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.