Rapid economic transformation has failed to improve the living conditions for East Africans largely because agriculture, the sector that has been at the helm of poverty reduction, is ignored.
The claims are made in the 2014 Millennium Development Goal (MDG) report, with figures showing that countries in the region have succumbed to the temptation of fronting their services sector ahead of agriculture which employs the majority of the the citizens.
Launched last week by the African Development Bank (AfDB) and United Nations Economic Conference on Africa (Uneca), the report says whereas the poverty rate has dropped on the continent, more Africans are living below the poverty line of $1.25 (Rwf875) per day.
“The rapid change in the structure of the East African economy is an important factor explaining the region’s economic performance and the uneven distribution of income and other benefits of growth. In just one decade, most East African economies reduced the share of agriculture in the economy and substantially increased that of the service sector,” the report indicates.
“While there is no problem with this, the ability of the service sector to provide decent employment opportunities for rural migrants is weak.”
The report projects Rwanda and Ethiopia as shining examples of maintaining growth fuelled by agriculture, while Uganda and Tanzania, which used to be predominantly agriculture-led, now put more emphasis on their services sectors.
Meeting budget target
Over the last few years, Rwanda has met the Maputo Declaration that requires African governments to set aside 10 per cent of budget funding for the agriculture sector.
This investment, coupled with strategic policies, has been significantly responsible for the country’s rapid improvement in rural poverty reduction, and has been linked to stronger social protection, according to the report.
It also points to Rwanda’s system of multiple social mechanisms, including Vision 2020 Umurenge Programme, universal health insurance, free education and social transfers such as a pension scheme as having a great impact on the overall decrease in extreme poverty from 39 per cent in 2006 to 34.5 per cent in 2009.
Generally, the number of Africans living below the poverty line rose from 290 million in 1990 to 376 million in 1999 and 414 million in 2010.
Four countries accounted for around 52 per cent of the poor in the continent, including Nigeria with 25.89 per cent, DR Congo with 13.6 per cent, Tanzania with 6.8 per cent and Ethiopia 5.2 per cent.