Tuesday, February 24, 2015

Rwanda -the Social Inequality Persists

Whilst the Economist in 2011 ranked Rwanda 10th on the world’s fastest growing economies list in the world, the African Development Bank (AfDB) ranked Rwanda 3rd smallest middle class economy among 44 African countries surveyed.

The AfDB reported that only 2.6% of the Rwandan population is categorised as stable middle class with the capacity to spend between US$4 – US$20 per day. Considering its high record of economic growth over the last two decades, one would have expected that Rwanda has developed a burgeoning middle class. This has not been the case. Indeed only 82% of the country’s population continues to live on less than US$ 2 per day. Moreover, the seemingly poverty reduction achieved in Rwanda is based on the country’s poverty line not on the international poverty threshold of US$1.25 per day. Had the former been used to measure poverty level in Rwanda, 63% of the country’s population would still be counted as living well below the poverty line in contrast to the official and widely reported figure of poverty level of 44.9%.

Not only is the average household income very low, but it is also unequally distributed in Rwanda. A recent joint report by The United Nations Economic Commission for Africa (UNECA) and African Union (AU), revealed that inequality undermines effort to reduce poverty in Africa. The poorest 20% of the population often accounts for less than 10% of total income while the richest 10% controls from quarter to half of it or more in Africa.
The report mentions Rwanda among the few African countries where the richest 10% earn more than 40% of total income and the poorest 10% earn between 3 and 5%.
Rwanda’s Gini index1 level is 0.49 and remains the highest among the East African Community2 (EAC) member states.
The Human Development level of Rwanda is affected by low and unequal distributed income household in the country. This is because the level of household income determines the living standard of that household. A 2014 UNDP report shows that although Rwanda’s overall human development index (HDI) is increasing, the country loses 33.2% of its HDI due to inequality in life expectancy, education and income.

Unequal distribution of land among households across the country is a significant cause of the low and unequal average household income in Rwanda. The majority of Rwandans who live in rural areas earn their income through selling their harvest from their cultivated land or through working as labourers on the land. However, there is an increasing inequality in land distribution in Rwanda according to a study in 2011 which found that more than a quarter of agricultural households cultivated less than 0.2 hectare in 2006. This happened despite the existence of land holdings of hundreds or even thousands of hectares in Rwanda. Interestingly, most of these lands are held by government and military representatives, other members of the urban elite and foreign investors. Land is increasingly becoming a precious asset in Rwanda. Persistent scarcity and unequal distribution of land make it a contentious asset in the country.

The increasing inequality of land distribution is intertwined with land rights inequality among households across the country. A study of land rights inequalities in Rwanda of 2011 revealed that households headed by women (35 % of all households in Rwanda are headed by women) or young persons, households who have been displaced due to conflict or people who resettled in village settlements referred to as “imidugudu” have weaker land rights. Therefore, it is not surprising that stakeholders with more influence and resources exploit inequalities in land rights and acquire lands from the vulnerable and the poor. Such land transfers from the majority that are vulnerable and poor towards the few that are rich works to the detriment of Rwanda’s economic and human development. This is so because it expands income inequalities within the country.

Young people who have not access to quality education and gained relevant qualifications will be left behind and they are the majority. With noted low and unequal household income, only few can afford private schooling in Rwanda or abroad which offer better quality education than the public schools available in the country. A global report by UNESCO published in 2012 reads in reference to Rwanda that “ it is not clear that ICT and other services, which tend not to create as many jobs as other types of industry, can help children of poor parents escape from poverty…”


1 comment:

Janet Surman said...
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