NATIONAL POVERTY REDUCTION STRATEGIES AND HOUSEHOLD WELFARE

IN UGANDA: A CASE STUDY OF BUSANZA SUB COUNTY,

KISORO DISTRICT

BY

SEMARIRO NICODEMUS
17/U/8708/EKE/PE

A RESEARCH REPORT SUBMITTED TO THE DEPARTMENT OF ECONOMICS

AND STATISTICS IN PARTIAL FULFILLMENT OF THE REQUIREMENT
FOR THE AWARD OF A BACHELORS OF ARTS IN ECONOMICS OF
KYAMBOGO UNIVERSITY

MAY, 2021

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 DECLARATION

I, Semariro Nicodemus hereby declare that this research report is my original work and that it has
never been presented to any University for any academic award.

SIGNATURE........................................... DATE ……………………………

SEMARIRO NICODEMUS
17/U/8625/EKE/PE

i
 APPROVAL

This is to certify that, Semariro Nicodemus carried out research entitled “National poverty
reduction strategies and household welfare in Uganda: a case study of Busanza sub county,
Kisoro district” under my supervision and this research report meets the basic requirements for
submission.

SIGNATURE.............................................. DATE……………………………

MRS. AYEBARE PENNINAH

(ACADEMIC SUPERVISOR)

ii
 DEDICATION

This report is dedicated to my parents and my family that devoted moral, spiritual and financial
support so as to see me through. They have been great source of motivation and inspiration
throughout my academic life.

iii
 ACKNOWLEDGEMENTS

First and foremost I would like to thank the almighty God for enabling me reach this time of my
education successfully.

I deeply appreciate my supervisor Mrs. Ayebare Penninah a lecturer at the department of

Economics for his unwavering support and professional advice as my supervisor that he shared
with me throughout the period of the study, not forgetting the time he sacrificed for me out of his
tight schedules to supervise my work.

My sincere gratitude goes to all lecturers and staff of Kyambogo University especially the
department of Economics and Statistics for their support throughout my bachelor’s program in
general and in particular this research report. They have added to my knowledge as I pursued my
bachelors of Arts in Economics.

Special thanks go to my family that laid a strong academic foundation upon which I have been
able to reach this far. It was amidst scarcity of resources that they managed to educate me as well
as instilling important core values of hard work, persistence and determination into me.

Finally, I would like to thank everyone including my course mates and friends who contributed
to this study and pray that the almighty God blesses you all thousand folds.

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 TABLE OF CONTENTS

DECLARATION..............................................................................................................................i
APPROVAL....................................................................................................................................ii
DEDICATION...............................................................................................................................iii
ACKNOWLEDGEMENTS............................................................................................................iv
TABLE OF CONTENTS................................................................................................................v
LIST OF TABLES.......................................................................................................................viii
ABSTRACT...................................................................................................................................ix
CHAPTER ONE..............................................................................................................................1
INTRODUCTION...........................................................................................................................1
1.1 Introduction................................................................................................................................1
1.2 Background to study..................................................................................................................1
1.3 Statement of the Problem...........................................................................................................3
1.4 Purpose of the study...................................................................................................................4
1.4.1 Specific objectives of the study..............................................................................................4
1.5 Research questions.....................................................................................................................4
1.6 Scope of the study......................................................................................................................4
1.6.1 Geographical Scope................................................................................................................4
1.6.2 Content Scope.........................................................................................................................4
1.6.3 Time Scope.............................................................................................................................4
1.7 Significance of the study...........................................................................................................5
1.8 Conceptual framework...............................................................................................................5
CHAPTER TWO.............................................................................................................................7
LITERATURE REVIEW................................................................................................................7
2.1 Introduction................................................................................................................................7
2.2 Actual literature review..........................................................................................................7
2.2.1 The Effect of agricultural modernization on household welfare............................................7
2.2.2 The Effect of infrastructural development on household welfare..........................................9
2.2.3 The Effects access to financial services on Poverty Reduction............................................11
2.4 Literature Summary.................................................................................................................12

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CHAPTER THREE.......................................................................................................................13
METHODOLOGY........................................................................................................................13
3.1 Introduction..............................................................................................................................13
3.2 Research design.......................................................................................................................13
3.3 Study population......................................................................................................................13
3.4 Sample Size.............................................................................................................................14
Source: Primary Data.....................................................................................................................14
3.5 Sampling technique and procedure..........................................................................................14
3.6 Data sources.............................................................................................................................14
3.7 Data collection instruments.....................................................................................................15
3.7.1 Questionnaire..................................................................................................................15
3.7.2 Interview Guide...............................................................................................................15
3.7.3 Observation check list...........................................................................................................15
3.8 Reliability and validity of instruments....................................................................................16
3.8.1 Data Validity.........................................................................................................................16
3.8.2 Data Reliability.....................................................................................................................16
3.9 Data collection procedures......................................................................................................17
3.10 Data processing and analysis.................................................................................................17
3.10.1 Quantitative Data Analysis.............................................................................................17
3.10.2 Qualitative Data Analysis...............................................................................................17
3.11 Measurement of research variables.......................................................................................18
CHAPTER FOUR.........................................................................................................................19
PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS...............................19
4.1 Introduction..............................................................................................................................19
4.2 Socio-economic characteristics of study participants..............................................................19
4.3 Agricultural modernization and its effect on poverty reduction..............................................22
4.4 Influence of Infrastructural Development on Poverty Reduction............................................24
4.5 Influence of Access to Financial Services on Poverty Reduction...........................................27
Table 4.6: Influence of financial services on poverty reduction...................................................27
CHAPTER FIVE...........................................................................................................................30
DISCUSSIONS, SUMMARY,CONCLUSIONS AND RECOMMENDATIONS........................30

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5.1 Introduction.............................................................................................................................30
5.2 Discussion of the study findings..............................................................................................30
5.2.1 The effect of agricultural modernization on poverty reduction............................................30
5.2.2 The effect of infrastructural development on poverty reduction........................................31
5.2.3 The effect of access to financial service on poverty reduction...........................................32
5.3 Conclusions.........................................................................................................................33
5.3.1 The effect of agricultural modernization on poverty reduction..........................................33
5.3.2 The effect of infrastructural development on poverty reduction........................................34
5.3.3 The effect of access to financial service on poverty reduction...........................................34
5.4 Recommendations....................................................................................................................35
5.5 Areas for Further Research......................................................................................................35
REFERENCES:.............................................................................................................................36
APPENDIX ONE..........................................................................................................................39
QUESTIONNAIRE FOR HOUSEHOLD HEADS.......................................................................39

