Poor getting poorer, rich getting richer – report

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KAMPALA- The gap between the rich and the poor has continued to widen at an alarming rate, the charity organisation Oxfam reported yesterday in its study on inequality in the country.

Oxfam is an international confederation of 18 NGOs working with partners in over 90 countries to end the injustices that cause poverty.

The Oxfam report shows the richest 10 per cent of Ugandans have had their income grow by an impressive 20 per cent per year. This has meant that these 10 per cent richest Ugandans now own 35.7 per cent of the country’s wealth, leaving the remaining 90 per cent of Ugandans to share the remaining 64.3 per cent of national income.

But this still does not complete the picture for the poorest Ugandans. The report further shows that the poorest Ugandans have seen their possessions decline by 21 per cent over the past 20 years.

As a result, the poorest 10 per cent of Ugandans own only 2.5 per cent of the country’s wealth, while the poorest 20 per cent of Ugandans own a meagre 5.8 per cent of national income.

This tragic economic state of Uganda’s poorest echoes the Biblical truism in Matthew 13:12, which says: “Whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them.”

The report, which was released at the Serena Kampala Hotel, is titled: “Who is growing? Ending inequality in Uganda”.

The report further shows that Uganda’s Gini Coefficient stood at 0.365 in 1992/93, in the year 1997/98, it increased to 0.347, and in 1999/2000, it rose to 0.395, in the year 2002/03, it shot up to 0.428, and in 2005/06 it stood at 0.408, while in 2009/100 it was 0.426 and in 2014/15 it was at 0.47.
Gini coefficient is a measure of income inequality in a society. It is measured from zero (0) to one (1), with zero (0) corresponding to perfect income equality (everyone has the same income) and one (1) corresponds to perfect income inequality (one person has all the income, while everyone else has zero income).
In economic terms, a lower Gini coefficient tends to indicate a higher level of social and economic equality. For Uganda’s case, this clearly shows that income inequality is trending upwards.

A rising gini coefficient implies that though Uganda’s economy has been growing at a higher rate, the gap between the rich and the poor has been widening over the years.

Oxfam cites specific drivers of inequality in Uganda as meagre investments in health, education, and agriculture and blotted administrative costs of 15 per cent of total budget amid lack of critical services.

The report points out a grim statistic, showing that one doctor in Uganda serves 24,725 people. The World Health Organisation recommended doctor-to-patient ratio is one doctor for every 1,000 people.
The other factor fuelling inequality is widespread reports of displacement of poor households by infrastructure projects.
The report shows that whereas the level of poverty has been declining over the years, income inequality has been worsening. Absolute poverty stood at 56 per cent in 1992, and reduced to 31 per cent in 1999 and by 2014, it was reported at 19.7 per cent of the total population.

Regional inequality
The Oxfam report shows that despite the decline in the national poverty at the national level, regional distribution of poverty reduction was mixed.
“The people of northern Uganda are eight times poorer than those in central Uganda and five times poorer than those in western Uganda,” says the Oxfam report.

The poverty level in the north stood at 72.2 per cent in 1992/93, 60.9 per cent in 1997/98, 63.7 per cent in 1999/2000, 63.6 per cent in 2002/03, and in the year 2012/13 it stood at 47 per cent. In the same period, the Eastern region registered a poverty level of 58.8 per cent, 54.3 per cent, 35.0 percent, 46.0 percent and 37 percent over the same periods.

The western region poverty level trends over the same period stood at 53.1 percent, 43.8 per cent, 26.2 per cent, 31.4 per cent, and 10 per cent, while the numbers for Central Uganda were recorded at 45.6 per cent 27.9 per cent, 19.7 per cent, 22.3 per cent, and 6 per cent.

The report further states that the Structural Adjustments (SAPs) and liberal economic policies did not create the anticipated jobs for the country.
From the gender perspective, the report shows that 50 per cent of the women are engaged in three lowest paying sectors (agriculture, domestic care, mining and quarrying).

“Women do most of unpaid care work (five hours compared to one hour for men),” the report says.
It also reveals that there is high youth unemployment of 83 per cent and that there are growth discrepancies in remuneration across various government ministries, departments and agencies.

Ms Irene Ovonji Odida, the executive director the women lawyers’ association FIDA, said: “We are faced with a worrying trend; the increasing income inequality and the consequences it has for our societies and for our economies.”

“Tackling inequality is a political imperative for the government if we are to move to the middle income economy, there is great need for social fairness and economic efficiency. Inequality hampers growth and undermines social cohesion by curbing opportunities, for the lower but also the middle income class,” she said.

More findings
The findings released yesterday are that over the 12-year-period between 1999 and 2011, the incomes of those of the richest Ugandans increased nearly three times as quickly as the incomes for those at the bottom of the income ladder did. In real terms, the rich Ugandan’s incomes increased by 8 percent per year while the incomes of the poor rose by a paltry 3 percent per year.

This inevitably resulted in a more unequal Uganda as the figures for the gini coefficient released yesterday indicate.

Gini coefficient is the measure for inequality in a society. It ranges from zero to one, with zero indicating a situation of perfect equality (where all people have equal income) and one indicating a situation of perfect inequality (where all the income is concentrated in the hands one person and the rest earn zero income).

The higher the gini coefficient the higher the inequality.

The Oxfam report shows that Uganda is more unequal than it has ever been since the Financial Year 1992/93. In that year, the gini coefficient was 0.365, but it stood at 0.47 by Financial Year 2014/15.
Going by the latest figures, Uganda remains the third most unequal society in the East African Community.

Rwanda is the most unequal with the gini coefficient of 0.508 percent, followed by Kenya with a gini coefficient of 0.477, according to 2013 figures.

Burundi is the most equal society in the East African Community with a gini coefficient of 0.333 percent, followed by Tanzania (37.6 per cent). Sweden was as of 2013, the most equal society in the world with a gini coefficient of 0.25 per cent, followed by Norway (25.8 per cent).

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