DETERMINANTS OF POVERTY IN SOUTH SUDAN: A CASE STUDY OF GREATER BOR IN JONGLEI STATE
BY:
MABIOR MICHAEL MAKUACH JOK
BA (ECONS), UBG
X50/63169/2013
A RESEARCH PROJECT SUBMITTED TO THE SCHOOL OF ECONOMICS IN THE UNIVERSITY OF NAIOROB IN PARTIAL FULFILMENT FOR THE REQUIREMENTS OF MASTERS OF ARTS IN ECONOMICS.
NOVEMBER, 2015
I
DECLARATION I declare that this is my original work and that it has not been submitted in any University for any degree award.
Sign: …………………………………………….. Date……………………………
CANDIDATE: MABIOR MICHAEL MAKUACH JOK
REG NO: X50/61369/2013
Approval
This Paper has been submitted for examination with our approval as University Supervisors.
Sign: ………………………………………………… Date……………………………….
PROF. MANDA DAMIANO KULUNDU SCHOOL OF ECONOMICS, UNIVERSITY OF NAIROBI
Sign: ……………………..………………………….Date………………………………..
DR. DIANA NJERI KIMANI
SCHOOL OF ECONOMICS, UNIVERSITY OF NAIROBI
ii
DEDICATION I dedicate this Research Study to my Late Dad, Makuach Jok Adhuong, the Late Grandfather Jeremiah MayenYai and Late Uncle James Mawut Gai Yai, who selflessly supported me throughout my education. May their souls rest in eternal peace!
iii
ACKNOWLEDGEMENTS There is a limit to what a person can do by himself, but there is no limit to what the ablest person can accomplish through the help of others! The completion of this research paper and my academic success is not solely due to my effort. God and many people have helped me in one way or another. I would like to acknowledge the following special individuals for their contributions throughout my studies: 1. God, the Almighty, for the inner peace, inspiration, knowledge, health and strength he gave me and the help of whom was too immense to reach this day.
2. My Supervisors. This work was done under the constructive criticism and support of Prof. D.M. Kulundu, and Dr. D. N. Kimani. Their excellent supervision, patience and advice have astounded me from the process of writing the research proposal until the end of the writing process. I wish to sincerely thank them for having helped me throughout this period. Although they were extremely busy, they made time for consultation, thus enabling me to complete this work.
3. I also wish to express my deepest appreciation to Prof. G. Mwabu. I thank him for acting as co-supervisor in this work and for his critical counsel, constructive suggestions, patience, and encouragement. He has provided a great deal of valuable advice and made many useful comments and corrections on this work.
4. AERC. I am deeply indebted to the African Economic Research Consortium (AERC) for providing me the Masters of Arts (Economics) scholarship to study at the University of Nairobi. This scholarship allowed me to experience the good educational system in Kenya.
5. School of Economics, University of Nairobi. My heartfelt thanks and gratitude go to the School of Economics, starting with Prof. J. Mariara, the School Director, all the lecturers and non-teaching staff for broadening my horizon and making University of Nairobi a conducive place for my studies.
iv
The school offered me an intellectually stimulating environment as well as opportunities to meet and be mentored by remarkable people, including Prof. Mariara, Prof. Mwabu, Prof. Kulundu, Prof. Kimuyu, Dr. Oleche, Dr. Muriu, Dr. Nyandemo and Dr. Samanta.
6. I have special obligation to extend my heartfelt thanks to my mentors, Prof. Robert Mayom Kuoirot Deng-aguek, Andrew Mayen Akuak, Prof. Isaac Bior Deng-aliau, Molana Majok Mading Majok, and Yithaya Ayuel Deng Malual, for their moral support and advice.
There would be no work done without recognizing the role played by my respondents who gave me up to-date information, and colleagues who stood with me during both hard and good times of researching. You are truly positive friends. Thank you very much.
Finally, I would like to express my deep appreciation and gratitude to all my relatives, friends, lecturers, well wishers and all individuals who have in one way or the other contributed to my academic, spiritual and personal growth. My friends and relatives, I will always remember your evening questions: Mabior ‘ba bέn naa’? Mabior ‘ba thök naa’? Are you still doing your work? The answers are yes, Mabior has done his work and he is coming soon!
