Goal 1 Eradicate extreme poverty and hunger
Box 1.3 Rwanda accelerates poverty reduction by reducing inequality, widening social protection and improving access to credit Over the past five years, Rwanda has translated its economic growth into poverty reduction countrywide because growth has been inclusive and accompanied by falling inequality – unlike the previous five years. In that earlier period (2000/01 to 2005/06), income growth was higher among richer groups, especially at the top, whereas in the second period (2006–2011) growth benefited lower-income groups. More technically, the ratio of the 90th percentile of consumption to the 10th fell between 2005/06 and 2010/11. It had increased sharply in the previous half decade, when inequality (measured by the Gini coefficient) worsened from 0.51 to 0.52. The inclusive second-period growth narrowed income inequality to 0.49, lower than in 2000/1. All provinces (apart from Northern Province) shared in the growth’s inclusiveness as their inequality narrowed – in short, most of the population shared in the benefits of growth. Other factors reducing poverty include: •
greater access to electricity of domestic dwellings (6.5 per cent more households used electricity for lighting in 2006–2011);
•
a rise in the share of households’ agricultural output marketed across regions from 22 per cent in 2006 to 27 per cent in 2011;1
•
participation in social protection, such as the Ubudehe scheme, the Rural Sector Support Project and the Vision 2020 Umurenge Programme Direct Support, in which 8 per cent, 5 per cent and 1 per cent of households benefited (according to the Third Integrated Household Living Conditions Survey); and
•
better access to credit (although access is biased toward urban households, Kigali and Eastern Provinces improved strongly).
Still, the government could focus more on addressing rural poverty, especially by improving farmers’ living conditions. It should also improve the coverage and efficiency of social protection. And access to credit – still biased against rural households – requires further deepening.
1. The rate increases with income quintile: the poorest quintile sells only 15 per cent of its harvest, the second-poorest 19 per cent and the fourth 25 per cent. Sources: NISR (2011); NISR and UNDP (2007).
Assessing Progress in Africa toward the Millennium Development Goals, 2012
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