Continent's economy continued to grow despite the financial crisis – but almost half of Africans still earn less than $1.25 a day, warns Africa Progress Panel

Africa's impressive growth during the financial and economic crisis of the last five years will be put at risk unless action is taken to combat rising inequality, according to the annual health check on the continent from a panel led by the former UN secretary general Kofi Annan.

The report from the Africa Progress Panel found that African countries were growing consistently faster than almost any other region, with booming exports and more foreign investment.

But it warned that there was a contrast between a growing yet still relatively small middle class and the Africans left behind after a decade of buoyant activity.

Although seven out of 10 people in the region live in countries that have averaged growth of more than 4% a year for the past decade, Annan's study found that almost half of Africans were still living on incomes below the internationally accepted poverty benchmark of $1.25 a day.

Ghana was the fastest growing economy in the world in 2011 and Ethiopia expanded more quickly than China in the five years to 2009, according to the report, but it added that the current trickle-down pattern of economic growth was leaving too many people in destitution.

"The deep, persistent and enduring inequalities in evidence across Africa have consequences," the report said. "They weaken the bonds of trust and solidarity that hold societies together. Over the long run, they will undermine economic growth, productivity and the development of markets."

Other members of the panel include Olusegun Obasanjo, the former president of Nigeria; Graça Machel, the women's and children's rights advocate; the former managing director of the International Monetary Fund, Michel Camdessus; and Tidjane Thiam, the Ivorian-born chief executive of Prudential.

In his foreword to the report, Annan said Africa had "stood tall" through the global crisis and progress had been made towards hitting the UN millennium development goals, which include halving global poverty, universal primary education and a two-thirds reduction in infant mortality.

He added: "It cannot be said often enough, that overall progress remains too slow and too uneven; that too many Africans remain caught in downward spirals of poverty, insecurity and marginalisation; that too few people benefit from the continent's growth trend and rising geo-strategic importance; that too much of Africa's enormous resource wealth remains in the hands of narrow elites and, increasingly, foreign investors without being turned into tangible benefits for its people."