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Prosperity for all alone cannot eradicate poverty

By Vision Reporter

Added 5th November 2009 03:00 AM

POVERTY is more than just lack of incomes. It is also the failure to satisfy basic social needs, failure to break out of the cycle of poverty and insecurity of a person and property.

POVERTY is more than just lack of incomes. It is also the failure to satisfy basic social needs, failure to break out of the cycle of poverty and insecurity of a person and property.

By Patrick Mugisa

POVERTY is more than just lack of incomes. It is also the failure to satisfy basic social needs, failure to break out of the cycle of poverty and insecurity of a person and property.

Bonna Bagaggawale is a Government vision to improve the lives of all Ugandans in all aspects.
The most important pillar of Bonna Bagaggawal is improving incomes of the poor people and transforming their lives on a sustainable basis.

The Government is mainly promoting Bonna Bagaggawale through savings and credit cooperative organisations by encouraging formation of groups to access financing.

The above concept is aimed at reversing the conventional banking system by removing bottlenecks like collateral. Members are accountable to each other when it comes to paying back the loans. In case of default, loss or any liability, members are jointly liable.
There are many other mechanisms the Government can use to complement the prosperity-for-all concept.

In Japan, they have a concept referred to as ‘one village one product model.’ It was first applied in Japan’s Oita prefecture in 1979. It focused on regional development, each region specialised in farming a particular product.
The average per capital income of rural Oita was $12,000 (sh24m) in 1979 when the programme began and rose to $22,800 (sh44m) by 2003.

In the same way, the Government should refocus the utilisation of the existing resources towards supporting rural development by implementing the ‘one village one product model’. This will encourage efficiency, market competitiveness, lower the cost of production, promote quality products and collective marketing.

The cost of borrowing is very prohibitive for the poor people. Interest rates by commercial banks range between 16% to 27% per annum, coupled with unrealistic auxiliary costs like commitment, mortgages registration, arrangement and legal fees.

The banks’ main motives are to make super normal profits and to maximise shareholders value.
However, some banks are high street money lenders by another name due to their hidden, unexplained costs of loans.

The Government should make sure finances are made available to the poor on appropriate terms. People need low cost of capital if poverty is to be eradicated.
The main productive asset for the rural people is land. However, most of this land lacks title deeds.

Unlike urban people who have title deeds and own valuable household commodities which they can use as collateral for securing loans, rural people lack such. The Government should decentralise offices for the registration of land titles.

In addition, the Government should put in place poverty reduction policies like:
  • Peace building and conflict resolution

  • Improving the effectiveness of basic service delivery in public and non-profit sectors.

  • Developing market networks and related infrastructure.

  • Curb corruption especially in local governments.

  • Make trade fair. Remove obscene agricultural protectionism of rich countries.

  • Government should offer subsidies to rural farmers in form of farm implements, fertilisers and pesticides.

  • Civil society organisations should be facilitated to sensitise rural people on propserous ways of living.


  • Lastly, the Government should ensure political and economic stability which will ensure pro-poor broad-based economic growth.

    The writer is a business consultant

    Prosperity for all alone cannot eradicate poverty

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