Piketty’s main argument on the world’s economies, in highly condensed form, is that the rate of return on capital r (annual corporate profits divided by the market value of capital stock) exceeds the rate of growth of domestic economies g (the average annual change in net national income). As a result, income for the wealthy grows so that inequality (measured by distribution of either income or wealth) continues to grow. Further, where formation of capital is through inheritance rather than saving, this inequality is reinforced. Piketty proposes a tax on capital as a way to redress the balance and limit inequality.

The African continent, while often neglected in economic studies, is a region of growing population and economic transformation, though not of impressive growth. The design of this chapter is to assume considerable validity in Piketty’s assertions for the leading global economies, and to ask to what degree these assertions apply to Africa: to individual nations or to the continent as a whole. Is it the case that rates of profit in Africa exceed rates of economic growth? Is the level of inequality and the growth of inequality in Africa greater or lower than for leading economies? More generally, in what way does Africa contribute to global inequality?

We review the application of Piketty’s thinking on Africa and emphasize three main points. First, African levels of inequality seem generally high, and the temporal shifts of inequality in the undercapitalized countries of the African tropics seem to differ significantly from major economies. Our initial analysis suggests that inequality in African nations has been higher than for the major world economies highlighted in Piketty’s analysis and, in addition, that the shifting temporal patterns of inequality for most of Africa differ from patterns for leading economies. In many African economies, the peak of income inequality occurred around the 1960s, the very period of the lowest inequality in Europe and the US. Additionally, while inequality has risen in African economies from the 1990s, most African countries have avoided the rapid increase in income inequality that marked the economies in Piketty’s analysis.