MAY GOD BLESS ALL OF YOU ABUNDANTLY!
v
TABLE OF CONTENTS
DECLARATION ...... ii
DEDICATION ...... iii
ACKNOWLEDGEMENTS ...... iii
ABRREVIATIONS AND ACRONYMS ...... viii
LIST OF TABLES ...... viii
ABSTRACT...... xi
CHAPTER ONE: INTRODUCTION ...... 1
1.1 Background ...... 1
1.2. Statement of the Problem ...... 3
1.3. Research Questions ...... 3
1.4. Objectives of the Study...... 3
1.5. Scope of the Study ...... 4
1.6. The Significance and Justification of the Study ...... 4
1.7. Organization of the Paper...... 4
CHAPTER TWO:LITERATURE REVIEW ...... 5
2.0 Introduction ...... 5
2.1 Theoretical Literature ...... 5
2.1.1 Poverty Definition and measurement ...... 5
2.1.1.1 Foster, Greer, and Thorbecke (FGT 1984) Measures ...... 6
2.1.1.2. Headcount Index (P0) ...... 6
2.1.1.3. Poverty Gap Index (P1) ...... 7
2.1.1.4. Squared Poverty Gap Index (P2) ...... 7
vi
2.1.1.5 Sen Index ...... 7
2.1.1.6. The Sen-Shorrocks-Thon Index...... 8
2.2 Theories of the Causes of Poverty ...... 8
2.2.1 The Culture of Poverty Theories ...... 8
2.2.2 Economic, Social and Political Distortions Theories ...... 8
2.2.3 Geographical Disparities Theories ...... 8
2. 2. 4 Individual Deficiency Theories ...... 9
2.2.5 Cumulative and Cyclical Interdependencies Theories ...... 9
2.3 Empirical literature ...... 9
2.3.1 The Determinants of Poverty ...... 9
2. 4 Overview of Literature ...... 11
CHAPTER THREE:RESEARCH METHODOLOGY ...... 13
3.0 Introduction and Theoretical Framework ...... 13
3.1 Data Source and Instruments ...... 13
3.2 Research Design ...... 13
3.3 Sample Size and Sampling Technique ...... 13
3.4 The Study Area ...... 14
3.5 Poverty Measurement ...... 15
3.5.1 Cost of Basic Needs (CBN) Approach...... 15
3.5.2 The Food Energy Intake Method...... 16
3.5.3 Subjective Method...... 16
3.5.4 Rapid Approach Method ...... 16
3.6 Data Analysis ...... 17
3.7 Model Specification (The Logistic Regression Model) ...... 17
vii
CHAPTER FOUR:RESULTS AND DISCUSSIONS ...... 20
4.1 Introduction ...... 20
4.2 Descriptive Analysis ...... 20
4.3 Normality Test ...... Error! Bookmark not defined.
4.4.Test for Multicollinearity ...... 22
4.5 Poverty Lines ...... 25
4.5.1 Food Poverty Line of Greater Bor ...... 25
4.5.2 Absolute Poverty Line of Greater Bor ...... 25
4.6 Analysis of Poverty Measures ...... 25
4.6.1 The Magnitude of Food Poverty ...... 26
4.6.2 The Magnitude of Total Poverty ...... 26
4.7 Econometric Results ...... 26
4.8 Discussion of the Study Results ...... 29
4.9 Limitation of the Study ...... 31
CHAPTER FIVE:SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ...... 32
5.1 Introduction ...... 32
5.2 Summary of the Study Findings ...... 32
5.3 Conclusions of the Study Results ...... 32
5.4 Policy Recommendations ...... 32
5.5 Areas for Further Study ...... 33
REFERENCES ...... 34
APPENDICES ...... 38
viii
Annex 1: Introduction Letter ...... 38
Annex 2: Questionnaire ...... 40
ix
ABRREVIATIONS AND ACRONYMS ADB Asian Development Bank
BOSS Bank of South Sudan
CDF Constituency Development Fund
GDP Gross Domestic Product
GNI Gross National Income
FAO Food and Agricultural Organization
FGT Foster, Greer and Thorbecke
GOSS Government of Southern Sudan
ICBPR Institutional Capacity Building for Poverty Reduction and
GGP Good Governance Project
ICSP Interim Country Strategy Paper
IFAD International Fund for Agricultural Development
MDGS Millennium Development Goals
NBS National Bureau of Statistics
NBHS National Baseline Household Surveys
OLS Ordinary Least Squares
SSA Sub-Saharan Africa
SPSS Statistical Package for Social Science
S5thPHC Sudan 5th Population and Housing Census
UNDP United Nations Development Programme
x
LIST OF TABLES
Table 3.1 Composition of Sample ...... 14
Table 4.1 Summary Statistics ...... 20
Table 4.2: Shapiro-Wilk Test for Normality ...... Error! Bookmark not defined.
