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…”
http://www.jambonews.net/en/news/20150223-rwanda-looking-beyond-the-economic-growth-numbers-part-one/
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