Despite numerous government and non-governmental efforts to promote economic growth, reform, and poverty alleviation, income inequality and poverty remain prevalent in Uganda.
The African Development Bank (AfDB) produced the African Economic Outlook 2023 and discovered that the East African community had relatively higher Gini coefficients than other African areas, mirroring the continent’s serious income inequality and poverty.
The Gini coefficient, also known as the Gini index or Gini ratio, is the most frequently used indicator of income inequality. A higher Gini coefficient indicates a wider disparity between the richest and poorest citizens of a nation in terms of income.
The AfDB assessment also pointed out that Uganda has the third highest level of inequality in East Africa, trailing only South Sudan and Rwanda, with over 16.36 million out of about 45 million Ugandans being impoverished.
“In most East African countries… income is relatively concentrated in the hands of a few, while the majority struggle to meet basic needs such as food, energy, health care, housing, and education,” the report states.
According to Oxfam, a global confederation that focuses on the alleviation of poverty, the richest 10% of Uganda’s population receive 35.7% of national income, while the poorest 10% receive only 2.5% and the poorest 20% receive only 5.8%. Uganda’s national poverty line stands at US$0.88–US$1.04. Rural poverty rates are typically higher than urban poverty rates with a UNICEF report showing that 55% of rural households experience poverty against 23% of urban households.
Poverty is more prevalent in the northern and northeastern regions which experienced a civil war between the Ugandan government and various rebel groups, most notably the Lord’s Resistance Army for more than two decades from the mid-1980s to the late 2000s.
Widespread income inequality frequently exacerbates poverty, creating a difficult to break vicious cycle. Wealthy families have greater opportunities which reinforces the poverty cycle – the wealthiest become richer as the poor become poorer.
These two intertwined issues are not just buzzwords or statistical data points, they are real-life phenomena that impact the lives of millions in Uganda.
Why income inequality is still high in Uganda
So why have poverty and income inequality remained a persistent issue in this East African country despite the government implementing several policies and programs such as the Poverty Eradication Action Plan launched in 1997, the Social Assistance Grants for Empowerment program launched in 2010, the National Development Plan, and the Operation Wealth Creation, among others?
According to Makerere University Professor John Ddumba-Ssentamu’s article, “Uganda’s inequality has been exacerbated by uneven land distribution and the complex land tenure system.” Furthermore, “differences in access to education, disparities in employment opportunities, urbanization, and generational poverty” are hurdles to equitable access and resource distribution.
Other factors such as corruption and weak governance are significant factors that contribute to income inequality in Uganda, according to analysts.
Political analyst Paul Maina says:
“Uganda loses over Shs 10 Trillion (USD 2,643,018,000) to corruption annually. Corruption undermines public trust, diverts resources away from essential services, and perpetuates a culture of inequality. It hampers the effective implementation of social welfare programs and reduces access to public services for the poor.”
He noted that weak governance, including the inadequate enforcement of laws and regulations, allows for the concentration of wealth and power in the hands of a few, while the majority of the population struggles to access basic services and opportunities. Addressing corruption and strengthening governance systems are crucial steps to reducing income inequality in Uganda.
The lack of inclusive economic policies and opportunities, according to Maina, also contributes to income inequality in Uganda. The country’s economic growth (6.3% in 2022 compared to 5.6% in 2021) has largely been driven by sectors such as agriculture and natural resources which have limited employment opportunities and tend to benefit a small segment of the population. Additionally, the informal sector, which employs a significant portion of the population, often lacks job security, social protection, and fair wages. The absence of policies that promote inclusive growth and create opportunities for all segments of society hinders efforts to reduce income inequality.
What is being done to reduce income inequality?
Uganda has a strategy in place to achieve Sustainable Development Goal 10 of eradicating inequality. Uganda’s Vision 2040 policy prioritizes “balanced development by ensuring that all regions of the country benefit from national economic growth.” Uganda’s second report to the High-Level Political Forum, the 2020 Voluntary National Review, outlines the country’s progress in fulfilling the SDGs through frameworks and initiatives. In the report, the Government of Uganda expresses a desire to implement policies that “support social protection” and to invest in “regional development to accelerate equitable, regional economic growth and development.”
