Rural Livelihoods and Poverty Reduction Strategies in Four African Countries

Abstract

This paper compares and contrasts rural livelihoods in Uganda, Kenya, Tanzania and Malawi, with a view to informing rural poverty reduction policies within Poverty Reduction Strategy Plans (PRSPs). Low household incomes in rural areas of all countries are associated with low land and livestock holdings, high reliance on food crop agriculture, and low monetisation of the rural economy. These adverse factors are in some instances made more difficult by land sub-division at inheritance, declining civil security in rural areas, deteriorating access to proper agronomic advice and inputs, and predatory taxation by decentralised district councils. Better off households are distinguished by virtuous spirals of accumulation typically involving diverse livestock ownership, engagement in non-farm self-employment, and diversity of on-farm and non-farm income sources. Lessons for PRSPs centre on the creation of a facilitating, rather than blocking, public sector environment for the multiplication of non-farm enterprises; seeking creative solutions to the spread of technical advice to farmers; and examining critically the necessity for, and impact of, tax revenue collection by district councils on rural incomes and enterprise.

Notes

Frank Ellis, Overseas Development Group (ODG), University of East Anglia, Norwich NR4 7TJ. E-mail: [email protected]. H. Ade Freeman, ICRISAT, United Nations Avenue, Nairobi, Kenya. E-mail: [email protected]. This revised paper owes much to the perceptive comments of two anonymous referees and the authors are grateful for their input. The authors would also like to thank John Mims for his role in managing the livelihoods data set and preparing the data tables.

The research programme is entitled LADDER, standing for Livelihoods and Diversification Directions Explored by Research, an acronym devised to evoke the notion of ‘climbing out of poverty’. The programme is funded principally by the Policy Research Programme of the UK Department for International Development (DFID), with a contribution to work in Kenya made by the United Nations Development Program (UNDP). The findings and views expressed here are solely the responsibility of the authors and are not attributable to DFID or UNDP. This cross-country overview draws on and synthesises material published in individual country papers [ Ellis and Bahiigwa, 2003 ; Ellis and Mdoe, 2003 ; Ellis, Kutengule and Nyasulu, 2003 ; Freeman, Ellis and Allison, 2004 ].

The sustainable livelihoods framework can be represented in a variety of ways, but typically comprises the interacting components of assets, activities, vulnerability context, institutional context, and outcomes [ Carney, 1998 ; Scoones, 1998 ; Ellis, 2000 : Ch.1].

The World Bank defines PRSPs as follows: ‘Poverty Reduction Strategy Papers (PRSP) describe a country's macroeconomic, structural and social policies and programs to promote growth and reduce poverty, as well as associated external financing needs. PRSPs are prepared by governments through a participatory process involving civil society and development partners, including the World Bank and the International Monetary Fund’. This as well as other details of the PRSP approach can be found on the World Bank website at: http://www.worldbank.org/ poverty/strategies.

See Norton and Foster [ 2000 ] for a useful discussion of the links between livelihoods approaches and PRSPs.

The similarities in rural livelihood circumstances found across these four countries as detailed later in this paper is in itself an interesting finding of the research, given their disparate political and economic strategy histories post-independence.

The independence dates of the four countries were Tanzania [1961], Uganda [1962], Kenya [1963], Malawi [1964].

The original East African Community lasted from 1967 to 1977, but with decreasing effectiveness through that period. The Community was re-established by the heads of state of the three countries in November 1999.

A national referendum was held in Uganda in 2000 to determine whether to move to multi-party politics, and this option was rejected by the majority of voters.

These are brief generalisations, and there exists, of course, an enormous literature on the post-independence politics and economics of each of these four countries.

For perceptive accounts of politics and the state in post-colonial African countries see Sandbrook [ 1986 ; 2000 ]. See also Cross and Kutengule [ 2001 ]. The decline in real public sector salaries is detailed in Jamal and Weeks [ 1993 ].

The proportion of the population defined as rural is notoriously sensitive to the cut-off point at which larger settlements are treated as urban areas, so these inter-country differences may be somewhat artificial.

Available income distribution estimates are rather fragmentary, but Kenya had an estimated Gini coefficient of 0.445 in 1994 compared to Uganda (0.374 in 1996) and Tanzania (0.382 in 1993) [World Bank, 2002 c]. In one World Bank source Malawi is cited as exhibiting a Gini coefficient of 0.620 [ World Bank, 1998 ].

The first draft of Uganda's PEAP was published in 1997; Tanzania's National Poverty Eradication Strategy (NPES) in 1998 [ Tanzania, 1998 ]; Malawi's Poverty Action Plan (PAP) in 1997.