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 LIST OF TABLES

ADB: African Development Bank

GDP: Gross Domestic Product
IFAD: International Fund for Agricultural Development
ILO: International Labor Organizations
MDG: Millennium Development Goals
MGLSD: Ministry of Gender, Labor and Social Development
MoFPED: Ministry of Finance, Planning and Economic Development
PEAP: Poverty Eradication Action Plan
PMA: Plan for Modernization Agriculture
UBOS: Uganda Bureau of Statistics
UN: United Nations
UNDP: United Nations Development program

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 ABSTRACT

This study examined the effect of national poverty reduction strategies on household welfare in
Uganda: a case study of Busanza sub county, Kisoro district. The researcher used a cross
sectional survey design to gather data from the selected participants. Both qualitative and
quantitative methods were applied. Qualitative method involved in-depth interviews with key
informants. A representative sample of 165 respondents was selected from a population of 290.
The selection of the sample size was based on the Krejcie and Morgan 1970 table for
determining sample size for research activities.

The findings revealed that there was a positive and significant relationship between agricultural
modernization and poverty reduction. This statistic implied that the efforts towards agricultural
modernization were correlated with poverty reduction in Busanza Sub County, Kisoro district.
As regards the effect of infrastructural development on poverty reduction, the results revealed
that there was a positive and significant relationship between infrastructural development and
poverty reduction. This statistic implied that the impact of infrastructure on poverty reduction
takes the form of first-round effects, followed by subsequent impacts.

Conclusions and recommendations; use of financing programs alone as a tool for welfare
enhancement and empowerment may not achieve much since the fundamental causes of gender
inequality and poverty seem not to have been given adequate and direct attention by the design
and implementation process to programmes. There are other external limitations like necessary
infrastructure in terms of roads, markets, storage facilities, and other policy gaps to peoples’
participation in economic development and therefore the challenges to economic empowerment
which the social policy and programmes must put in consideration.

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 CHAPTER ONE
INTRODUCTION
1.1 Introduction

It is established that 31% of Ugandans live below poverty line, (MGLSD, 2014) the reason for
this state of affair varies from social, economic, political and cultural perspectives. This study
examines the National Poverty Reduction Strategies and Household Welfare in Uganda: a case
study of Busanza Sub County, Kisoro district. Independent variables are National Poverty
Reduction Strategies while Household Welfare is the dependent variable. This chapter presents
background of the study, statement of the problem, purpose of the study, specific objectives,
research questions, significance of the study and scope of the study.

1.2 Background to study

Household welfare can be traced from the Industrial Revolution in European countries. In early
1820s, workers started forming groups to address some of the challenges caused by the
revolution and managers throughout the world have used it to enhance workers’ performance
since then (Kaur, 2012). According to Arena (2013) the concern for household welfare was an
effect of the industrial revolution on workers’ working conditions. The social effects of the
Industrial Revolution on factory workers were at times inhuman as it got workers’ daily life
arranged by factory hours in order to increase productivity. The inhuman effects of the Industrial
Revolution were accompanied by techniques of scientific management that were initiated by
Frederick Taylor. Taylor (1911) (in Arena, 2013) argued that scientific management was a way
to increase workers’ wellbeing, but this claim contradicted the rigidity and bureaucracy imposed
by scientific management.
On the other hand Poverty is one of the serious issues confronting mankind today. It is related
with misery, sicknesses, and death (Seimenis, 2012). A report by the United Nations (2012)
presumed that in excess of three billion individuals on the planet living under outrageous
neediness. Lion's share of individuals is living on not exactly $ 1.25 every day (UN, 2011).
Insights show that Southern Asia 49%, Southern Asia (barring India) 45%, Caribbean 29%,

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Caucasus and Central Asia 6%, Eastern Asia 60%, Latin America 11%, Western Asia 6%,
Northern locales 45%,( UN, 2017).

As indicated by the World Bank (2010), around 47% of Sub-Saharan Africans live on under
US$1 every day and over half of them are from East Africa and Nigeria. All things considered,
poor Africans were assessed to acquire US$0.85 (85 pennies) every day during the last piece of
the 1990s (Human Development Report, 2012; Greenhill et al., 2015). The utilization poverty
line of US$1 every day per individual was created by the World Bank as a global neediness line
to look at the frequency of poverty crosswise over outskirts, while the poverty file was created
by the United Nations Development Program (UNDP) as a proportion of hardship in the three
essential basics of human life that are additionally demonstrated in the human advancement file,
(UNDP, 2014).

In light of $1.25 every day neediness line, about 65% of Sub-Saharan Africa's populace was said
to live in poverty in 2011, (World Bank, 2011). South Africa as of now has a populace of 52.98
million individuals of which 2.5 % are Indians/Asians, 9.0 % Colored's, 8.7 % Whites and 79.8
% Blacks (Stats SA, 2013a:3). It is evaluated that 20. 5 million individuals (46%) in South
Africa lived in neediness in 2000 (Landman, 2003:5). As per Nelson (2010:86), 57% of every
single South African lived in neediness in 2001, which diminished to 48 % in 2008. In any case
it expanded to 54 % in 2010 (Anon, 2010; Segalo, 2011).

According to MoFPED (2018), Uganda’s economy is dominated by three main sectors namely:-
Service, agriculture and industry were agricultural sector is the most significant employer in the
economy. Furthermore, it employs most of the economy’s population with significant proportion
34% of the poor who live in rural areas, (UBOS, 2018). The players in this sector are mainly
engaged in subsistence production, with very limited orientation towards commercial agriculture.

In 2011, Uganda Bureau of Statistics estimated the population of Busanza at 42600 people. Like
any sub county, Busanza is characterized by poverty, underdevelopment and unplanned
infrastructure (Waiswa, 2013). Busanza is an agricultural society with emphasis on food crops
like sorghum, maize, sweet potatoes and beans making up the mantle of the economic activities
of the sub county. The sub county has a mandate to bring service closer to the people and
improve their standard of living with the main emphasis on reducing poverty. Many programs

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have been put in place to reduce poverty for example NAADS program, Plan for Agriculture
Modernization. The issue of welfare and its effect on household is a pertinent issue for education
scholars, policy makers, education practitioners, poverty eradication, economic development
experts and employers. If the issue of welfare and its effect on households is not treated with the
seriousness it deserves through scientific research in order to inform policy, then the desire to
have quality improved standard of living in Busanza Sub County may become foreclosed (GoU,
1992).It is against on this background that the study will examine the national poverty reduction
strategies and household welfare in Busanza sub county, Kisoro district.

