Introduction

Poverty reduction continues to be the central goal of the international development Agenda because poverty and inequality are not just manifestations of economic and industrial backwardness; they are sources of social tension and powerful sources of societal conflict and widespread mistrust between different groups. According to Adam Smith (2007), “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.” Therefore, poverty elimination was prioritized at the Millennium Summit debate as a key social development goal, it is also the capstone objective of the SDGs. Despite a significant reduction in the general poverty levels worldwide, about one billion of the world population lives under extreme poverty. The international target originally widely adopted in 2000 was to reduce by half the proportion of people living in extreme poverty by 2015. Despite concerted efforts at the highest level, the goal was met in some countries but remained a difficult challenge for many other countries. A new 2030 date has now been set arising from the post- 2015 Agenda debate (United Nations, 2013).

A study for the United Nations University World Institute for Development Economics Research (UNU- WIDER) (2006) concluded that “high levels of inequality (above a Gini coefficient of 0.40) negatively impacts growth, due to “incentive traps, erosion of social cohesion, social conflicts, (and) uncertain property rights.” Poverty has wide- ranging negative effects in all societies especially developing countries because, by their very nature of being less industrialized, African countries are characterized by laterally unintegrated production structures and fragmented markets that are weak relative to advanced industrial nations. Equally, governments in these countries are less effective in compensating through public policy for these weaknesses because the state itself lacks financial capacity. In other words, regardless of the level of development, poverty has a large destructive component associated with unequal opportunities, and this destructive inequality contributes to lower growth (Birdsall, 2006).