2.8.2: Measurement of poverty
According to (Mel come Gills 1987;78), the measurement of the
amount of poverty existing in the country usually begins with the drawing of a
poverty line( a line separating the poor from non poor) ideally this line
should be defined in terms of householders' income per capita. Householders
with income per capita below the poverty line are defined, as poor while those
with the incomes above the poverty line are not poor.
The simplest measure of the extent of poverty is the use of
the percentage of poor householders in total. Reduction of poverty would be
measured through a fall in the percentage of poor household in total and also
through increase in the absolute income of the poor PRSP point out three
essential indicators that are used to measure poverty reduction;
At macro level, the first indicator measures resources
allocation for a particular activity and thus refers percentage of funding for
instance to social sector, particularly to the primary health and education.
This may be represented as a percentage of GDP / GNP. These indicators
essentially measure aggregate levels of inputs, usually expressed in monetary
terms.
The second kind of economic indicator is the use of micro that
measures actual outcomes, such as changes in households' income, mortality, and
mobility, literacy and school enrolment rates.
The third indicator is a use of
indicator to determine «perceptions and attitudes» both by the poor
and non-poor.
2.8.3: Poverty in Rwanda
Rwanda is a landlocked country
located in central Africa region. Uganda boards it to north, RDC to west,
Tanzania to the East and Burundi to south. It covers a land area of 26338 Sq.
km majority of which is mountainous and that is why it is called a country of a
thousand hills. Rwandan population has an estimated of 12 million people and
estimated 60% living under poverty line.
The country is largely dominated by agriculture as the main
employer with 86.6% compared to 90% in the previous years. Agriculture is most
dominant in rural areas and is the main contributor of GDP of 6% which is
expected to be 8.9% by 2020, and the country is among the bottom of the list of
very poor countries of the world.
Poverty situation in Rwanda has been of persistent nature for
quite a long time and this, Rwanda has grouped among world's poorest by the
world's development report and Rwanda's GDP per capital was estimated at US
dollar 290 (World Bank:1998) compared to 250 US dollar in 2006.
Rwanda`s poverty is the outcome of both economic and
historical factors. First the economic factor reflects a chronic failure to
productivity increase in a context of large and growing population. This
failure becomes increasingly evident in 1980's and early 1990's leading to
several structural problems.
Second, the genocide of 1994 left a horrid legacy further
impoverishing the country and leaving a number of specific problems and
challenges.
2.8.3.1: Structural features
Economy of Rwanda had experienced high population growth and
economic transformation has lagged behind. Although agricultural production per
capita and crop yields were declining steadily since the mid 1980's, economic
policy did not enough to encourage agriculture transformation. The country
suffered massive terms of trade shock when international coffee prices fell. As
result, per capita income fell sharply during the 1980's and early 1990's
(MINECOFIN, 2002;8).
Rwanda now faces the following micro economic problems
structural problems: low agriculture production, which was aggravated by the
failure of past agriculture policies, low human resources development,
especially in literacy and skills development ,limited employment
opportunities, with an oversupply of unskilled workers in comparison to their
low demand, high population growth and density, high transport costs, etc.
The failure to address those problems has contributed to an
economy characterized:
Low measured private investment at only 8% of GDP in 1999. Net
small holder investment in
Narrow revenue base averaging 8.7% of GDP in the period
1995-1997, compared to an average of 17.7% of GDP in sub-Saharan Africa.
Average weak export base of US Dollar 16 per capita compared
to an average of US dollar 100 in sub-Saharan Africa, with heavy dependence on
the export of agricultural products, particularly coffee and tea.
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