1.3 Statement of the Problem

Household welfare is considered vital because the quality of household is crucial to any society
(Kitunga, 2009; Tao, 2013). Uganda has embarked on a major transformation with a vision to
move from a peasant society to a modern and prosperous country by 2040, and welfare
improvement is seen as a key factor for the achievement of this objective (Nsubuga, 2008,
Ochwo, 2013).

The government has come up with various strategies to improve household welfare, for example
provision of improved seeds to rural households, improved livestock. If the issue of welfare and
its effect on households is not treated with the seriousness it deserves through scientific research
in order to inform policy, then the desire to have quality improved standard of living in Busanza
Sub County may become foreclosed (Duze, 2011, Roseline, 2015).

Despite the above, welfare of households in Busanza Sub County has remained poor as it is
characterized by poor housing facilities, inadequate medical facilities, low level of education and
poor employment statuses (Nairuba, 2011; Wandira, Onen & Kimoga, 2015), Poverty levels
have continued to rise, from 35% in 2009-38% in 2013 (Muhwezi, 2013). According to World
Bank (2011), the gap between the rich and the poor is also high and poverty is manifested in
uneven distribution and low levels of income, low levels of education, malnutrition and poor
sanitation, rural infrastructure has almost deteriorated, farming has languished, food systems
have stagnated, and inequalities have deepened, (UNDP, 2012; MGLSD, 2014). It is against
background that the researcher will examine the national poverty reduction strategies and
household welfare in Uganda: a case study of Busanza Sub County, Kisoro district

3
1.4 Purpose of the study

The purpose of the study is to examine National Poverty Reduction Strategies and household
welfare in Uganda: a case study of Busanza Sub County, Kisoro District.
1.4.1 Specific objectives of the study
i. To examine the effect of agricultural modernization on household welfare in Busanza
Sub County, Kisoro district.
ii. To establish the effect of infrastructural development on household welfare in Busanza
Sub County, Kisoro district.
iii. To assess the effect of access to financial service on household welfare in Busanza Sub
County, Kisoro district.
1.5 Research questions

i. What is the effect of agricultural modernization on household welfare in Busanza Sub

County, Kisoro district?
ii. What is the effect of infrastructural development on household welfare in Busanza Sub
County, Kisoro district
iii. To what extent does access to financial services contribute to household welfare in
Busanza Sub County, Kisoro district
1.6 Scope of the study
1.6.1 Geographical Scope
The study will be conducted in Busanza Sub County, Kisoro district located in South West of
Uganda. It is bordered by Ntungamo district, 10km from Rubare Town Council in the East,
Republic of Rwanda in the West.
1.6.2 Content Scope

This study will focus on the effect of agricultural modernization on household welfare,
infrastructural development and the effect of financial services on household welfare in Busanza
Sub County, Kisoro district.
1.6.3 Time Scope

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The study will consider literature of 8 years that is 2010-2019 so as to deeply analyze the
problem of study. This period is chosen because according to World Bank, (2017) indicated that
the gap between the rich and the poor is also high in terms of welfare and this is manifested in
terms of uneven distribution of income, low levels of education, malnutrition and poor sanitation,
rural infrastructure has almost deteriorated, farming has languished, food systems have
stagnated.
1.7 Significance of the study

The study finding are expected to serve as a basis for future researchers and other research users
who may venture into similar area of assessing the “determinants of rural poverty in Busanza
Sub County, Kisoro district.
The findings are hoped to provide information for academicians, policy makers, social workers
and researchers for input in a policy formulation process and could influence the improvement of
service delivery in Countries with similar settings.
The study findings are expected to help the researcher fulfill one of the requirements for the
award of a Master’s degree in Public Administration at Uganda Management Institute.
1.8 Conceptual framework

As indicated by Katarina, (2013) Conceptual Framework is a diagrammatic introduction of the

connection among reliant and free factors. In this investigation, the dependent variable is
household welfare which will be estimated as far as education level, household income,
employment level and health status while independent variable is the national poverty reduction
strategies which include agricultural modernization, infrastructural development and finance
service as presented beneath.
National Poverty Reduction Strategies (IV)
Agricultural Modernization:
 Improved technology
adoption
 Improved seeds and
Live livestock
Household Welfare (DV)
Infrastructural development:
 Improved Education level
 Improved roads  Increased Household income
 Construction of feeder  Increased Employment level
roads 5  Improved Health status
 Financial services
 Financial literacy
Figure 1.1: A conceptual framework showing the relationship between national poverty
 Loans
reduction strategies and household welfare.
Sourced: Adopted from (NDP, 2011 & MoFPED, 2014) and modified by the researcher
2020
In the case of Busanza if it is to use tractors, human powered and animal powered implements,
irrigation systems, food processing and related technologies, new seed varieties and equipment,
household income would increase. Adoption of agricultural technologies can reduce poverty both
directly and indirectly in Busanza. The direct effects include the productivity gains and low cost
of production which can improve house income of people in Busanza while the indirect benefits
from the technology adoption may come in the form of increased supply of agriculture products
which may lower food prices in Kisoro district. Adoption of improved technology has been
identified as a key measure towards achieving food security (Langyintuo et al., 2016). Peasant
farmers have the potential to enhance their welfare as well as their food security situation if they
make use of improved agricultural technologies (Mendola, 2007).

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 CHAPTER TWO
LITERATURE REVIEW

2.1 Introduction

This section portrays the recent review or writings by diverse scholars, including Journals,
articles, internet sources, publications, text books, magazines, and others. This segment offers the
theoretical assessment, thematic literature reviewed objective by objective and the summary or
literature gap.
2.2 Actual literature review
2.2.1 The Effect of agricultural modernization on household welfare

According to kivumbi (2013), in planning for rural areas in relation to household welfare,
participatory approach must be considered and this at least has three elements; there must
systematic knowledge of the strengths and weakness of the local area, strong and committed
local leaders, and need for effective consultation process of the major stakeholders in area among
the businesses, community group, educators, who must at the end support the planned investment
and other important social and economic changes to take place.

In the case of South Africa, kivumbi (2013) argues that for agriculture modernization to benefit
households, it is important that policies that minimize health and environment risks must be
implemented and the cultivators should have access to agricultural research, technical services,
credit facilities and training. Other incentives include improved distribution and marketing to
reduce spoilage of fresh food.

