Uganda: Uganda's Poverty Level Reduces By Seven Per Cent

from All Africa

The East African (Nairobi)

Barbara Among
Nairobi

The poverty level in Uganda has reduced by a significant seven per cent; from last year's 38 per cent, a new report by the Uganda Bureau of Statistics has said.

However, this is still far from achieving the Millennium Development Goals target of reducing poverty levels by half, by 2015.

According to figures from the Uganda Bureau of Statistics, the national poverty level declined between the two most recent household surveys by 7.8 per cent, going down in rural areas by 8.5 per cent compared with only 0.7 per cent in urban areas.

"Strong growth in consumption among the rural population partly led to a significant poverty reduction, as no significant changes were observed in urban areas. But the incidence of poverty remains higher in rural areas compared with urban areas," says the report

The report shows strong growth in mean consumption expenditure per adult, especially for rural areas.

The report says the decrease in poverty is more pronounced in rural areas in the eastern and western regions. Rural areas experienced strong growth in mean consumption levels.

Overall, the report shows there were improvements in the livings standards and in distribution of income observed between the two most recent national household surveys, that is, the Uganda National Housing survey (UNHS) 2002/2003 and the UNHS survey of 2005/2006

"The growth effect contributed more to poverty reduction than redistribution, with the exception of the urban areas where the redistribution effect dominated the growth effect," says the report.

However, in absolute terms, the number of poor persons in urban areas has remained the same since 1993 and urban poverty is yet to receive the attention of policy makers. Nearly 8.4 million Ugandans were living in poverty by 2005/06, with a majority reside in rural areas

The report shows that Head count poverty declined, regardless of geographical location though the extent of decline varies.

The poverty level in the central region stood at 45.6 per cent in 1992/1993, dropping to 22.3 per cent in 2003/2004 before declining to the current 16.4 per cent. In the east, where it was 58.8 per cent in 1992/193, it dropped to 46 per cent in 2002/2003 and now stands at 35.9 per cent.

For the west, the poverty level has reduced significantly, from 52.7 per cent in 1992/93 to the current 20.5 per cent, by contrast with the north, where the poverty level still stands at 60.7 per cent down from 73.5 per cent in the 1992/93 survey.

Breaking up the regions into rural/urban areas, it is obvious that the observed drop at regional level was driven mainly by rural areas, except for the northern region.

Regionally, the decline in poverty was steeper in western region followed by eastern region. Uneven progress in poverty reduction across geographical locations remains, as demonstrated by uneven growth in incomes as measured by household consumption expenditure

Northern region poverty remains high and did not register significant declines as observed in other regions, though cost of reducing poverty via direct transfer declined significantly.

At the national level, income inequality dropped by 4.5 per cent. There was a significant drop in urban areas, by 10.6 per cent, although there were improvements in the distribution of income in urban areas relative to rural areas.

Regionally, a sharper drop was experienced in the central region followed by the northern region, but the income gap between regions widened. The report shows a narrowing gap between educational attainments, although the figure remains high

The UNHS 2005/06 survey covered 7,426 households, between the survey periods May 2005-April 2006. The household expenditure measured included consumption expenditure and non-consumption expenditure

Consumption expenditure such as expenses on food, beverages and tobacco, non-durables and frequently purchased services and semi-durable and durables were measured during this period. Non-consumption expenditures such as taxes and contribution to funerals was also measured.

However, the consumption aggr-egate (welfare measure) used in the poverty analysis report captures only consumption expenditures. Household consumption expenditure was used as a proxy for household income.

The report points that at national level, the share of food remained stable but increased in urban areas by two per cent over the period.

The share of education and health went up, with the share of health increasing faster in rural areas at 3 per cent compared with one per cent in urban areas. The share of education increased faster in urban areas, by 4 per cent compared with two per cent in rural areas.

Expenditure on rent, fuel and energy decreased from 19 per cent in 2002/2003 to 16 per cent in 2006. Expenditure on household and personal goods also went down by 2 per cent, from 7 per cent in 2002/2003. There was no significant change in expenditure on transport and communication.

The UBS report explains that the decline in the poverty level could have been due to the increase in the share of education and health, which has been increasing since 2004.

In absolute terms, private spending on education and health more than doubled, while education expenses increased for all expenditure groups.

The country's poverty level is expected to fall to 26 per cent, provided that economic growth is sustained, there is redistribution to allow economic growth to benefit the poor, corruption is curbed and fertility rates drop.