The economies of many countries in sub-Saharan Africa grew at record rates in the period before the coronavirus pandemic. Ethiopia and Rwanda, for example, have shown some of the highest growth rates in the world, with their GDP growing by an average of more than 7.5% over the past twenty years. Despite this, it is not so clear whether the gains from economic growth have been evenly distributed across regions within countries, as income data are not always available. To assess the extent to which sub-Saharan African economic performance is distributed across regions, we used satellite imagery of the Earth’s night lights as an indicator of economic activity. The data show that, up to at least 2010, African countries have made tremendous progress in reducing regional income inequality (the difference in production per capita between regions of a country). This contrasts sharply with other parts of the world, where inequality has either increased or convergence has been slower. Looking more closely at the drivers of regional disparity, we found that progress was largely driven by improvements in basic infrastructure that helped lagging regions converge more quickly at the national level. Night lighting per capita has increased several times in poorer regions, while the largest gains have been in oil-producing countries and advanced markets such as Ghana and Kenya.

However, not all lagging areas have improved. The most vulnerable states, as well as those experiencing conflicts on their territory, have made little progress in reducing regional inequalities. And even in countries that experienced decades of growth, progress stalled after 2010, and regional disparities likely widened after the pandemic. Access to clean water, electricity and mobile phone services, for example, is two to four times lower in lagging regions than in leading ones, in part because government spending per capita is much lower. Similarly, the percentage of residents who have completed primary and secondary education is two to three times lower in lagging regions. In countries where access to public services is generally low and distribution is highly unequal, the gap is even greater. In Burkina Faso, for example, access to electricity is almost 20 times higher in pioneer regions.

However, regional disparities remain and have increased since the pandemic.

We found that four main factors have contributed to the reduction of regional disparities in recent decades. First, macroeconomic stability. Inequality is exacerbated in countries with high persistent inflation due to undermining the purchasing power of consumers, reducing government spending in real terms, and discouraging private investment. Second, trade openness, because easier access to world markets promotes convergence by increasing the cost of a country’s resources, such as raw materials. The third is strong institutions and political stability, and the fourth is targeted investment. First, investment outside the capitals is likely to have an impact, creating jobs and boosting economic activity in lagging regions.

* Habtamu Fuse and Xiaoxing Yao are Economists in the IMF’s Africa Department. The article was published on the blog of the International Monetary Fund.