More landless, more problems: Investigating the relationship between land and income inequality in Africa

Abstract

Background: In pursuit of greater equality, African nations have implemented land reforms to increase land ownership among indigenous citizens. Despite these efforts, Africa remains one of the world’s most unequal regions.

Aim: In line with the sustainable developmental goals (SDGs) 10 of the Equal World campaign, the study investigates how land ownership influences income inequality in African countries. We create a unique time series measuring landholders per square kilometre of agricultural land and explore its relationship with income inequality.

Setting: The analysis covered the period of 2000–2020, using data from the World Bank gender data portal and World Bank Development Indicators to compute the land inequality index.

Method: Conventional cointegration and advanced wavelet coherence techniques are employed to examine the influence of land ownership on inequality.

Results: Traditional estimators reveal a long-run positive relationship between land ownership and income inequality, with bi-directional causality, implying that African countries with higher (lower) land concentration are associated with higher (lower) levels of inequality. However, wavelet coherence analysis reveals that only 8 countries exhibit a positive relationship, while 16 show a negative relationship, and 2 show an insignificant relationship. Notably, most countries with a negative (positive) relationship (did not) implement additional land reforms after 2000.

Conclusion: We conclude that countries that fail to undergo continuous adjustments in land reforms risk experiencing a higher concentration of land ownership and income inequality. This study’s findings underscore the importance of land policy updates for long-term equity.

Contribution: Unlike previous studies using the Gini Land coefficient, this study measure agricultural landowners per square kilometre, capturing the entire population and its relationship with income inequality.