Why Rwanda revised its method for measuring poverty

The National Institute of Statistics of Rwanda (NISR) last week released findings from the seventh Integrated Household Living Conditions Survey (EICV 7), which shows significant improvement in citizens’ well-being—including the lifting of over 1.5 million people out of poverty over the last seven years. ALSO READ: Rwanda lifted 1.5m people out of poverty since 2017 – survey It surveyed more than 15,000 households, representing over 62,000 individuals, between October 2023 and October 2024, as a sample. Why the poverty measurement changed In past surveys, such as EICV 5 (2017), poverty was measured based on a person’s per capita consumption falling below a set poverty line. At the time, the overall poverty line was set at Rwf159,375 per adult equivalent per year, based on January 2014 prices. Extreme poverty was defined using a lower threshold—Rwf105,064 per adult per year—reflecting the cost of food providing minimum calories without accounting for non-food needs. The same survey measured extreme poverty using a line of Rwf105,064 per adult equivalent per year, again in the prices of January 2014. This was the cost of buying enough food to provide an adequate number of calories, with a diet that was believed to reflect the observed behaviour of poor households, with no allowance for non-food spending. The new poverty line, under EICV 7 report, uses a cost-of-basic-needs approach, grounded in the estimated caloric requirement of 2,400 kcals per day for an average Rwandan adult—considered a minimally adequate amount of food-generated energy for a person’s body to function properly. This is in line with East African standards, the survey report indicated. To account for varying prices across time and regions, household consumption was adjusted to January 2024 national prices – as reference prices. One of the changes in the EICV 7 methodology is that the food poverty line—used to define extreme poverty—was updated from approximately Rwf105,064 to Rwf356,000 per adult equivalent per year, meaning that it was more than tripled. The overall poverty line, which includes both food and essential non-food needs, was set at Rwf560,127 per adult equivalent, up from Rwf159,375 in EICV 5. ALSO READ: PM Ngirente promises greater progress as Rwanda cuts poverty by 12.4% Now, overall poverty is defined as consumption below Rwf560,127 per adult equivalent per year, while extreme poverty – which is also referred to as food poverty line – is based on the cost of meeting basic food needs only, amounting to Rwf356,432 per year as the reference point. As per the report, the new poverty line was created using a cost-of-basic-needs approach, which establishes a level of consumption that provides for basic nutritional requirements, as well as essential non-food needs such as shelter and clothing. Using this new method, 27.4 per cent of Rwandans were classified as poor in 2024, down from 39.8 per cent, implying a reduction of 12.4 percentage points over a period of seven years, the report showed. Extreme poverty, it indicated, declined to 5.4 per cent in 2024, from 11.3 per cent in 2017, meaning it was reduced by more than half. Explaining the updated methodology behind measuring poverty in Rwanda, NISR Director General Ivan Murenzi said that the change in the previous figures that were used for years was in line with factoring in the observed consumption realities. “This change reflects the real cost of living,” Murenzi added. Once the poverty line is established, he said, statisticians determine how many people fall below it, indicating that they are considered unable to afford the basics—especially food, which in this context refers to the minimum needed for basic functioning. Murenzi said that well-being is composed of both food and non-food components, such as housing, clothing, health, and education—with food being a fundamental element. Revising the 2017 poverty rate—38.2 per cent According to NISR, the protocols for collecting data, and the nature and scope of the questions, were relatively similar, from EICV1 (1999/2001). Reflecting the evolving best practice in poverty measurement, a number of methodological changes were made for EICV7, it indicated. They include a redefined poverty line, a revised adult equivalent scale, separate questions on food consumption and acquisition, and greater detail on food consumed out of the home. As a result of these changes, NISR held that one cannot make accurate direct comparisons of consumption and poverty between EICV7 and EICV5. It decided to use statistical modelling to estimate what 2017 poverty levels would have been using the new methodology. Murenzi explained that because the methodology changed, previous figures had to be recalculated using the new approach to allow for accurate comparison. As such, the overall poverty rate which was recorded at 38.2 per cent in 2017, would have been 39.8 per cent in 2017, using the updated methodology. NISR stated that future surveys will use this updated methodology, beginning with EICV 8 in 2026/27.

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Why Rwanda revised its method for measuring poverty