Aid, Employment and Poverty Reduction in Africa

Growth in Africa is weakly linked to poverty reduction. The reason is that Africa has failed to create enough good jobs. Structural transformation-the relative growth of employment in high productivity sectors-has not featured in Africa's post-1995 growth story. As a result, the region's fastest growing economies have the least responsiveness of employment and poverty to growth. Development aid is partly responsible. Across Africa more aid went to countries with a low employment intensity of growth. The study proposes a new approach to aid and poverty in Africa, one that focuses on supporting structural change for job creation.