Economía Agroalimentaria

Unraveling urban poverty dynamics in sub-Saharan Africa: a landmark study


On 16 November the Technical Network on Poverty Analysis (THINK-PA) hosted a highly engaging webinar titled “Leaving no one behind: urban poverty traps in sub-Saharan Africa”. During the session, Teresa Janz, PhD student at the United Nations University – Maastricht Economic and Social Research Institute on Innovation and Technology (UNU-MERIT), presented the results of a research paper that explored the complex relationship between urbanization and poverty in sub-Saharan Africa, providing insights into both the positive and challenging aspects of this ongoing transformation.

Urban population growth has significantly contributed to poverty reduction in sub-Saharan Africa. However, this urban expansion has not been without its complexities. Simultaneously, the share of poverty in urban areas has surged, revealing a nuanced interplay between urbanization and economic disparities.

Recognizing the dearth of evidence and data on the state and persistence of poverty in urban settings, Teresa and a team of researchers embarked on a mission to bridge this critical gap. The study focuses on urban poverty within the framework of poverty traps. Poverty traps are self-reinforcing mechanisms that cause poverty to persist and keep the poor below a critical threshold of wellbeing.

Nigeria, Tanzania, and Ethiopia, ranking among the most urbanized nations in sub-Saharan Africa, became the focal points of this ambitious research initiative. The choice of these countries adds a layer of specificity to the study's findings.

Utilizing nationally representative household panel data from the World Bank LSMS-ISA, researchers examined consumption patterns using both parametric and non-parametric models, providing a comprehensive view of the consumption dynamics at play.

Contrary to expectations, the results of the study suggest a lack of evidence for poverty traps among urban populations. The research highlights substantial consumption growth among poor households across time. However, the researchers also found evidence of the existence of a sticky consumption floor. That is, relatively poorer households find themselves in the vicinity of a consumption floor level repeatedly across time. These findings suggest that there might be a poverty trap at the lowest level of wellbeing, and thus despite the upward dynamics among the poor, some of the poorer households are being left behind.

The findings also trigger debates on the definition of poverty. Janz questioned whether daily per capita consumption slightly above USD 3.20 should unequivocally be considered an escape from poverty, especially in urban areas where prices are higher. The study emphasizes the vulnerability of households to regression despite improvements in well-being.

While acknowledging the limitations of the study. Teresa advocated for improved urban data collection methods in urban areas, including higher spatial disaggregation and urban coverage. This call for enhanced data gathering aims to provide a more accurate and nuanced understanding of urban poverty dynamics.

This comprehensive study not only unravels the complexities of urban poverty in sub-Saharan Africa but also paves the way for future research and policy interventions to address the evolving challenges of a rapidly urbanizing landscape.