According to Bilala (2013) in his paper presented at Makerere university on livelihood

programmes noted that livelihood programmes may call for diffusion of new technology which
is a matter of policy concern, especially because not all farm households have equal access either
to knowledge to use new technology or financial resources needed to make it productive on their

7
own farms. Some inputs are lumpy and cannot be used efficiently on farms of even average size
in many parts of the world.

Agriculture innovation appropriation is the utilization of mechanical innovation and expanded

capacity to agribusiness (Moyo et al. 2015). It includes utilization of tractors, human controlled
and creature fueled actualizes water system frameworks, nourishment handling and related
advancements, new seed assortments and hardware. Reception of rural innovations can diminish
neediness both straightforwardly and in a roundabout way (Becerril and Abdullah, 2010; Moyo
et al. 2015). The immediate impacts incorporate the profitability gains and minimal effort of
generation which can improve pay of the adopters while the roundabout advantages from the
innovation appropriation may come as expanded stockpile which may bring down sustenance
costs. Appropriation of improved innovation has been recognized as a key measure towards
accomplishing sustenance security (Langyintuo et al., 2016).

On a basic level, improved harvest assortments are scale-nonpartisan and can be embraced by
homesteads everything being equal, yet the equivalent isn't in every case valid for different
advances or of corresponding sources of info like water system and machines, and access to
composts and credit. On the off chance that foundations that give these administrations and
information sources are one-sided for enormous homesteads, the poor will most likely be unable
to receive new innovations (Javier, 2017).
Results for non-land wealth indicators such agricultural and non-agricultural asset are also in line
with expectations and with the existing literature. Household with higher agricultural and non-
agricultural assets have higher agricultural productivity, which may indicate that wealthier
households are more able to finance the purchase of their farm technology inputs which is
consistent with the other findings (e.g., Asfaw et al., 2016; Peterman et al., 2011). As for inputs
use, we find that labor allocated to agriculture production measured in terms of person days has a
positive and significant effect on land productivity. The elasticity of land agricultural
productivity to person days devoted to agricultural production is about 11%. Similarly, fertilizer
use and application of herbicide have significantly positive effect on agricultural productivity.

During the most recent decade the nation has seen unobtrusive increments in agrarian generation
principally as aftereffect of increment underway region and to a constrained degree, utilization of
improved innovation. Nonetheless, these increments have not come about into expanded benefit

8
of farming creation and family wages. This has been fundamentally because of low appropriation
of existing advancements (Nsibambi, 1995; Benin et al, 2017). Specifically, poverty in most
creating nations is to a great extent a consequence of low farming efficiency emerging from
exceptionally low use of present day information sources and innovation.

The effect of agriculture modernization on improving welfare relies upon the cooperation of a
few impacts. Above all else, the immediate impact of development in the agriculture segments to
raise salary levels of those utilized in the segment. Second, how much the destitute individuals
profit by agrarian development relies upon the pace of interest of the poor in horticulture. This
depends, thus, on the kind of agribusiness in a specific area. For instance, in profoundly
automated farming, the investment of poor people and incompetent individuals might be
negligible. Then again, in subsistence agribusiness, or in foods grown from the ground
cultivating, the pace of interest of poor people might be moderately high. As noted above,
Loayza and Raddatz (2010) underlined the significance of the power of incompetent work use in
farming in deciding its capacity to diminish neediness.

2.2.2 The Effect of infrastructural development on household welfare

In Latin America, Estache, Foster, and Wodon (2012) investigated the connection between
infrastructure development and household welfare. In the wake of assessing information on both
large scale and microeconomic associations between infrastructure development and household
welfare lightening, Estache et al. (2012) reasoned that privatized framework advancement would
in general lighten household conditions if the poor could stand to take an interest in the
advantages (access to employments, and so on.). Stivastava and Shaw (2013) broke down the
impacts of various types of open ventures on development and country neediness in different
Chinese regions and presumed that street foundation had the biggest effect on poverty when
contrasted with provincial training, broadcast communications, water system, agrarian innovative
work, control age, and focused on poverty easing.
Transportation development has for quite some time been considered by numerous individuals as
a subset or segment of the capital, the establishment that supports all creation capacities.
Verifiably, volumes of crude materials sent to the plant just as of completed products dispatched

9
to the market in an opportune way rely upon the accessibility and nature of provincial
transportation foundation (Kustepeli et al., 2012; Na, et al., 2013).

Be that as it may, for a significant part of the twentieth Century, transportation framework
venture was one of the least perceived subfields of monetary advancement, and it was for all
intents and purposes disregarded as an investigative segment in the early improvement of
financial writing, in which capital is undifferentiated and usually spoken to by manufacturing
plants (Bagchi and Pradhan, 2013; Osayomi, 2013; Prud'homme).

Various contemporary investigations have added to current learning concerning transportation

foundation as a facilitator of a household income (Calderon and Serven, 2008). Transportation
foundation underlies the more unmistakable types of capital, encouraging the conveyance of
contributions to spots of creation; and the conveyance of completed merchandise to commercial
centers. Transportation foundation underpins different social administrations, giving access to
schools, emergency clinics, and work environments (Bagchi and Pradhan, 2013; Lakshmanan,
2011). Given the capital-serious nature of transportation foundation frameworks and the
expanding shortage of assets for capital concentrated tasks, it is critical to comprehend the
impacts of transportation foundation ventures on the financial movement of a creating nation
(Masarova and Iyanova, 2013).

In other studies reported in Brennerman and Kerf (2016), improved investment in physical
infrastructure services contributes to the expansion of opportunities for inclusive growth
processes, generalized growth in productivity and the transformation of rural economies. Indeed,
other analysts such as the AfDB (1999), AfDB (2010) and the AFD/ World Bank (2010) reiterate
this view and further submit that significant improvement in infrastructure access is paramount
for scaling up access to regional markets and competitiveness of developing economies in the
global economy. More recently, Stiglitz (2011) has observed that poor infrastructural services in
third world economies remain the most pervasive internal barrier to international trade.
Compared to more traditional, artificial barriers such as tariffs and custom regulations from
trading partners, the author suggests that poor roads, ports and other production structures
presents more critical constraints to the capacity of developing economies to exploit
opportunities from international trade and commerce. This evidence, Stiglitz (op. cit.) argues,

10
provides the justification for a shift in paradigm in international development policy towards Aid
for Trade in the south.

