Gains from integration among the five East African Community (EAC) states could be hampered by the enlarging inequality gap of the region’s citizens.
A new report, State of East Africa Report 2013, by the Society for International Development (SID) and Trademark East Africa, highlights that unless drastic readjustments are made to reduce inequality, efforts to improve the region’s economy will not benefit the majority population.
According to the report, launched yesterday in Kigali, half of the population of EAC, representing 71 million people, lives on $1.6 a day, whereas 14 million, representing only 10 percent are the rich living on $5.8 a day.
The poorest people in the bloc–56 million people (40 per cent)–live on $0.63 a day.
Rwanda is East Africa’s most unequal country, the report says, with the richest 10 per cent earning 3.2 times more the income of the poorest 40 per cent.
“However, after 2006, inequality is trending downwards,” said Aidan Eyakuze, the associate regional director for SID, during the launch.
“Among the major causes of the inequality include high unemployment rate, poor quality education and rapid infrastructural reforms that placed more emphasis on service delivery rather than of agriculture which employs the majority.”
Burundi is the least unequal country in the region, according to the report, with its richest population earning 1.35 times more than the poorest.
Tanzania, Uganda and Kenya follow with their richest earning 1.6, 2.3 and 2.8 times more than their poorest respectively.
Report under a microscope
The report was received lukewarmly, with some acclaiming it as a true picture of the issues that must be addressed in the region, while others criticised it for over relying on data that might be outdated.
“They are quoting data from 2010 and for Rwanda, four years is a long time; many things have happened between 2010 and 2014. What they have presented might be true as far as 2010 is concerned, but I am not sure it is the same today,” Patricia Hajabakiga, a member of the East African Legislative Assembly, said.
“There are many programmes that have been implemented since then and many reports have been produced after 2010, which they could have relied on for a more accurate picture.”
Andrew Mold, the chief of Sub-Regional Data Centre at the UN Economic Commission for Africa, defended the report, saying the data it relied on was collected from national statistics and surveys that are not yet upgraded.
“It is not their fault; for example, the household surveys like the Demographic and Health Surveys happen in a period of four or five years, so you have to wait until the next one comes out,” Mold told The New Times.
“What it does is raise an issue of inequality, which is a problem all over the world, even in the developed world. Going forward is an issue; therefore, more attention needs to be placed on policies such as fiscal policy and social welfare programmes. Rwanda has a lot of these programmes in place that address inequality levels, but their depth and impact is what must be emphasised.”
The report says that for EAC to overcome the inequality gap between its rich and poor, it must first address the absence of political will and weak capacity for effective policy execution, as well as empower its growing number of youth.