Macroeconomic Policies and Rural Livelihood Diversification: An Ugandan Case-study

Abstract

The economic reform programme initiated in 1987 in Uganda was one of the most ambitious programs of economic liberalization in the African continent. Combining both quantitative and qualitative evidence on livelihood diversification of rural households drawn from the household income surveys conducted by the Uganda Bureau of Statistics and the LADDER village reports, this paper examines the effects of the economic reforms on the livelihoods of rural households. The evidence suggests that economic reforms have had a positive impact on the livelihoods of small-holder farmers in Uganda, many of whom have moved out of poverty in the past decade. While coffee and cotton producers have benefited most from the reforms, the response of the Ugandan agricultural sector to the reforms has been broadbased with increasing production evident both in the cash crops and food crops sectors. The dynamism of the agricultural sector has in turn contributed to rapid growth in non-farm activities in the rural economy in recent years and provided households with greater choices in their livelihood strategies. However, not all the policy measures have contributed positively to livelihood diversification that allows households to move out of poverty. Three constraints to livelihood diversification are identified: the design and implementation of the fiscal decentralisation programme, the availability of agricultural finance and the provision of agricultural advisory services.

Citation

Balihuta, A.M.; Kunal Sen. Macroeconomic Policies and Rural Livelihood Diversification: An Ugandan Case-study. (2001) 28 pp. [LADDER Working Paper No.3]

Macroeconomic Policies and Rural Livelihood Diversification: An Ugandan Case-study

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