Overview of Poverty in Uganda

In the Poverty blog post it was found that poverty is a multidimensional problem that has many effects throughout the lifetime. This blog post will give an introduction to Poverty in Uganda.

The Uganda Poverty Assessment Report 2016 outlines Uganda's progress in the past 20 years at reducing poverty. It says that Uganda is the 9th most successful country in Africa at reducing poverty. In the past 2 decades Uganda has been particularly successful at reducing poverty. The report goes on to explain how extreme poverty is defined:

The poverty line was set in 1998 using 1993 data by estimating the amount of expenditure needed to satisfy the minimum daily calorie requirements and basic non-food needs. Appleton et al. (1999) identified the 28 commonly consumed food items and the corresponding amount consumed to meet 3,000 calories per adult equivalent. Calorie requirement varies by age and gender, and hence the 3,000 calories is per adult equivalence. Based on the population structure then, the average per capita calorie need was 2,283 calories.
The minimum expenditure on basic non-food needs was estimated using the classic approach of Ravallion and Bidani (1994) by identifying the non-food expenditure of households that are just on the food poverty line. The justification for using these households’ non-food expenditure as a reference is that the poor have sacrificed some of their need for calories to buy the non-food items. Therefore, these non-food expenditures should also be regarded as meeting essential needs. The non-food expenditure was allowed to vary by region and rural/urban areas to account for spatial differences prices (Appleton et al. 1999).
The poverty line is the sum of expenditure on basic food and non-food items. Since 1993, the CPI (consumer price index) has been used to update this poverty line.

The Poverty line is currently set at US$1.90 per person per day. The poverty line is said to have purchasing power parity (PPP). This value was set on 30 September 2015 (see World Bank: FAQs: Global Poverty Line Update), it is based on 2011 exchange rates. This means that US$1.90 will buy the same amount of food in Uganda as say America based on the exchange rate in 2011. US$1.90 is the equivalent of 4794 Ugandan shillings (see World Bank: Official exchange rate). This figure means it is possible to compare all the countries of the world on an equal basis.

The Uganda Poverty Assessment Report 2016 opens optimistically, detailing Uganda's successful history of poverty reduction.

Uganda’s progress in reducing poverty over the last two decades is a remarkable story of success. From 1993 to 2006, annual reduction in the national poverty rate of 1.9 percentage points a year resulted from the restoration of peace and stability to much of the country after Yoweri Museveni came into power, the series of economic liberalization reforms that were implemented, and the investments of households and firms that these encouraged.

The success in poverty reduction is not without controversy:

However, Uganda’s success is not without caveats. In 2013, more than a third of its citizens lived below the international extreme poverty line of US$1.90 a day. What’s more, the low national poverty rate of 19.7 percent is based on a poverty line that was set over twenty years ago and is now too low, and not reflective of a reality in which too many Ugandans live today. Vulnerability has also remained high. For every three Ugandans that moved out of poverty, two fell into poverty. Poverty has also become increasingly concentrated in the Northern and Eastern regions of the country.

The report argues, in chapter 2, that poverty is multidimensional (this has been shown in Poverty). As a consequence monetary indicators alone cannot be relied upon to show poverty. It is necessary to look at housing; infrastructure like drinking water supply, sanitation and electricity; mobile phones, bicycle ownership and education; as well as health and nutrition. All these areas need to be investigated in greater detail.

Chapter 3 looks at the factors that have lead to successful poverty reduction from 2006-2013. Agriculture, migration to cities and small gains in education have had important benefits on reducing poverty. Chapter 4 looks in more detail at agriculture:

Agricultural incomes grew because the government got some key fundamentals right that provided the incentives to invest in agriculture. Luck was also on Uganda’s side: good weather benefited many households and positive price trends in international and regional markets aided real crop price increases.

It should not be overlooked that Uganda is vulnerable to fluctuations in climate because it is dependent on good weather.

