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At least 50 per cent of Ugandans who are classified as non-poor remain vulnerable with a high chance of sliding back into poverty in case of a shock, according to the World Bank. In its 2022 Uganda Poverty Assessment Brief, the World Bank says the shocks are related to drought, irregular rains, illness of an income earner or households, floods, pests, death and theft, among others.
Performance and drivers of poverty
The brief, which was released yesterday, indicates that in the last eight years, between 30 and 40 per cent of Ugandans had experienced at least one shock, with households in rural areas and poor households being exposed the most.
Rural households, the brief notes, are likely to take the hardest pushbacks given that such experiences including climate-related shocks, which are the most frequent, impact livelihoods in terms of food and subsistence incomes.
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“Climate and weather-related shocks are closely related to agriculture and incomes. These are particularly hard for rural households, who depend on agriculture,” the World Bank said.
The World Bank noted that rural households and the poor have the most limited means to cope. They are also more likely to deplete their safety nets such as savings, help from relatives, and involuntary reduction of consumption levels to cope with shocks.
While presenting the brief in Kampala yesterday, Dr Aziz Atamanov, a World Bank senior economist in poverty practice, said rural households and the poorest were more likely to experience shocks than urban or relatively well-off folks. The situation is worsened by the limited likelihood to save and the decline of the agricultural share in the economic setup.
The cycle of poverty
Therefore, the World Bank indicated, the 40 per cent who have been affected by shocks in the last eight years, had experienced a decline in income and assets with a number of them sliding back into poverty.
“About 36 per cent of chronically poor and 36 per cent of those who turned poor in 2019/20 after being non-poor in 2015/16 experienced at least one shock in 2015/16,” the brief reads in part.
Michael Atingi-Ego, the Bank of Uganda deputy governor, said because many Ugandans are classified as poor, they are “vulnerable to shocks and the serious issue that needs to be addressed is climate change through environmental and social governance”.