A useful account of PRSP background and processes is provided in Warnock [ 2002 ]. For the PRSPs of the four countries see Tanzania [ 2000 ], Uganda [2001], Malawi [ 2001 ], Kenya [ 2001 ].

Debt relief under HIPC has a number of sequential stages, involving, inter alia, endorsement of the PRSP by the IMF and World Bank (decision point) and evidence of one year's successful implementation before the agreed amount of debt is cancelled (completion point). Kenya has so far engaged minimally in the HIPC process in part due to having a per capita income that places it just above the ceiling range of the priority HIPC countries, but possibly more relevantly due to policy lapses as viewed by donors [see World Bank, 2000 b].

This section draws on similar descriptions contained in the separate country studies [ Ellis and Bahiigwa, 2003 ; Ellis and Mdoe, 2003 ; Ellis, Kutengule and Nyasulu, 2003 ; Freeman, Ellis and Allison, 2004 ].

This sequencing of asset accumulation mirrors the sequencing of asset disposal that occurs in crises such as famines, and can result in the deterioration of the asset position of families to the point that they are no longer able to construct a viable livelihood [ Corbett, 1988 ; Devereux, 1993 ].

The economic definition of the poverty line is the level of per capita consumption that just permits the individual to satisfy basic nutritional requirements expressed in calories, given the measured share of food in the per capita expenditure of the poor [see, for example, Lipton and Ravallion, 1995 ].

The longer term impact of these changes on rural incomes depends on factors that fell outside the scope of this research. These include world price trends of the traditional export commodities replaced by new cash crops, exchange rates, and the character of private trading systems that replaced former parastatal marketing bodies.

For this purpose, subsistence consumption of crops and livestock products is valued at the average farm gate prices cited in the completed household survey forms.

Net agricultural output refers to gross output (quantities produced multiplied by farm gate sales prices) minus purchased inputs into the production process, where hired labour is treated as a purchased input, but family labour is not costed in the calculation. The exchange rates prevailing at the time of the research in each country were (local currency per US$): Uganda (1772.5 Ushs), Kenya (78.93 Kshs), Tanzania (890.18 Tshs), Malawi (68.12 Mk).

For example, World Bank [ 2000 a], IFAD [ 2001 ] and Barrett et al., [ 2001 ], publications that themselves draw on considerable bodies of poverty research. For similar findings on rising farm productivity across income levels see Evans and Ngau [ 1991 ].

Liberalisation is often debated as if it were a fait accompli and all that were now required is strengthening of private trading systems; however the reality is much more complex than this with rural areas of the four countries being littered with semi-moribund remnants of state organisations some of which have powerful effects in restricting the space within which private operators can manoeuvre [ Cooksey, 2003 ].

The link between taxation and public service delivery has been argued to constitute a cornerstone of the relationship between government and governed in democratic societies [ Moore, 1998 ; Moore and Rakner, 2002 ].

In addition to items by Fjeldstad, already cited in the text, see James, Mdoe and Mishili [ 2002 ] and Ellis and Mdoe [ 2003 ] for Tanzania; and Freeman, Ellis and Allison [2004] on Kenya.

The graduated personal tax was previously applied at a minimum rate of UShs 11,000 (the gradations above this that legislation makes provision for are seldom, if ever, applied); however, at the time of national elections in 2001, the tax was rebated by presidential decree to the flat rate UShs 3,000 level.

The district that this data refers to is Kamuli district and the effective tax rates were those prevailing in March 2003.

For example, in Kamuli district in 2003, the licence fee for a hawker was UShs 12,000, the same as a radio repairer, a tailor or a hairdresser; that for a shoemaker was UShs 20,000 as compared to UShs 100,000 for a petrol station.

The private tax tendering system, as other aspects of rural taxation in rural Uganda, is the subject of ongoing research at the time of writing in mid-2003.

The principles and design of the Uganda approach are set out in a government document produced in October 2000 [Uganda, 2000 b].

Additional information

Notes on contributors

Frank Ellis

Frank Ellis, Overseas Development Group (ODG), University of East Anglia, Norwich NR4 7TJ. E-mail: [email protected]. H. Ade Freeman, ICRISAT, United Nations Avenue, Nairobi, Kenya. E-mail: [email protected]. This revised paper owes much to the perceptive comments of two anonymous referees and the authors are grateful for their input. The authors would also like to thank John Mims for his role in managing the livelihoods data set and preparing the data tables.