Table 4.3: Variance Inflation Factor (VIF) ...... 22
Table 4.4: Spearman Correlation Matrix ...... 24
Table 4.5 Food and Absolute Poverty Lines ...... 25
Table 4.6: Magnitude of Food Poverty in Greater Bor of Jonglei State ...... 26
Table 4.7: Magnitude of Total Poverty in Greater Bor ...... 26
Table 4.8 Estimated coefficients of the logistic model ...... 27
Table 4.9 Average Marginal Effects of the Logistic Regression ...... Error! Bookmark not defined.
xi
ABSTRACT The Government of South Sudan initiated different programmes to address poverty. These programmes include the Interim Country Strategy Paper 2011-2013 which the government adopted as an approach to fight poverty, the Institutional Capacity Building for Poverty Reduction and Good Governance Project, Constituency Development Fund (CDF), Vision 2040 and international support to reduce poverty in the country. However, little has been achieved in terms of improving the general welfare of the people in the country despite massive resources directed to this young Nation. Therefore, the core objective of this study was to examine the major factors which determine poverty through primary data collected from Greater Bor, in Jonglei State in Southern Sudan. Binary Logistic regression model was used in estimation. The following variables were considered: age of the head of the household, education levels, employment status, gender of the head of the household, household size, household residence, marital status, distance to the nearest health facility, sector of the economy, land ownership, status of the road networks, access to safe water and access to credit facilities. It was revealed at 95% confidence interval that education levels, gender of the head of the household, marital status and sector of economy employed significantly reduced the probability of being poor while age of the head of the household, household size, distance to the nearest health facility and the poor status of the road network significantly increased the probability of being poor. Based on the study finding, it is suggested that the government should consider giving cash transfers to the senior citizens who can no longer work to enable them acquire basic necessities to avoid succumbing to the pool of poverty, creation of department specifically tracking the fertility rates and creation of awareness on family planning issues to avoid large and unmanageable families, establishment of health care facilities near the people to avoid long distance in an effort of seeking health care thus avoiding losing working days through public private partnerships and lastly, there is a need for improving all major roads which acts as market linkages including feeder roads to ease accessibility and movements.
xi
CHAPTER ONE: INTRODUCTION 1.1 Background Poverty, the focus area of this research study is a social phenomenon that has been the subject of heated debate and research for several decades. According to Mack et al., (2009), and as cited in Musana (2013), poverty is a major problem in the world and every minute a person dies due to poverty related reasons. They argue that the poorest of the poor are found in less developed countries which experience high disease prevalence, infant mortality rates and maternal deaths, low literacy rates, malnutrition and retarded growth. They also emphasize that South Asia and Sub-Saharan Africa are the major examples of the most poverty stricken regions of the world. Despite institutions including the World Bank and United Nations launching various programs and projects such as the Millennium Development Goals (MDGs) to meet the needs of the world’s poorest people and directing their activities towards poverty reduction, high levels still exist in the world. According to the World Bank (2009b), an estimated 1.29 billion people were living below $1.25 a day in 2008. IFAD, (2001) asserts that although poverty is a dominant feature of life in all regions of the world and close to 1 billion live in abject poverty in rural areas of the world, in the developing world, 36 per cent of the total population in more than 110 countries is poor people living in rural areas according to International Fund for Agricultural Development, (IFAD, 2001). The determinants of the phenomena remain a subject of heated debate or controversy, which dates back to as early as 18th century (IFAD, 2001).
This research study will only focus on South Sudan in general, and Greater Bor in Jonglei State will be the case study, by focusing on non-monetary poverty. The researcher will use people’s perceptions to identify the poor and CBN approach to construct food and overall poverty lines for analyzing the determinants of poverty.
South Sudan is improving on creating policies for poverty reduction and eradication but it is not most likely to meet the first Millennium Development Goal, which is to Eradicate Extreme Poverty and Hunger, by the year 2015. The economy of South Sudan is one of the world’s most underdeveloped with the country having little existing infrastructure, and the highest maternal mortality, and female illiteracy rates in the world as of 2011.
1
South Sudan is faced with the altered demographics of a post conflict country. The population of women is significantly higher than men with the ratio of men to women of 20 to 39. The population is extremely young, with 52 per cent below the age of 18 years and 72 per cent below 30 years according to National Bureau of Statistics (NBS, 2012). For 72 per cent of households in the country, the main source of income is agriculture (crop farming and animal husbandry). Among the poorest people, 84 per cent depend on agriculture as their main source of income. Even among the wealthiest people, 57 per cent depend on agriculture (World Bank, 2011). Over 53 per cent of the working population is unpaid family workers and only 12 per cent are paid employees (NBS, 2012).