Khandker and Koolwal (2015) examines the impact of rural roads in the long run by using
household level panel data from Bangladesh between 1997and 2005. They estimate the benefit of
road projects on consumption expenditure before and after the project in control and treatment
villages. Results from GMM estimation show positive and significant outcomes of roads on per
capita expenditure in the short-run especially for extremely poor households. However, in the
long-run large benefit will be accrued to higher-income groups due to the increasing rate of
return to rural investments and expansion of non-farm employments. They also identified the
initial difference in the households’ characteristics and quality of roads determines the long-run
impact of the roads.

2.2.3 The Effects access to financial services on Poverty Reduction

Past investigations, for example, that of (Mondal, 2015) had set up the connection between
money related consideration and improving house conditions. Different investigations, for
example, Lal (2018) and Mubiru (2012) product ready to build up a positive connection between
budgetary administrations and welfare. A large portion of the past investigations are reasonable
in nature, and few of them that are tried experimentally are little in extension. The nature and
degree of "Effect of Financial administrations on destitution easing the directing impact of
microfinance" stayed immaculate in the current writing. Along these lines, the previously
mentioned hole in the writing required the present work which can demonstrate to be a resource
for the policymakers and the partners of agreeable banks both at the national and universal level.

The consideration of specialists, approach producers, and advancement arranged organizations

on money related administrations has kept on expanding particularly been it an apparatus for
monetary improvement, especially in the region of improving welfare and general way of life,
riches creation, work age, and neediness decrease (CBN, 2018). The World Bank (2014)
contends that entrance to and utilization of essential budgetary administrations like reserve
funds, installments, advances, and protection, causes the poor to move out of neediness by
monetarily and socially engaging them.

11
On a basic level, improved harvest assortments are scale-nonpartisan and can be embraced by
homesteads everything being equal, yet the equivalent isn't in every case valid for different
advances or of corresponding sources of info like water system and machines, and access to
composts and credit. On the off chance that foundations that give these administrations and
information sources are one-sided for enormous homesteads, the poor will most likely be unable
to receive new innovations (Javier, 2017).
Results for non-land wealth indicators such agricultural and non-agricultural asset are also in line
with expectations and with the existing literature. Household with higher agricultural and non-
agricultural assets have higher agricultural productivity, which may indicate that wealthier
households are more able to finance the purchase of their farm technology inputs which is
consistent with the other findings (e.g., Asfaw et al., 2016; Peterman et al., 2011). As for inputs
use, we find that labor allocated to agriculture production measured in terms of person days has a
positive and significant effect on land productivity. The elasticity of land agricultural
productivity to person days devoted to agricultural production is about 11%. Similarly, fertilizer
use and application of herbicide have significantly positive effect on agricultural productivity.

A well-created money related framework can successfully improve household welfare (Mondal,
2015). Access to money related administrations empowers the poor to battle the different
components of welfare and make improvement in their lives and gives force to development and
advancement (Avais, 2014). Money related incorporation through helpful banks is the way to
strengthening of poor, oppressed and low-gifted country family units (Jaiswal and Bhasin, 2015).
Through money related consideration, microfinance banks increment the financial open doors for
poor people and low-pay individuals, which lead towards a constructive outcome in social
advancement, monetary improvement, monetary strengthening and social/political/legitimate
strengthening (Mondal, 2015).

2.4 Literature Summary

It is important to indicate that most of the research studies were conducted on a national scale.
Poverty Alleviation Strategies were employed at all levels. But welfare of households is still
continuing to be the greatest problem in the society. Most of the studies conducted do not take
into account the views of local women and traditional leaders take into consideration. Women
are a category most affected by poverty and their input as to how to deal with poverty might be

12
of help in trying to improve on their household welfare. Traditional leaders have a history of
leading their own people, knowing what is right and wrong for them; their view point on the
strategies to be employed to improve the standards of living of people in the society

CHAPTER THREE
METHODOLOGY

3.1 Introduction

Franklin (2012) defines methodology as the systematic, theoretical analysis of the procedures
applied to a field of study. It comprises the theoretical analysis of the body of methods and
principles associated with a branch of knowledge. This chapter will cover the research design,
study population and area, sampling technique, data collection technique, sampling size and
selection, data collection methods, sources of data, quality control, data analysis, data processing
and limitations.
3.2 Research design
The researcher will use a cross sectional survey design to gather data from the sample population
at any particular time, because it will permit collection of information from a sample drawn from
a predetermined population. Both qualitative and quantitative approaches will be applied.
Qualitative method will involve in-depth probing and application of subjectively interpreted data
(Bailey, 2012). Qualitative research will enable the researcher to gather in-depth information
about the study, for example unstructured qualitative interviews will serve this purpose.
Qualitative approach will be justifiable as it will help in the generation of non-numerical data,
from the respondent’s views, opinions, attitude towards the study.

Quantitative method will provide data necessary to test the hypotheses. Creswell, (2013) states
that quantitative methods are plans for carrying out research oriented towards quantification and
are applied in order to describe current conditions or to investigate relationships, including cause
and effect relationships. Qualitative approaches refer to approaches that center on exploring

13
meanings, emotions, intentions and values (Clifford, et al, 2010). It entails key informant
interviews, and observations. It narrates the meaning of the world by others (Clifford et al,
2010).

3.3 Study population

According to Silverman (2013), study population is a whole collection or the universe of all
members or units of a group that is concerned in particular study. The whole population will
compose of 170 respondents from Busanza Sub County in Kisoro district

3.4 Sample Size

Sample size is a subset of the target population which is used in the study (Sekaran and Bougie,
2016). The sample size will consist of 159 respondents as per Krejcie & Morgan (1970).
Table 3.1: Showing Sample Size of respondent

Respondents Population size Sample size Sample technique

Household heads 100 95 Simple random sampling
Youths 60 54 Simple random sampling
Local leaders 10 10 Purposive sampling
Total 170 159
Source: Primary Data
3.5 Sampling technique and procedure

Simple random sampling is a strategy that adds credibility to a sample when the potential
purposeful sample is larger than one can handle whereby it uses small sample sizes, thus the goal
is credibility, not representatives or the ability to generalize (Patton, 2001). Simple random
sampling technique will be employed so as to eliminate bias by giving all respondents equal
chance to be chosen (Moore and McCabe, 2006).
Purposive sampling will be used so as to ensure a representation in the entire sub county. This
method will be used to select leaders who are knowledgeable about or experienced with a
phenomenon of interest (Creswell & Plano, 2013).
3.6 Data sources

14
Both primary and secondary data will be used. According to Sekaran (2013), Primary data will
be collected for the first time from the field. Secondary data will be obtained through reviewing
textbooks, journals, articles, magazines, newspapers, reports about poverty, presentations
concerning the subject matter to extract the required information to answer the research
questions.

