The aim of this paper was to provide a broad overview of the nature and pattern of inequality in Africa. The descriptive statistics highlight that it is difficult to draw simple generalizations about the nature and pattern of inequality across Africa since there is substantial variation in both levels and changes over time. However, a few key observations do emerge. Firstly, Africa has higher than average and median inequality than the rest of the developing region. Secondly, a notable feature of inequality on the continent is the presence of seven economies exhibiting extremely high levels of inequality, the “African outliers”, which also drive this inequality differential with the rest of the developing world. Thirdly, based on the available data, over time the average levels of inequality have declined in Africa, which is driven mostly by the economies not classified as highly unequal. It also emerges that, when estimating the relationship between growth and inequality in Africa, for those countries with initially high levels of inequality, there is a stronger relationship between economic growth and inequality, a confirmation of the cross-country evidence outside of Africa. In terms of the drivers of inequality in Africa, it is shown above that the dependence on natural resources and its deleterious impact on building effective, transparent and accountable institutions remain key determinants of the high levels of inequality on the continent. Second, due to the labour market structure of many African economies, there are large proportions of the labour force involved in low-income agricultural self-employment or in informal sector jobs, which, when compared to the small share of wage employment in many African economies, often exacerbate inequality.
