News and Views

One million more Ugandans out of poverty

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By David Mugabe

About one million Ugandans (6.6%) moved out of the absolute poverty bracket (living beyond $1.25 a day) between 2006 and 2010 as a result of the diversified economic activities, a new report indicates.

The Poverty Status Report produced by the Ministry of Finance indicates that Ugandans living below the poverty line fell to 24.5% (7.5 million) in 2009/2010 from 31.1% (8.5 million) in 2005/06.

Rather than constantly struggling to meet their most basic needs, many more Ugandans are now striving for new opportunities to improve their lives, reads the report launched by the finance minister Maria Kiwanuka.

Higher pay, ability to cope with risks because of increased asset base and better access to savings instruments are some of the reasons for the decline in absolute poverty.

Chairing the panel discussions during the report launch, Keith Muhakanizi, deputy secretary to the treasury acknowledged the decline in the quality of some of the key indicators driving the poverty growth.

Muhakanizi however said the country is better off having these programmes and addressing the quality concerns than not having them at all.

He sighted universal primary education (UPE) in which the completion rate to primary seven is at 57%, meaning kids are jumping out of school.

Muhakanizi said no doubt there are challenges with quality of education, but we are better off with the schools enrolment.

The report pointed out that central, eastern and western region surpassed the first MDG of halving the proportion of people living in poverty.

(But) Central is dominated by the middle class, the east and west by the insecure, the north by the poor, read the report.

Agriculture remains the mainstay of the economy employing about 75%, but majority of the people in the sector are poor.

Also key in the report is that the number of middle class Ugandans has risen from 7.8 million (28.7%) to 10 million (32.6 %.)

Despite the impressive jump in livelihood quality, the number of people still vulnerable and insecure with the possibility of sliding back to poverty has risen from 11% in the same period to 13.2%.

Many Ugandans have moved out of poverty but have not moved to middle class, the size of this insecure group has more than doubled since the early 1990s, read the report.

The research team has recommended that rural domestic granaries and commercial warehouses be deepened as a way of stabilizing prices.

Finance Minister Kiwanuka said electricity accounts for 73% of maize milling costs and rural electrification are crucial for agro-processing and value addition.

Dr Albert Musisi, acting commissioner, finance ministry also called for investment in market information that can spur the insurance sector to develop products for agriculture.

“Intervention through SACCOs was a good approach but what is important is encouraging savings,” said Musisi.

Andrew Rugasira of Good African Coffee called for deeper consideration for agriculture as it has the highest capacity to transform the lives of people.

Rugasira sighted the deliberate action in Malawi in 2005 when there was a net food deficit. But a spirited investments and focus in the sector led to a 53% food surplus in 2007.

“The challenge is, it is undercapitalized to get the engine of production growing,” asserted  Rugasira.

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