How the Adoption of Government Interventions has Affected Income Inequality and Poverty in Some African Countries

Abstract

The majority of Sub-Saharan African (SSA) nations continue to have higher rates of poverty than other developing nations in comparable parts of the world. To reverse this situation, the World Bank established the seventeen Sustainable Development Goals (SDGs), which aim to reduce income inequality and end extreme poverty by 2030, while also increasing the shared prosperity of the lowest 40% of each nation's population. Hence, the governments of African countries have implemented several policies to achieve this goal. This paper examines how the implementation of these policies has impacted poverty and income inequality in six African countries: Nigeria, Cote d’Ivoire, South Africa, Mozambique, DR Congo, and Tanzania, comparable to Ghana. Machine Learning was applied to achieve this objective. The results showed that, while agriculture expenditure has a positive impact on income inequality in Nigeria, Mozambique, and DR Congo, as in Ghana, agriculture expenditure has a negative impact on income inequality in Cote d’Ivoire and Tanzania. Regarding poverty, agricultural expenditure has a positive relationship with poverty in Côte d’Ivoire, South Africa, Nigeria, Tanzania, and DR Congo, but a negative impact on poverty in Mozambique, as was the case in Ghana. Generally, there was a mixed relationship between government policies and both income inequality and poverty across the six countries, as was also the case in Ghana. In addition, the policies implemented have different impacts on poverty and income inequality in the various countries. This implies that policies that help reduce poverty are not necessarily the same as those that help reduce income inequality.