Big push to roll back poverty

Big push to roll back poverty

MASERU – A World Bank report says hunger continues to stalk Lesotho’s rural folks even as the country made significant strides to lift people out of poverty through education, higher wages and social interventions. Launched last Friday, the Lesotho Poverty Assessment report covers the 15 years from 2002 to 2017. The report is a mixed bag of both positive and depressing news for a country in the throes of poverty.

It tells a story of a country that continues to battle stubbornly high levels of poverty at a time when its economy is hit by droughts, low investment, declining remittances from the diaspora and sliding revenues from SACU. The report says in the past fifteen years Lesotho has lifted 47 000 people out of poverty. That means in one and half decade the proportion of Basotho living in extreme poverty fell seven percentage points from 56.6 percent to 49.7 percent.

This progress was on the back of “improvements in education and increases in incomes from well-paid jobs largely in the service sector”.
Yet despite this positive progress more than 75 percent of the population remains “either poor or vulnerable to poverty”. The report says although Lesotho is gradually winning the battle against poverty in urban areas its interventions have had marginal success in reducing rural poverty.

Between 2002 and 2017 poverty in urban areas fell from 41.5 percent to 28.5 percent but there was only a slight change in the levels of poverty in rural areas which retreated from 61.3 percent to 60.7 percent.
In sum that means rural poverty rates have stagnated, resulting in a widening gap between rural and urban poverty.
People in the urban areas are therefore better off than those in rural areas.

The report says poverty fell in four out of six regions. The increase was in Rural Mountains and Senqu River Valley regions which are both in rural areas.
As such nearly seven in every ten people in Rural Mountains live in poverty.
The report notes that despite the “growing urban-rural poverty divide, inequality fell as a result of social protection and an increase in wage incomes among the poor”.
On average Lesotho spends 4.5 percent of its GDP on a social assistance programme that targets mainly the poor.

The report however points out that although Lesotho is now more equal than its neighbours, “it remains one the 20 percent most unequal countries” in the world.
In the rural areas poverty levels are highest among female-headed households, “especially those headed by single women, the less educated, the unemployed, and the caretakers of large families and children”.
The modest decline in the national poverty rate however disguises a “notable decline in extreme poverty and inequality”, the report explains.

Nationally extreme poverty, based on a food basket required to achieve a calorie requirement of 2 700 kilocalories per adult per day, dropped from 34.1 percent to 24.1 percent.
In urban areas it halved from 22.2 percent to 11.2 percent and declined in the rural areas from 37.7 percent to 30.8 percent. This means Basotho are eating better.
The report says while access to basic public services has improved, it “remains unevenly distributed across regions, with spatial pattern of access following the urban-rural divide”.
“Rural regions tend to have smaller shares of people with access to basic services”.

It notes that economic growth over the past ten years had little impact on job creation.
And since 2015 Lesotho’s economy has not grown per capita because of political instability, droughts and South Africa’s prolonged slow growth that has hit SACU revenues.
The report paints a gloomy prospect for Lesotho in the face of South Africa’s poor economic outlook in the “near-to-medium term”.
“Lesotho, therefore, finds itself in need of new resources of sustainable and inclusive growth, with a dynamic private sector that creates jobs and helps the country seize opportunities in regional and global markets,” says the report.

It further says if it was not for the low rainfall in 2015 and 2016 rural poverty would have “been six percentage points lower, and the pace of national poverty reduction would have nearly doubled”.
The strong link between the level of education and poverty is also illustrated in the report.
Families headed by people with higher educational qualifications are likely to be better off and less prone to poverty.
This is because there is a symbiotic connection between the level of education and income.

“Half of the current level of inequality in Lesotho can be attributed to factors beyond individual’s control, such as place of birth, basic educational attainment, health and environmental shocks.”
More than half of the inequality in income is attributed to differences in wage income.
The wage income is largely determined by the level of education. The report illustrates how factors beyond an individual’s control contributed to trapping families in a vicious cycle of intergenerational poverty.

“For example, parents’ level of education generally predicts their children’s level of education, and it remains difficult for people born in the bottom to climb to the top and vice versa”.
“Inequality continues to manifest in disparities in access to basic public services across income groups as well as geographic locations. These disparities limit the ability of poor households to take advantage of economic opportunities.”

Staff Reporter

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