Chapter 5 looks in detail at growth out of poverty in urban areas. Chapter 5 discussed how:

Uganda has experienced high growth in industry and services when compared to the regional average. However, high growth in value-addition in industry and services has not been accompanied by a higher share of the workforce being employed in these sectors, limiting the degree to which these sectors contributed to poverty reduction. The growth in these sectors did not result in job creation faster than population growth. The net changes in the percentages of the bottom 40 percent of households, which engage in both non-agricultural wage employment and self-employment, are negative, because more households in the bottom 40 percent exited non-agricultural wage employment and self employment than went into non-agricultural wage employment and self-employment. 

Research was done on what hindered and what improved poverty reduction:

Those that were able to increase their self employment and wage income were more likely to live in households that were headed by young, educated men with better access to finance. Results of impact evaluations suggest that poor women can benefit from cash grants and business training, as they are the most financially constrained. Randomized controlled trials provide a clear indication of the types of interventions that work; however, they are often implemented on a small scale. It is not clear whether these interventions will also work at scale for growing self-employment and encouraging income diversification among the poor. More empirical evidence is needed on programs implemented at scale.

Chapter 6 looked at how migration within Uganda affects poverty and chapter 7 explored regional differences throughout Uganda. The regional differences are highlighted in the article below.

The teacher to pupil level is one teacher to 136 in northern Uganda, 90.5 in eastern Uganda, 47 in central region and 53 in western Uganda.

This newspaper article from September 2016 Poverty level in Uganda down by 11 percent summarizes the findings of the report. In particular it focuses on regional differences:

The World Bank poverty assessment report for 2006-2013 shows increasing poverty in Northern Uganda, despite increased international government public investments in the region.

In Summary

• In Northern Uganda, 64% of citizens were living blow poverty line in 2006 but currently 84% now live below poverty line on the National scale 
• The teacher to pupil level is one teacher to 136 in northern Uganda, 90.5 in eastern Uganda, 47 in central region and 53 in western Uganda 
• Only 35% of residents in Northern Uganda have mobile phones, 52% in eastern Uganda, 83%in central Uganda and 63% in Western Uganda. 

The World Bank poverty assessment report for 2006-2013 shows that the proportion of the Ugandan population living beneath the national poverty line declined from 31.1 percent in 2006 to 19.7 percent in 2013.
Similarly, the country was one of the fastest in Sub-Saharan Africa to reduce the share of its population living on $1.90 PPP per day or less, from 53.2 percent in 2006 to 34.6 percent in 2013.
However, there has been increased poverty in Northern Uganda, despite increased international government public investments in the region.
The report reveals that regional inequality persists and appears to be on the rise.
"Progress was slower in the country's north and eastern regions which have least well-off, and marginalised population," the report reads.
In relation to Northern Uganda, 64% of citizens were living blow poverty line in 2006 but currently 84% now live below poverty line on the National scale.
The report further shows that in education, the teacher to pupil level is one teacher to 136 in northern Uganda, 90.5 in eastern Uganda, 47 in central region and 53 in western Uganda.
In social sector, only 35% of residents in Northern Uganda have mobile phones, 52% in eastern Uganda, 83%in central Uganda and 63% in Western Uganda.
The report continues: "poverty incidences are also higher in north at 43.7 per cent and the east is at 24.5 per cent compared to the central region which is 4.7 per cent and west at 8.7 per cent."
While launching the report the World Bank country director Christina Malmbrerg Calvo said that the report envisages inequitable development which must be addressed.
"Increasing investment in agriculture will help the country to achieve middle income status, there is also need to reduce income poverty gap through fiscal policy programmes."
In response, the minister for planning David Bahati said that government is aware of the imbalance but this was caused by insecurity in these areas for over two decades.
Poverty in Uganda is not a simple issue. When combining poverty with disability the issues will be even more complex. This report serves to highlight the complexity of the issues faced by Uganda. In the coming weeks these will be explored in more detail.

This overview reveals the complexity of poverty in Uganda. That poverty affects someone throughout their lifetime and that poverty also feeds back on itself compounds an already complex problem. Combine this with the strong link between poverty and disability (see Poverty and Disability In Uganda), and the issue of poverty in Uganda is of great importance. In future blogs I will discuss poverty and disability in Uganda.