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Rural Income Dynamics in Kagera Region, Tanzania

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Rural Income Dynamics in Kagera Region, Tanzania ECONOMIC AND SOCIAL RESEARCH FOUNDATION (ESRF) RURAL INCOME DYNAMICS IN KAGERA REGION, TANZANIA Prepared for the World Bank By Dr Flora Kessy January 2005 Table of Contents LIST OF TABLES ..................................................................................................................II LIST OF ACRONYMS ........................................................................................................ III EXECUTIVE SUMMARY .................................................................................................. IV 1.0 INTRODUCTION........................................................................................................1 1.1 BACKGROUND.............................................................................................................1 1.2 OBJECTIVES OF THE STUDY.........................................................................................2 2.0 THE STUDY AREA ....................................................................................................3 2.1 BACKGROUND.............................................................................................................3 2.2 THE SAMPLE ...............................................................................................................5 3.0 APPROACHES AND METHODOLOGY ................................................................8 4.0 STUDY FINDINGS ...................................................................................................13 4.1 COMMUNITY PERCEPTION OF ECONOMIC MOBILITY OVER TIME..............................13 4.1.1 Factors for Economic Mobility........................................................................13 4.1.2 New Economic Opportunities ..........................................................................18 4.1.3 Summary of the Communities’ Economic Performance ..................................19 4.2 INDIVIDUAL ECONOMIC PROFILES ............................................................................22 4.3 COMMUNITY AND IDIOSYNCRATIC SHOCKS ..............................................................25 4.4 COPING STRATEGIES.................................................................................................29 4.5 COLLECTIVE ACTIONS AND COMMUNITY FORMS OF ORGANIZATION .......................33 4.6 SOME COMMUNITY CHARACTERISTICS.....................................................................39 5.0 CONCLUSIONS AND POLICY ISSUES ...............................................................43 5.1 ECONOMIC OPPORTUNITIES ......................................................................................43 5.2 DOWNWARD PUSHING ECONOMIC FORCES ...............................................................46 5.3 AREAS FOR FUTURE RESEARCH ................................................................................49 REFERENCES.......................................................................................................................50 APPENDICES........................................................................................................................52 ____________________________________________________________________ i Rural Income Dynamics in Kagera Region, Tanzania: A Report Prepared for the World Bank LIST OF TABLES Table 1: Distribution of the population among wards and villages of Kagera region, 2002.......................................................................................................3 Table 2: Kagera region real GDP, and real per capital income, and percent changes in real GDP 1995-2001 ......................................................................4 Table 3: Prevalence of HIV infection among blood donors by district, Kagera region 2000-2002 ..............................................................................................4 Table 4: Characteristics of Upward and Downward Mobile, and Chronically Poor Individuals ......................................................................................................24 Table 5: Categorization and Rankling of Shocks.......................................................26 Table 6: Categories and Ranking of Coping Strategies.............................................29 Table 7: Some Community Characteristics from the Community Questionnaire (2004)...............................................................................................................40 ____________________________________________________________________ ii Rural Income Dynamics in Kagera Region, Tanzania: A Report Prepared for the World Bank LIST OF ACRONYMS AIDS Acquired Immune Deficiency Syndrome BCU Biharamulo Cooperative Union BDRDP Bukoba District Rural Development Program CBD Coffee Berry Disease DRC Democratic Republic of Congo EDI Economic Development Initiative ESRF Economic and Social Research Foundation EU European Union FGDs Focus Group Discussions GDP Gross National Product HESAWA Health, Sanitation, and Water HIV Human Immunodeficiency Virus KADADET Kagera Dairy and Development Trust KAEMP Kagera Environment Management Program KCU Kagera Cooperative Union KDCU Karagwe Development and Cooperative Union KHDS Kagera Health and Development Survey LGA Local Government Authority NGO Non-Governmental Organization PEDP Primary Education Development Program PRIDE Promotion of Rural Initiatives and Development Enterprises PRSP Poverty Reduction Strategy Paper PSLE Primary School Leaving Examination SACCOS Savings and Credit Cooperative Society SPRAA Special Program for Refugees Affected Areas STIs Sexually Transmitted Infections TCRS Tanganyika Christian Refugee Services TShs Tanzanian Shillings1 TzPPA Tanzania Participatory Poverty Assessment UNCEF United Nations Children Fund URT United Republic of Tanzania 1 The exchange rate at the time of survey was about TShs 1,000 per $1. ____________________________________________________________________ iii Rural Income Dynamics in Kagera Region, Tanzania: A Report Prepared for the World Bank RURAL INCOME DYNAMICS IN KAGERA REGION, TANZANIA2 EXECUTIVE SUMMARY BACKGROUND In order to understand factors associated with improved economic situation of households in Kagera, a study on rural household income dynamics was proposed. The broad goals of the study are to: deepen the understanding of the changes in the conditions and characteristics of poverty and rural income generation in the past ten years; better understand the barriers, technologies, institutions, organizations, shocks and opportunities that drive economic mobility; understand the coping strategies adopted for different types of shocks, and the role of various formal and informal arrangements; and to identify (public or private) interventions that reduce household susceptibility to shocks and enhance opportunities for economic advancement. The study draws on earlier data collected in the context of the Kagera Health and Development Survey (KHDS) and work carried out in the context of the Tanzania Participatory Poverty Assessment (TzPPA). Relative to the TzPPA, the proposed study takes a broader perspective by dealing with both impoverishing forces and economic opportunities. The study utilizes the intrinsic values of both qualitative and quantitative data collection and analysis methods to better capture the complexities of rural income dynamics. A series of instruments and exercises are used to capture the views of a wide range of villagers. These include field observations, checklists, and Focus Group Discussions. Four themes were used in soliciting information from the respondents: changes in activity possibility set; identification and sorting of shocks; coping strategies; and potential for collective actions. Four KHDS villages were selected for qualitative research so as to align the qualitative and quantitative data in future accomplishments. These villages have been selected purposively to present a large negative shock, for instance high incidence of HIV/AIDS, positive development, such as, road construction, and differential access to markets resulting from either isolation or being close to town. They were selected from 4 districts of Kagera representing tree crop zone (northern Kagera), lakeshore zone, the middle of the region and the annual crop zone in southern Kagera. 2 The study was undertaken by a Team of researchers based in Dar es Salaam and Bukoba. The study team was headed by Dr. Flora Kessy (Economic and Social Research Foundation), assisted by Mr. Adalbertus Kamanzi (Uganda Martyrs University), Mr. Martin Mlele and Ms. Lillian Kakwesigabo (Associates with ESRF). Technical support from Dr. Hans Hoogeveen (World Bank), Dr. Stefan Dercon (Oxford University), Dr. Joachim de Weerdt (Economic Development Initiative [EDI]), Dr. Rose Mwaipopo (Department of Sociology - University of Dar es Salaam) and Mr. Gerard Howe (Department for International Development) is gratefully acknowledged. ____________________________________________________________________ iv Rural Income Dynamics in Kagera Region, Tanzania: A Report Prepared for the World Bank FACTORS FOR UPWARD ECONOMIC MOBILITY The groups studied, unanimously, agreed that their communities have experienced an upward economic growth in the period of study. Major factors for growth which were highlighted by respondents include: coffee boom and good coffee prices, introduction of new crops such as tobacco, and new economic opportunities such as mining, trading in different merchandise, and formation of groups aimed at helping each other. Livestock was considered
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