Poverty in South Sudan is deep rooted in the rural than in the urban areas with the poverty headcount in rural areas at 55.4 per cent and yet more than 84 per cent of the total population lives in the rural areas.
Compared with Low Income, Low Middle Income and Sub-Saharan African countries, South Sudan remains the poorest country as evidenced by 50.6 per cent of the population which was living below South Sudanese Pounds 72.9 per person per day in 2011. Although South Sudan’s GNI per capita is greater than those of Low Income and Sub-Saharan African countries, the law of vital few applies where 80 per cent of the total income is in the hands of 20 per cent of the total population. This is as shown in the Table 1.0 showing South Sudan selected socio- economic indicators.
2
Table 1.1: South Sudan: Selected Socio- Economic Indicators. Indicator South Low Low Sub- Sudan Income Middle Saharan Countries Income Africa Countries
Population Population (millions) 8.615 2352 2475 743 Gross National Income (GNI) per Capita (in $) 1050 585 1923 746 Population density (person per square km) 13 83 63 31 Incidence of Poverty National Average 50.6 - - 41.1 Urban average 24.4 - - - Rural average 55.4 - - - Demographic Indicators Total fertility (births per women) 6.2 3.6 2.1 5.3 Crude birth rate (per 1000 people) 46 29 16 40 Crude death rate (per 1000 people) 11 10 7 17 Life expectancy 59 59 71 47 Education Adult literacy rate 16 50 93 53 Female 40 71 85 70 Male 48 78 93 66 Net primary enrolment (%) 59 87 99 86 Students per teacher 52 42 22 48 Health Status Under five mortality rate (per 1000) 135 114 39 163 Infant mortality rate (per 1000) 102 75 31 96 Underweight children under five years (%) 34 - 13 30 Maternal maternity rate (per 100,000 live 2054 684 163 921 births) HIV/AIDS 3.1 Access to Improved Water and Sanitation % of population with access to improved water 31 75 82 56 % of population with access to improved 15 38 57 37 sanitation Source: World Bank 2011
3
As seen from the above table, poverty in South Sudan is still very high as depicted by the population below the poverty line, low literacy rate, low health status, poor access to improved water and sanitation.
1.2. Statement of the Problem Poverty is one of the stylized facts of Sub-Saharan Africa according to Schoumaker (2004). It is a wide-spread phenomenon in South Sudan, but it has got the least attention and consequently there has not been a full-fledged poverty study to date. The government of South Sudan initiated different programmes to address poverty. These programmes include the Interim Country Strategy Paper 2011-2013 which the government adopted as an approach to fight poverty, the Institutional Capacity Building for Poverty Reduction and Good Governance Project (ICBPRGGP), Constituency Development Fund (CDF), Vision 2040 and international support to reduce poverty in the country.
Despite massive international support directed to post war South Sudan, and the government’s concerted efforts to mitigate poverty, it continues to be on the increase. This is because the measures taken to deal with it have done little due to multiple causes from prolonged civil conflict, mismanagement of resources, abuse of power, and rampant corruption coupled with the failure to identify the real underlying determinants of the problem.
In addition, there are a few studies carried out on poverty in South Sudan which have been used to inform the national policy makers and they only concentrated on the national level and dwelled on the poverty measurements, rates, and reduction and eradication policies. These studies include World Bank study on Poverty Profile for the Southern States of Sudan and the study by Adam, et al. (2011). While we know much about poverty measurements and poverty rates from those studies, our understanding of the determinants of poverty in South Sudan remains very limited. This is a serious shortcoming and a major problem that needs to be addressed to better the living conditions of the poor. Poverty reduction and eradication policies require a thorough understanding, and knowledge of the determinants of the phenomenon.
This study therefore aims at analyzing the determinants of poverty in South Sudan, with a case study of Greater Bor in Jonglei State. The study will add to the scarce literature on poverty in South Sudan, fill and bridge the existing knowledge gap.
4
1.3. Research Questions The study seeks to answer the following research questions:
i. What are the major determinants of poverty in South Sudan? ii. What policy recommendations are to be made to reduce poverty in South Sudan? 1.4. Objectives of the Study The general objective of this study is to examine the determinants of poverty in South Sudan and the specific ones are: i. To identify the determinants of poverty in Greater Bor in Jonglei State. ii. To investigate the households’ perceptions of own poverty status to identify the poor. iii. To draw up and provide policy recommendations based on the findings of this research study. 1.5. Scope of the Study The study will try to grasp the households’ perceptions of own poverty status, understanding of poverty situation, the determinants and to provide policy makers with an insight into the issues so that they can align their poverty eradication programmes to households needs for effective poverty alleviation. Greater Bor in Jonglei State was chosen for the research because of the increasing rate of poverty, low effort by the central government to provide development programmes and projects. Although the study will focus on the determinants of poverty in Greater Bor in Jonglei State, the conclusions derived shall be used to generalize the determinants of poverty in Jonglei State and South Sudan as a country.
