. Sadly, in the case of South Africa and other African countries, a factor in low average tenure is the impact of HIV/AIDS. Many workers do not live active lives long enough to have long-term jobs.

And there is the high degree of informality of the economy and work in Africa. In Ethiopia, our survey found that about a third of the urban workforce were in highly informal work, with women far more likely to be in that situation.

Most workers in Africa work informally even if they are working for so-called formal enterprises. Labour informality does not map neatly onto the enterprise-based concept so widely used in reports and by analysts. In Ethiopia a majority of workers in relatively large-scale enterprises (or establishments) are rather informal in terms of work status.

7. Is this due to the weak trade union movement in Africa?

A great many working people, particularly in Africa, are not aware of unions, are not drawn to belong to unions and are not aware of advantages that they could provide.

A feature in South Africa, approximately replicated in other countries, is that the least educated are the least likely to have an attitude towards unions: being least likely to be aware of advantages that could be gained from union membership, making them the least likely to join or to participate. The irony is that the least educated and disadvantaged groups that include women are the most in need of powerful collective voice to combat the many forms of insecurity that they face.

What is worrying in Africa even more than in other regions is the lack of voice in the world of work in the era of globalization and a weak collective voice leaves workers insecure.

8. What is the role of globalization and trade liberalization in all this?

Rather more controversially but significantly we find in an earlier worldwide report ( Note 2) that while trade liberalization is beneficial for economic security, capital account liberalization in developing countries can be detrimental to economic security and we attribute that to the fact that if there is no development of institutional capacities to withstand shocks then capital account liberalization causes greater economic instability.


Note 1

Note 2 - Economic security for a better world, International Labour Office, Socio-Economic Security Programme, Geneva, 2004.