Income inequality rising in Uganda - report

PIC: A woman transports cassava using a bicycle in rural Uganda. (File)

INCOME

Although poverty levels have been falling, Uganda is now ranked 17th among the countries with the highest level of income inequality in Africa, in a report published by the United Nations Economic Commission for Africa (UNECA).

The report titled 'Urbanization and industrialization for Africa's transformation' points out that Uganda's gini coefficient for income inequality is at 0.45.

Uganda's situation is worse than Tanzania (0.36), and Burundi (0.33), but better than Kenya (0.48) and Rwanda (0.51).

The report notes that income inequality has risen due to an absence of programs to bolster incomes of the poor and the absolute poor while the rich continue to break further away, amassing more wealth from their investments.

Dr. Abdalla Hamdok, the UNECA executive director, points out in the report that countries should create policies that favor industrialization as a means of bolstering incomes and utilizing the recent surge in urbanization.

"History and experience show that urbanization and industrialization are closely associated in a mutually beneficial manner—but not in Africa.

"African countries must leverage the force of urbanization to drive and enable industrial development, re-establishing the link between urban growth and industrial growth," he says.

Hamdok adds: "Evidence suggests that rising and shifting urban demand is being increasingly met by imports, resulting in lost opportunities for domestic manufacturing."     

According to the report, Africa's long-term fundamentals remain strong as the pace of growth stands to benefit from a demographic dividend and an industrialization and structural transformation agenda.

But Hamdok points out that the African continent's prospects will be profoundly shaped by the way the rapid urban transition is managed.

"The region is the fastest urbanizing region after Asia, and will be predominantly urban in less than 20 years. Urbanization is thus a defining trend for Africa."