Covid-19 pushes 2.4 million Ugandans into poverty – Oxfam

Personnel of Local Defence Unit (LDU), a paramilitary force composed of civilians hands a bag of flour to a woman as part of the government's food distribution effort to people who had been affected by the lockdown in Kampala in April 2020.

What you need to know:

  • Uganda registered its first Covid-19 case in March 2020. In a bid to curb the spread of the virus, the government instituted a nationwide lockdown. In May 2020, government started easing the lockdown.
  • Debt servicing is another growing pressure on government budgets including Uganda. Uganda’s external debt stock as a percentage of GDP is above 40 percent. 

At least 2.4 million people in Uganda have been pushed into poverty due to the Covid-19 pandemic and the associated measures to contain it, according to an Oxfam report that, among others, looks at Covid-19’s impact on growth, poverty and inequality. 

In the Democratic Republic of Congo (DR Congo), it has pushed 11 million people into poverty as well as six million in Tanzania. 
A July 2020 UN report found that at least 1.9 million people are likely to fall into poverty as a result of the first eight weeks of the lockdown alone. The report analysed the socioeconomic impact of the lockdown measures imposed to control transmission of Covid-19 in the country.

The Oxfam report titled “The Inequality Crisis in East Africa: Fighting Austerity and the Pandemic” , which was released yesterday, places Uganda among the world’s 40 most unequal countries. Together with South Sudan and Rwanda, Uganda leads the pack in East Africa of the countries with the highest level of inequality. 
The report offers a grim picture for Uganda and her neighbours in the region given that some past findings had shown Uganda was progressing in lifting its people out of poverty. 

A 2019 study by the World Bank found that from 2006 to 2013, the percentage of people living on less than $1.9 a day had fallen from 53.2 percent to 34.6 percent. The progress was mainly attributed to growing incomes from agriculture.
The 2019/2020 National Household Survey report by the Uganda Bureau of Statistics (Ubos) shows that at least 300,000 more Ugandans slid back to poverty. This was mainly attributed to the Covid-19 pandemic. The report showed that some people stay in poverty over an extended period while others move into and out of poverty over time.

The government has over time come up with poverty alleviation programmes which have produced mixed results. 
In 1996, Uganda came up with the Poverty Eradication Action Plan followed by a series of other programmes such as Emyooga, Entandikwa, and Plan for Modernisation of Agriculture, Operation Wealth Creation (OWC), and the Youth Livelihood Programme, among others. All have been riddled with cases of corruption, among other issues. 
The Oxfam report also looks at the responses of governments, their creditors and international lenders and financiers such as the International Monetary Fund (IMF) and the World Bank.

“Income is also increasingly concentrating in the hands of a tiny few, even as a majority are struggling to meet their most basic needs, such as education, healthcare and decent jobs. The richest 10 percent receive an average of 47 percent of pre-tax national income across the region,” the report reads in part. 
It adds: “For the richest one percent, their average share of income across the region is 15.7 percent, 2.5 percentage points more than the poorest 50 percent of citizens earn. In Rwanda, the richest one percent of the population earns 20 percent of national income, nearly double the share held by the bottom 50 percent.”
 
East African countries have significant wage inequality: five countries including Uganda, DR Congo, Burundi, South Sudan, and Ethiopia have Gini coefficients (measure of income distribution across a population) above 0.7 putting them in the world’s worst 20 countries. All East African countries are in the bottom half of global scores, according to the Oxfam report. 
These very high wage Gini coefficients reflect two main factors, the poor enforcement of policies on women’s rights and minimum wages; and the low wages earned by those in vulnerable or informal employment. They thus reflect that largely unregulated labour markets are producing extreme levels of inequality. 

It will be very difficult for governments to reduce such high levels of market-produced inequality to levels that do not have a negative impact on Gross Domestic Product (GDP) by using spending and tax measures alone, the authors say. This emphasises the need for stronger labour rights policies and their enforcement in East African countries.
Uganda performs well when it comes to labour rights policies and laws, with the country having high-quality laws but the country is marked down for not including marital rape in its anti-rape laws.  Uganda together with Burundi and Rwanda also does very poorly when it comes to the lowest minimum wages which have not been updated in decades.

“Fewer than half of workers in all East African countries are covered by formal labour protections. In all but Kenya and Rwanda, fewer than a quarter are covered. This seriously undermines the realisation of labour rights as a result of the very high levels of informal and vulnerable labour (and in South Sudan and Uganda, also by high unemployment),” the Oxfam report states.
Debt servicing is another growing pressure on government budgets including Uganda. Uganda’s external debt stock as a percentage of GDP is above 40 percent. 
Covid-19 in Uganda
Uganda registered its first Covid-19 case in March 2020. In a bid to curb the spread of the virus, the government instituted a nationwide lockdown. In May 2020, government started easing the lockdown.
However, in June 2021, government reinstated the total lockdown following an increase in the number of Covid-19 cases. On January 24, government fully reopened the economy.
As of February 7, Uganda had registered 162,443 Covid-19 cases, 3,565 deaths and 99,487 recoveries.


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