1.6. The Significance and Justification of the Study There is paucity of analytical studies on poverty situation and determinants in South Sudan at the state levels. However, any government intervention to reduce and eventually eliminate poverty requires a thorough understanding of its determinants.
Analyzing the determinants of poverty is very important for its reduction in the country where the largest part of population lives in abject poverty in general, and for Greater Bor, where most people are poor.
5
This study will contribute to an understanding of poverty from an academic standpoint, especially the determinants of poverty and assist in guiding policymakers in their quest to undertake policies targeting the state levels in the bid to reduce poverty. In addition, the study will contribute to the minimal available literature and data and will act as advocacy material for the poor in South Sudan. Finally, the findings and conclusions of the study may serve as a basis for further research on the subject in the future.
1.7. Organization of the Paper This research paper is organized into five chapters. The first chapter deals with background, statement of the problem, research questions to be addressed, objectives of the study, scope of the study, significance and justification of the study, and organization of the paper. The second chapter dwells on the theoretical and empirical literatures pertinent to the objectives of the study. It concludes with the overview of the literature. While, chapter three exclusively deals with the research methodology pursued, chapter four dwells on the presentation and analysis of data. Finally, the findings, recommendations and conclusions will be presented in chapter five.
6
CHAPTER TWO LITERATURE REVIEW 2.0 Introduction This chapter focuses on the explanation, description and reviewing appropriate general literature of related authors that are relevant to the research work. It introduces the existing knowledge which had already been found out by some other researchers. It reviews the related literature on poverty in terms of definition, measurement, and determinants. The first section of this chapter explores the meaning and measurement of poverty; the second section explores the theories of the causes of poverty, while the third section discusses the empirical literature on the determinants of poverty. Following this is a final section which concludes this chapter with the overview of literature. 2.1 Theoretical Literature This section explores the meaning and measurement of poverty. They are tackled in two subsections as seen below:
2.1.1 Poverty Definition and measurement There are as many definitions of poverty as there are many researchers on this social evil. Defining poverty therefore depends on the context and views of the person giving the definition. Abumere (2004) affirmed this fact by asserting that there are possibly as many definitions of poverty as there are researchers in the field. According to Sen (1999), and as cited in Bradshaw (2006), poverty in its most general sense is lack of basic necessities such as food, shelter, medical care, and safety. Sen (1999) also argues that basic necessities are generally thought necessary based on shared values of human dignity but what is a necessity to one person is not uniformly a necessity to others.
UN (1998) and as cited in Gordon (2005), has a pervasive definition of poverty which involves inability of getting choices and opportunities, a violation of human dignity, lack of basic capacity to participate effectively in society, not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit, insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.
7
According to World Bank (2005), Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. It also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life.
The most commonly used measures in the literature on poverty are; headcount index, poverty gap index, squared poverty gap index. Besides these, Foster-Greer-Thorbecke index and others are also used as measures of poverty. Details of these measurements are given below.
2.1.1.1 Foster, Greer, and Thorbecke (FGT 1984) Measures Kimalu et al., (2002) pointed out that one poverty measure that has been found manageable in presenting information on the poor is the FGT measure developed by Foster, Greer and Thorbecke in 1984. This measure is used to quantify the three well-known elements of poverty: the level, depth and severity. These measures are also known as incidence, inequality and intensity of poverty, respectively. The FGT formula used to measure overall poverty is shown in equation 2.1.
1 q z yi P (y; z) n i1 z ……………………………………………………………2.1
Where, Pα is a measure of absolute poverty, α is the FGT parameter, which may be interpreted as a measure of poverty aversion, α = 0, 1, 2 yi is the total expenditure/ income of household i, expressed in per adult equivalent (i = 1…n), z is the poverty line, n is the total number of households in the sample, q is the total number of poor households and z- th yi is shortfall of income of the i household.
8
2.1.1.2. Headcount Index (P0) P0 measures the proportion of the population falling below the poverty line. It is the most commonly used measure of poverty. It is the ratio of the total number of poor people to the total population. It is calculated using the following formula: