Combating chronic poverty in Uganda: towards a new strategy

Using a panel of 3,572 households in the Northern Uganda Social Action Fund (NUSAF) region interviewed in 2004 and in 2008, the paper provides new evidence on chronic poverty in Uganda. While progress in reducing poverty rates has been impressive from 64.6 percent to 52.2 percent, the levels remain high with a significant number of persistently poor households. Four in every ten households are chronically poor of which 44.9 percent are living in extreme chronic poverty. About 37.8 percent of the households are living in transient poverty of which 67.4 percent escaped poverty during the panel period. The substantial movements out of poverty can perhaps be explained largely by the relative return of peace in the region that enabled households to engage in agricultural activities. While at the aggregate level chronic poverty is significantly more prevalent than transient poverty, a mixed picture is observed at disaggregated level. The picture at aggregate level mirrors itself in the sub-regions of West Nile and Karamoja; but the reverse is observed in Lango sub-region. Chronic poverty is as equally prevalent as transient poverty in Acholi and Teso sub-regions. Overall, chronic poverty is disproportionately high among the Karamajongs. This calls for different kinds of anti-poverty interventions and public support. The paper further demonstrates that the characteristics and determinants of chronic and transient poverty are not always the same. The chronically poor households suffer from multidimensional deprivation including low incomes, low human capital development, inadequate access to infrastructure (especially input markets, trunk roads etc), and inability to access non-agricultural employment. On the other hand, the findings have demonstrated that ensuring peace in this part of the country is necessary for sustainable poverty reduction. The key policy messages: first, the on-going anti-poverty interventions such the Peace, Recovery and Development Plan (PRDP) and NUSAF II, among others, need to be refocused and targeted to ensure that the dynamic nature of poverty in this part of the country is taken into account. This will go a long way in improving the effectiveness of these interventions. Second, agriculture, whose productivity is low, remains the main source of income and employment to the households especially the chronically poor households. With the return of peace in the region, addressing the low agricultural productivity is likely to play a key role in the fight against chronic poverty. On the other hand, creation of employment outside the agricultural sector should be supported. There should be a deliberate strategy for investment in the poorest through asset accumulation – e.g. livestock re-stocking programme. The paper makes a case that chronic poverty should be recognized as a distinct dimension of poverty in government’s strategy against poverty if Uganda is to achieve MDG 1 by 2015.