Current Economic and Development Outlook of the Eastern Federal State

‘Current Economic and Development Outlook of the Eastern Federal State’

By Matthias Ngobi Miti

Butembe County

Email: matthiasmiti@yahoo.com

1.0 Introduction

This paper was aimed at drawing together basic information on the economy of a potential Eastern Federal State in Uganda.  Eastern Uganda is categorized into three sub regions specifically East-Central, Mid-Eastern and North East. The districts in East Central include: Jinja, Iganga, Namutumba, Kamuli, Kaliro, Bugiri, Luka, Budiope, Namayingo and Mayuge. Mid-Eastern has Kapchorwa, Bukwa, Mbale, Bududa, Manafwa, Tororo, Butaleja, Sironko, Paliisa, Budaka and Busia. The sub-region of North East consists of Kotido, Abim, Moroto, Kaabong, Nakapiripiriti, Katwaki, Amuria, Bukedea, Soroti, Kumi and Kaberamaido districts. In some cases, the economic performance of the said region is compared against others as well as nationally. The discussion is centered on nine socio-economic indicators specifically household characteristics, education, employment, health, consumption expenditures, poverty and inequality trends, household income, welfare and vulnerability levels.

2.0 Household characteristics

Eastern Region has the largest population by region in Uganda. There was a decline in the proportion of the population in Central region from 29 to 27 percent and Western from 26 to 24 percent while in Eastern region it increased from 25 to 30 percent when compared to 2005/06.

Furthermore, the average household size of Eastern region remained the highest at 5.6. Central region registered a sharp decline of 0.7 at 4.1 in 2009/10 as well as Western region from 5.5 to 5.1 by 2009/10 possibly because of increased education levels compared to Eastern region. In terms of family stability, Eastern region had the lowest population above 18 years who never married(15%),highest currently married polygamous(19.7%),second highest divorced/separated) and  nearly the utmost portion of widow/widowers(8.3%) with Northern Uganda at the top with (9.1%) attributed the civil strife and wars.

Regarding religion, the Protestant faith had the majority of followers (38.0 %), followed by Catholics (30.4 %), Muslims (17.8%), Pentecostals (11.4%), SDA (1.2%), traditionalists (0.2.0%) and others (1.0%).

3.0 Education

In contrast to other regions, adult males in Eastern region maintained the lead position in having the highest illiteracy levels in Uganda while the increment in the literacy growth rate for females was lower than that of Northern region between the years 2005-2010.  Literacy levels for adult females in Eastern Uganda increased from 56 percent in 2005/06 to 60 percent in 2009/10 while in Northern region, the increment was 7 percentage points at  52 percent in 2009/10. Overall, Eastern region with 68 percent in 2009/10 follows Northern region (64%) in having the lowest adult literacy rates by region.

In terms of Education attainment (Persons aged 15 years and above), 18.3 percent in Eastern region had no formal schooling while 23.1 percent complete secondary education. Eastern region had the highest proportion of persons who complete primary (56%) but also had the lowest proportion of persons who were educated at secondary level and above (2.5 %) in 2009/10.

Of the 5 regions, Eastern Uganda occupied the third position in the reading culture.  Overall, 30.5 percent participated in reading, 39. 8 percent male and 22.4 percent female. The leading region in participation in reading books, news papers, magazines and journals was Kampala with 70.4 percent .It was followed by Central with 44.7 percent.

4.0 Employment

Whereas Eastern region had the highest labour force[1] by region (26%) and the fastest labour force growth rate of 6.9 percent, it also recorded the lowest Labour Force Participation Rate[2] (LFPR) in the two surveys; 71.4% in 2005/09 and 76.8 percent in 2009/10.

It also leads other regions in terms of the working population growth rate which increased by 6.4 percent at 26.6 percent in 2009/10. Excluding Kampala, it had the lowest proportion of multiple job holders of 26.1 percent by 2009/10.

Unemployment in Eastern region sharply rose by 2.3 percent to 3 percent (91,000 persons) in 2009/10 which was slightly below the national average of 4.2 percent.

Whereas in 2005/06, it was in the third bottom ranking position, currently Eastern region tops with 4.1 percent in time related underemployment. It is 0.6 percentage points above the national average of 3.5 percent in 2009/10. This implies that more people in Eastern region work less than 40 hours a week in comparison to other regions. The same region had the lowest proportion of Skill under utilization of 2.7 percent in 2009/10. In addition, the UNHS 2009/10 findings show that 10.8 percent employed persons in Eastern region are inadequately paid.

5.0 Health

With regard to health, Eastern region had a bigger proportion of the population that suffered illnesses within 30 days compared to other regions. Disease prevalence rose by 1.9 points at 50.6 percent, which is far higher than the national coverage of 42.9 percent in 2009/10. The 2009/10 UNHS results indicate that Eastern region had the highest incidences of Malaria (53.9 percent) despite the rise in the use of mosquito nets from 17.2 to 47.0 percent, lowest respiratory infections(12.9%),second highest cases of diarrhea(3.7%),highest urinary and skin infections of 0.3 percent and 1.8 percent respectively. About 76.5 percent of communities reportedly accessed Improved Sources of Drinking Water.

 6.0 Consumption Expenditures

Consumption Expenditure per Household rose by UGX 14,500 at UgX.193,400 but  still below the national coverage of 210,450 in 2009/10. Although the mean per capita expenditure within Eastern region increased from UgX.31,800 in 2004/05 to 34,850 in 2009/10, the figure is far below the national average of  UgX.42,150.Besides, a real decline is noted in the urban areas of the Eastern region.

Of all regions, the Eastern recorded the lowest average growth rate of Mean Consumption Expenditure per Adult Equivalent (MCEA). The average MCEA growth rate for Eastern Rural slumped from 4.4 to 3.4 percent while Eastern Urban recorded a sharp fall from 2.4 to -2.4 percent for the periods of 2002-2006 and 2006-2010 respectively.  The people in the East of Uganda spend 54 percent of their income on food and beverages while those in central and Kampala spend as less as 38 and 30 percent respectively. Other expenditure items for the east included Rent, fuel and energy with 15 percent, health with 6 percent while Transport and communication absorbs 6 percent.  In contrast to other regions, Eastern had the lowest expenditure on education of 5 percent.

7.0 Poverty and inequality trends

According to the recent UNHS, 2009/10:81-85, the proportion of people in poverty in Eastern region declined from 35.9 percent to 24.3 percent (that is, from 2.45 million to 2.2 million persons in poverty, respectively). The decline is driven by the rural areas, which experienced a 12.7 percentage point drop. Considering the poverty levels in 10 sub-regions, North East was in the lead with 75.8 percent, followed by Mid-Northern with 40.4 percent, west Nile with 39.7percent, Eastern 26.5 percent, East Central had 21.4 percent and Mid-Western had 25.3 percent. Inequality varied from 0.319 in Eastern region to 0.451 in Central region.

Figure 1: Number of poor persons in the Eastern region.

Data source: UHBS, 2009/10

Eastern Rural had the highest poverty incidence of 3.09 percent which declined to 2.36 in 2005/06 and 2.07percent in 2009/10.  In the year, 2002/03, Eastern was at the top of other regions with 3.19 millions of poor persons. Meanwhile, Northern region had only 0.64 poor persons in excess of Eastern Uganda in 2009/10.  However, from 2005-2010, Eastern was over taken by Northern rural sub-region whose poverty rates slightly dropped by 0.23 percentage points at 2.72 percent in 2009/10.

Findings of study by UBOS titled, “Spatial Trends of Poverty and Inequality in Uganda: 2002-2005,” indicated that Busoga region, Mbale and Pallisa districts reportedly had the highest concentration of poor people. The report said more than 100 poor people live per square Km in these areas.  In these districts, the poverty density (number of poor people living on less than a dollar a day) per square Km per sub-county is more than 100 people, compared to other regions. Poverty was attributed to poor health, lack of access to clean water, poor sanitary disposal and high population.

Figure 2: Headcount[3] poverty estimates and trends by region

Data source: UNHS 2002/03, 2005/06 (2009/10)

Why do areas sub regions not severely affected by War compared to Northern Uganda, have almost the same number of poor persons? If the cause is related to deliberate public neglect and poor policy options, then the regime in power ought to account for this discrepancy to the people in the East of the country!

Table 1 : Poverty estimates and contribution to P0, P1 and P2 in the UNHS IV 2009/10 by sub region

Sub-region	Population Share	Mean CPAE	Poverty estimates			Percent contribution to P0, P1 & P2
			Po	P1	P2	Po	P1	P2
East Central	13.1	53,733	21.4	4.8	1.7	11.5	9.4	8.2
Mid-Eastern	16.5	46,499	26.5	6.5	2.3	17.9	15.9	13.8
North-East	3.4	31,323	75.8	35.0	19.1	10.5	17.5	23.3
Uganda	100	62,545	24.5	6.8	2.8	100	100	100
Northern	20	38,988	46.2	15.5	7.3	38.0	46.0	52.7

Data source: UNHS 2009/10

The study by Okurut et al (2002:28) concluded that based on the national poverty line, Northern Uganda has been found to be the poorest area in the country; it has the largest depth of poverty and the worst inequality. However, ‘Using region-specific poverty lines, Eastern region has the worst indicators of poverty. The same paper affirms Western region as the richest region in Uganda.

At the national level, various studies of (UBOS), indicate a striking decline in poverty incidences from 56 percent in 1992 to 38.0 percent in 2003, 38.8 percent in 2005 i.e.9.8 million Ugandans, 31 percent in 2008 and 24.5 percent by 2010. Despite this drop, the Gini- coefficient index increased from 0.395 in 1999/2000(UNHS) to 0.428 in 2002/03 (UNHS). Other studies show that poverty levels increased from 39 to 49 percent among households engaged in Agriculture. Yet the proportion of those employed in Agriculture grew from 39 to 50 percent over the same period (DENIVA, 2006, SEATINI, 2005).

8.0 Household income

Available information reveals that households in the Eastern region earn 1.8 times lower than their national counter parts.

At regional level, Eastern had the lowest growth rate (10.3 percent) of the total average monthly household income for the period 2005/06-2009/10. Kampala stood in the first position with 175.8 percent growth rate, followed by Western with 90.6 percent and Central with 86.1 percent. Both Northern and Eastern were below the national average of 77.8 percent. Simply put, the total monthly income of a resident in Kampala is about 6 times more than a resident of Eastern region which formerly hosted the most industrialized town in East Africa!

Table 2: Total average monthly household income and growth rate by region from 2005/06-2009/10

Region	2005/06	2009/10	Average Income growth rate
Kampala	347,900	959,400	175.8
Central	209,300	389,600	86.1
Eastern	155,500	171,500	10.3
Northern	93,400	141,400	51.4
Western	159,100	303,200	90.6
Uganda	170,800	303,700	77.8

Source:  UNHS, 2009/10, Extracted from Table 7.1: Average Monthly Income by Region and Residence (UGX); 93.

With regard to income from cultural activities, the majority 53.8 percent in Eastern region earned from herbal medicine practice. The region also recorded the highest proportion of interpreters (12 .2 %). In comparison to other regions, Eastern still had the lowest proportion of adults who earned from music (17.8%) and drama (7.3%), and making mats and baskets (9.1%). About 24 percent households were operating Informal Businesses. Mining and quarrying (52%) and fishing (47.9%) were predominant in the Eastern region (52%). In addition, the industries of agriculture had 32 percent, food processing (22.4%), hotels & restaurants (23%), trade (24.6%) and services (21.8%)

9.0 Welfare levels

Well-being of individuals or groups takes consideration of their health, happiness, safety, prosperity, and fortunes. Eastern was in the lead with 90.7 percent of the households owning a house. This was above the national coverage of 81.4 percent. In terms of the households owning land, it was second with 81.7 percent to Western Uganda which registered 85.4 percent.  It had the lowest proportion of households owning electric equipments such as television sets, radios, and radio cassettes (43.5percent) lower than the national coverage of 53.9 percent and also the least proportion of households owning Jewellery and watches (13.3 percent). It had the second lowest portion of households using mobile phones of 38.7 percent below the national average of 46.3 percent.

Furthermore, Eastern had the highest proportion of households using bicycles 46.6 percent, which was above the national average of 36.7 percent. Only 2.7 and 0.8 percent do own motor vehicles and motor cycles respectively.

Table 3: Household welfare indicators

Household Welfare indicator	Eastern			National
	2002/05	2005/06	2009/10	2002/05	2005/06	2009/10
Possession of Two Sets of Clothes	83.7	87.5	91.2	88.0	87.0	88.2
Ownership of Blanket	23.7 0	30.5	35.0	39.6	35.3	43.1
Possessing at Least a Pair of Shoes	25.2	34.1	45.7	44.7	49.7	58.1
Took One Meal a Day	3.0	4.8	7.3	7.7	8.5	9.3

Data source: UNHS,2009/10

Eastern region had the highest proportion of   households 17.8 percent who did not provide Breakfast for children Aged below 5 Years and also had the lowest proportion of households (0.8percent) that provided children Porridge with milk! Also, it followed Kampala (93.3%) in the proportion of households owning furniture and furnishings with 86.4 percent.

In 2005/2006, Eastern was still in the lead with 43.2 percent of the households who considered borrowing from neighbors when they ran short of salt. However, in 2009/10, it slipped in the second position with 47 percent and Northern had the top borrowers of salt of 62.3 percent.

Importantly, Eastern had the highest proportion of households using paraffin candles ‘tadooba’ as lighting fuel, 81.2 percent in 2005/06 and 80.2 percent in 20091/0. It also occupied the second bottom place in the proportion of households connected to electricity (3.5 percent). In 2009/10, it was at the top of all regions with 83.1percent still using the traditional ‘three stones’ cooking technology while also maintaining the lowest position in the use of improved stoves with a slight increment of 1.7 percentage points at 4.8 percent .  About 11.4 percent of households do not use toilet facility but visit the bush to dispose off their feaces. This is above the national coverage of households without toilets were 8.7 percent in 2009/10. Eastern Uganda also had the second lowest proportion of households using VIP (1.9%) and flush toilets (0.6%).

1.0 Vulnerability:

Eastern region had the lowest proportion of paternal orphan-hood (5.8%) and proportion of orphans (9.2%). It also recorded the highest proportion of children aged 0-17 with surviving two parents (90.8 %). Only 1.6 percent had lost both parents. In 2005/06, it also had the second highest proportion of households with 4 orphans and beyond but by 2009/10, this slumped to 12 percent and it was in fourth position. In 2009/10, it had the second least proportion of vulnerable children with 34 percent down from 66 percent in 2005/06.

References for Further Reading:

DENIVA. (February 2006). A final report on the TDP project; Uganda: The Impacts of Trade Liberalization in the Dairy and Maize Sectors on Household Welfare.

Okurut F.N. et al (November 2002). Determinants of regional poverty in Uganda, The African Economic Research Consortium (AERC), Research Paper 122, Nairobi.

SEATINI (January 2008).The impact of liberalization of agricultural imports on the performance of the agricultural sector and welfare of small scale farmers.

SEATINI (July 2005).The economic partnership Agreement (EPA) negotiations: Implications and way forward.

UBOS (2010). The Uganda National Household Survey (UNHS) 2009/10, Socio-Economic Module, Abridged Report, November 2010.

UBOS. Uganda National Household Surveys (UNHS), 2002-2003, 2005/6.

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[1] Labour force refers to the economically active population including persons aged 14-64 years, who were either employed or unemployed during the last seven days prior to the survey.

[2] The Labour Force Participation Rate (LFPR) is the number of persons in the labour force expressed as a percentage of the working-age population. It measures the extent to which a country’s working age population (14-64 years) is economically active. It also gives an indication of how many people of working age are actively participating in the labour market and includes both the employed and unemployed.

[3] Headcount (P0) shows how broad or wide spread the poverty is (the estimated household population spending less than what is necessary to meet their caloric requirements and to afford them a mark-up for non-food needs. P1 measures how poor the poor are and, by giving more weight to the poorest, P2 gives an indication of how severe poverty is.