3.7 Data collection instruments

3.7.1 Questionnaire

A questionnaire is a data collection instrument used to gather data over a large sample or number
of respondents (Barifaijo, 2010). Questionnaire will be developed according to the objectives of
the study. Quantitative questions will be close-ended and ranked on a five point Likert Scale
(where1=Strongly Disagree, 2=Disagree, 3= Not Sure, 4=Agree and 5=Strongly Agree) to
provide options of answers to questions that will be formulated, as recommended by Robbins
(2008). Questionnaire as a method of data collection will be used because it is less expensive
compared to other methods of data collection. It is also filled at the respondent’s convenience,
hence increasing the chance of getting valid information. It also covers a wide geographical area
since the researcher’s approach responds more easily through questionnaire than any other
method (Amin, 2005).

3.7.2 Interview Guide

An interview guide is a set of questions that the researcher asks during the interview
(Yin, 2010). The researcher will design an interview guide which will be used during the
interview of the key respondents at the directorate. The researcher will pose questions that will
help respondents give data to meet the objectives of the study and probe them in order to seek
clarification about responses provided. A structured interview guide will be used for the local
leaders to stimulate them into detailed discussion about national poverty reduction strategies. As
a research tool, the interviews will be carried out with definite purposes of obtaining certain

15
information by means of the spoken word. In addition, the interviews will give an opportunity to
the researcher to revisit some of the issues that may be an over-sight in other instruments and yet
they are deemed vital for the study.
3.7.3 Observation check list

In this exercise a list of items that indicate the nature, level of poverty in household like nature of
house, sanitary nature, dressing, eating habits, access to social services and economic potentials
will be used in evaluating each of the selected household in the selected study area. Observation
shall provide a wide scope of examining the status and also in evaluating the responses provided
by the respondents whether they are tailed with the situation on the ground.

3.8 Reliability and validity of instruments

3.8.1 Data Validity

This refers to the extent to which results can be accurately interpreted and generalized to other
populations (Oso and Onen, 2008). These writers further define validity as the extent to which
instruments measure what they are intended to measure.

This approach measured the degree to which the test items will be represented the domain or
universe of the trait or property being measured. In order to establish the content validity of a
measuring instrument, the researcher will identify the overall content to be represented. Items
will be randomly chosen from this content that will accurately represent the information in all
areas. By using this method the researcher will obtain a group of items which will represent the
content of the trait or property that will be measured
n
CVI =
N
W h ere CVI =content validity
n=number of items indicated relevant .
N=total no . of items∈t h e questionnaires
38
= 0.53
73

3.8.2 Data Reliability

16
According to Sekaran (2013), reliability is consistency of measurement or the degree to which an
instrument measures the same ways each time it is used under the same condition with the same
subjects. The instrument whose validity will be tested and assured already will be tested for
reliability through carrying out a pre-test or pilot study. Cronbach’s coefficient alpha (a) as
recommended by Amin, (2005, P.302) will be used to test the reliability of the research
instrument. The instrument is deemed reliable if reliable of 0.7 and above is obtained and
therefore, it will be adopted for use in the data collection.
Formula for reliability is

(
∑ SD I
)
2
k
α= × 1−
k −1 2
SD t
Where ∝ = alpha reliability co efficiency.
K=Number of items included in the questionnaire
2
∈ S D I = sum of variance of individual items
2
S D t = variance of all items in the instrument.

α=
38
38−1 (
× 1−
7.7460
50.467 )
=0.888

3.9 Data collection procedures

The following procedures will be followed during data collection: An introductory letter from
Uganda Management Institute will be obtained by the Researcher after developing a research
proposal under the guidance of the supervisor that will introduce her to the relevant respondents
in Busanza Sub County. The Researcher will get permission from the authorities in the Sub
County whom questionnaires and interview guides will be administered according to the sample
size. The questionnaires will be administered by the researcher herself, filled by the respondents
and returned in due course. The Researcher will make appointments to conduct interviews with
key informants at their convenient times. Interview guides will be given personally whereby
face-to-face interviews will be held with the senior in the district who is more knowledgeable
about rural poverty.

3.10 Data processing and analysis

17
3.10.1 Quantitative Data Analysis

Manual editing of questionnaires will be done to eliminate errors. After coding, tabulation will
be done to clearly present various responses and the interpretation. Frequencies and percentages
will be used in tabulation to portray statistics used to analyze and interpret the findings of the
study using statistical packages like Microsoft excel and SPSS (Statistical Package for Social
Scientists). The Pearson correlation coefficient will be used to test the relationship between the
independent and the dependent variable and a regression will be run to determine the extent to
which the independent variables affect the dependent variable.

3.10.2 Qualitative Data Analysis

Analyzing qualitative data will involve labeling and coding all in order to recognize their
similarities and differences. Content analysis will be used to categorize verbal or behavioral data,
for purposes of classification, summarization and tabulation to make sense of the data collected
and to highlight the important messages, features or findings.

3.11 Measurement of research variables

The question will consist of four sections: section A for demographic data of respondents,
Section B for collection of data on national poverty strategies (IV) and DV which is household
welfare. The questionnaire will constructed on a five-point Likert scale (1 = Strongly Agree;
2=Agree; 3 = Neutral; 4 = Disagree; 5= strongly disagree). In analyzing responses from the
Likert scale of the questionnaire, mean and standard deviation will be generated by use of
Statistical Package for Social Scientists (SPSS) and an appropriate scale to interpret the means
will be (4.1-5; Very high effect, 3.1-4.0; High effect, 2.1-3.1; Moderate effect, 1.1-2.1 Low
effect and less than -1; Very low effect).
The researcher will use a nominal scale of measurement which applies to some common set of
characteristics such as sex, age, level of education, category of respondents, among others

18
 CHAPTER FOUR
PRESENTATION, ANALYSIS AND INTERPRETATION OF RESULTS
4.1 Introduction

This chapter contains the results obtained after analyzing data in the study which sought to
examine the effect of National Poverty Reduction Strategies on household welfare in Uganda in
Busanza Sub-County, Kisoro District as a case study. This chapter therefore presents, response
rate, demographic characteristics of participants; the descriptive statistics for the variables under
study that is the correlation and regression results, analyzed and interpreted according to the
objectives of the study.

4.2 Socio-economic characteristics of study participants

The relevance of any research basically depends on the socio-economic characteristics of the
respondents as it forms the basis of decision making. A clearer understanding of the socio-
economic characteristics of the research participants can therefore not be over emphasized. It is
in the light of these facts that the socio-economic background of the respondents, in terms of
gender, age, education, marital status, and educational status were investigated.

19
Table 3.2: Demographic characteristics of the respondents

Characteristics Frequency Percent

Gender
Female 78 49.1
Male 81 50.9
Age of respondent
Below 30 47 29.6
31 – 40 years 44 27.7
41 – 50 years 37 23.3
51 and above 31 19.4
Level of education
Certificate 59 37.1
Diploma 8 5.0
Bachelor’s degree 1 0.6
Master’s degree 1 0.6
Informal education 90 56.7
Marital Status
Single 30 18.9

20
 Married 121 76.1
Divorced 8 5
Source: Primary Data (2021)

The results in Table 4.1 above indicate that 78 (49.1%) of the respondents were female and 81
(50.9%) of the respondents were male and hence slightly more than half of the participants. This
means that there were relatively more male than female in the study. This meant that the
involvement of more male in government strategies on the welfare of the people is important
since it directly offers knowledge on relevance of budget allocation towards poverty reduction
strategies, as well as become less economically dependent.

Age is an important demographic variable and is a primary basis of demographic classification in

vital statistics, censuses, and surveys (URT, 2005). The results in Table 4.3 above indicate that
out of 159 respondents, (47) 29.6% were below the age of 30years, (44) 27.7 % were in the age
bracket of 31 – 40 years, (37) 23.3 % were in the age bracket of 41 – 50 years and (31) 19.4 %
were in the age bracket of 51 and above years. The results indicate that the largest number of
respondents falls in the age bracket of below 30 years so they were energetic to engage in
government programs. This finding is consistent with results from the study commissioned by
ILO in 2003 that revealed that, about two thirds (70%) of the participants were aged between 25-
31.

The Educational status of respondents plays a major role in the success of their businesses. The
analysis by level of education shows that overall; 90 (56.7%) of the respondents had accessed
informal education while only 59 (37.1%) of the respondents had attained Certificate level and 8
(5.0 %) had attained Diploma level of education. As a result of having low level of education,
most people are found to be disadvantaged in relation to access to the economic resources such
as credit facilities. Education is always valued as the means of liberation from ignorance and
enables one to perform effectively in the economic activities.

In relation to marital status information from this study indicated that, about 30 (18.9 %) of the
respondents were single whiles 121(76.1%) were married and 8(5 %) were divorced The marital
status of respondents is directly linked to their living conditions as the responsibility to perform

21
certain duties, like housekeeping, children’s education and provision of good health for the
family is associated with one’s marital status. Divorced/Separated parents mostly performed their
roles as single parents which normally affect their living conditions

4.3 Agricultural modernization and its effect on poverty reduction

The results in the table below represent the participants’ perception on the influence of
agriculture modernization on poverty reduction. Agricultural modernization was assessed in
terms of use of fertilizers, improved seeds, irrigation and use of mechanized systems among
other things.
Table 4.3: Influence of agriculture modernization on poverty reduction

Statements SA A N D SDA
The use of improved seeds increases 85 9 14 14 6
farm’s output (53%) (24%) (8%) (8%) (4%)
The use of mechanized systems 99 9 14 14 6
improves agricultural productivity (62% (24%) (8%) (8%) (4%)
Demonstration farms improves 72 48 17 17 2
agricultural productivity (45%) (30%) (10%) (10%) (1.3%)
Farmers are trained on improved 68 48 17 17 2
seeds and breed which increases (42%) (30%) (10%) (10%) (1.3%)
output

22
 Agricultural extension services have 99 55 17 17 2
increased framers access (62% (34%) (10%) (10%) (1.3%)
Source: Primary Data (2021)

Findings of this study revealed that, on sub component use of improved seeds increases farm’s
output majority of the respondents 53% strongly agreed with the statement, 24% agreed, 8% of
the respondents were neutral and 12% disagreed with the statement.
As to whether the use of mechanized systems improves agricultural productivity, majority of the
respondents 62% strongly agreed with the statement, 8% of the respondents were neutral and
14% of the respondents disagreed with the statement.
On the question demonstration farms improves agricultural productivity, 45% of the respondents
strongly agreed with the statement, 10% were neutral and 10% of the respondents strongly
agreed with the statement.
As to whether farmers are trained on improved seeds and breed which increases output, 42% of
the respondents strongly agreed with the statement, 30% agreed, 10% were neutral and 10% of
the respondents strongly disagreed with the statement.
On sub component agricultural extension services have increased framers access 62% of the
respondents strongly agreed with statement, 10% were neutral and 10% disagreed with the
statement respectively.

Table 4.4: Correlation Matrix for agricultural modernization and poverty reduction

Agricultural Poverty Reduction

modernization
Pearson Correlation 1 .586**
Agricultural
Sig. (2-tailed) .000
modernization
N 159 159
Pearson Correlation .586** 1
Poverty Reduction Sig. (2-tailed) .000
N 159 159
**. Correlation is significant at the 0.01 level (2-tailed).

23
The results in table 4.5 show correlation (r = 0.586, p<0.01) implying that there was a positive
and significant effect between agricultural modernization and poverty reduction in Busanza Sub
County, Kisoro district. This statistic also implied that the efforts towards agricultural
modernization need to be intensified to reduce poverty in Busanza Sub County, Kisoro district. It
was noted that when government allocates more financial resources, food security can be
enhanced either through market participation, agricultural productivity growth (through the use
of improved technologies) or both. However, the use of improved technologies remains
extremely low and access to agricultural services decreased in recent years, hence the yields also
remain low.

4.4 Influence of Infrastructural Development on Poverty Reduction

Table 4.8: Infrastructure development on poverty alleviation

Statements SA A N D SDA
Privatized infrastructure development 31 59 47 14 8
tended to alleviate poverty if the poor (19.5%) (37.1%) (29.6%) (8.8%) (5.0%)
could afford to participant in the
benefit
Transport investment has been 59 62 24 10 2
considered by many sub component of (37.1%) (39.0%) (15.1%) (6.3%) (1.3%)
the capital, the foundation that
underpin the production function
Transport infrastructure underlies more 66 54 17 15 2
visible form of capital facilitating the (41.5%) (34.0%) (10.7%) (9.4%) (1.3%)
delivery of inputs to place of
production and delivery of finished
goods to the market place
Infrastructure development has been 86 64 3 1 0
championed as the cure for poverty (54.1%) (40.3%) (1.9%) (0.6%) (0%)

24
 Improved road network increases 60 63 29 5 5
productivity and market access (37.7%) (39.6%) (18.2%) (3.1%) (3.1%)
Source: primary data (2021)

From the table above, majority of the respondents 37% agreed that privatized infrastructure development
tended to alleviate poverty if the poor could afford to participant in the benefit, 19% strongly
agreed with the statement, 29% were neutral, and 8% disagreed with the statement. One of the
participants had this to say; -
“Provides access to district headquarters for information & knowledge, alleviate poverty
by providing quick access to markets, availability of infrastructure reduces on poverty
rate in community by connecting farmers to market for income, they provide employment
opportunities for local people by the farm owners, it reduces on high cost of transport,
yes more employment opportunities hence alleviation of poverty, easy transportation of
goods which creates market for local goods”
On the question transport investment has been considered by many sub component of the capital,
the foundation that underpin the production function, 39% of the respondents agreed with the
statement, 37% strongly agreed with the statement, 15% of the respondents were neutral and 6%
strongly disagreed with the statement.

As to whether transport infrastructure underlies more visible form of capital facilitating the
delivery of inputs to place of production and delivery of finished goods to the market place, 41%
of the respondents strongly agreed with the statement, 34% agreed, 10% of the respondents were
neutral and 9% disagreed with the statement.

On sub component infrastructure development has been championed as the cure for poverty, 54%
of the statement, strongly agreed with the statement, 40% of the respondents agreed with the
statement, 1% of the respondents were neutral respectively

As to whether improved road network increases productivity and market access, 37% of the
respondents strongly agreed with the statement, 39% agreed, 18% of the respondents were
neutral and 3% disagreed with the statement. One of the households revealed that
“…Road infrastructure for example gives access to market for agricultural produce,
accessibility to natural amenities, accessing quick health services from hospitals and

25
 clinic, availability of electricity leads to urbanization, availability of medicine enables
development of Busanza, availability of water leads to industrialization, easy transport
which creates market for products, employment opportunities can be visible & acquired”
Key informant, Busanza Sub county.

Table 4.5: Correlation Matrix for infrastructural development and poverty reduction

Infrastructural Poverty Reduction

development
Pearson Correlation 1 .562**
Infrastructural
Sig. (2-tailed) .000
development
N 159 159
Pearson Correlation .562** 1
Poverty Reduction Sig. (2-tailed) .000
N 159 159
**. Correlation is significant at the 0.01 level (2-tailed).
The hypothesis was tested using correlation analysis and the significance level was 0.05. The
Implication is that a 95% confidence interval is being used. The correlation result (r = 0.562,
p<0.01) showed that there was a positive and significant relationship between infrastructural
development and poverty reduction in Busanza Sub County, Kisoro district. This statistic implied
that the impact of infrastructure on poverty reduction takes the form of first-round effects,
followed by subsequent impacts. In the first round, infrastructure development produces two
initial effects that could lead to poverty reduction through economic growth. These two initial
impacts are the supply side and demand side impacts.

26
The development of infrastructure improves the supply side of the economy by reducing cost,
enhances the business climate, makes room for better access to market opportunities and opens
up new opportunities. These supply side effects attract domestic and foreign investment,
increasing employment and national output. The demand side effect of infrastructural
development occurs when projects are implemented. In this case, the new project, say road
construction, creates new jobs through which incomes are generated. The social dimension of
better infrastructure is that it increases access to basic social services, thus improving the living
conditions of the poor. The subsequent effect of infrastructure development arises from fiscal
revenue generated from it. As fiscal revenue increases through growth, additional budget can be
generated for programmes that improve the living conditions of the poor.

4.5 Influence of Access to Financial Services on Poverty Reduction

The study revealed that majority of the participants 71(44.7% mode 1) strongly agreed that
financial services have continued to increase especially been it a tool for economic development,
particularly in the area of improving welfare and general standard of living, wealth creation,
employment generation, and poverty reduction. Slightly less than half of the participant
76(47.8% mode 2) agreed that Access to and use of basic financial services like savings,
payments, loans, and insurance, helps the poor to move out of poverty by economically and
socially empowering them. the study further revealed that 68(42.8% mode 2) agreed that Access
to financial services enables the poor to fight the various dimensions of poverty and make
improvement in their lives and provides momentum for growth and development.

Table 4.6: Influence of financial services on poverty reduction

Statements SA A NS D SD
Financial services have continued 71 50 25 10 1
to increase especially been it a (44.7%) (31.4%) (15.7%) (6.3%) (0.6%)
tool for economic development
Access to and use of basic 56 76 17(10.7 4(2.5%) 4(2.5%)
financial services like savings, (35.2%) (47.8%) %)
payments, loans, and insurance,

27
 helps the poor to move out of
poverty by economically and
socially empowering them
Access to financial services 58 68 18 11 2
enables the poor to fight the (36.5%) (42.8%) (11.3%) (6.9%) (1.3%)
various dimensions of poverty and
make improvement in their lives
and provides momentum for
growth and development
Source: Primary data (2021)
Findings in the table above reveal that 44% of the respondents strongly agreed that financial
services have continued to increase especially been it a tool for economic development, 31% of
the respondents agreed with the statement, 15% were neutral and 6% of the respondents
disagreed with the statement.
On the question access to and use of basic financial services like savings, payments, loans, and
insurance, helps the poor to move out of poverty by economically and socially empowering
them, 47% of the respondents agreed with the statement, 35% of the respondents strongly
agreed, 17% of the respondents were neutral and 4% of the respondents disagreed with the
statement respectively.
As to whether access to financial services enables the poor to fight the various dimensions of
poverty and make improvement in their lives and provides momentum for growth and
development, 42% of the respondents agreed with the statement, 36% strongly agreed, 11% were
neutral and 6% strongly disagreed with the statement.

Table 4.7: Correlation Matrix for access to financial service and poverty reduction

Financial Service Poverty Reduction

Infrastructural
development
Poverty Reduction
Pearson Correlation 1 .593**
Sig. (2-tailed) .000
N 159 159
Pearson Correlation .593** 1

28
 Sig. (2-tailed) .000
N 159 159
**. Correlation is significant at the 0.01 level (2-tailed).
The correlation coefficient [r = .593, p<0.01] shows that that there was a positive and significant
effect between access to financial service and poverty reduction in Busanza Sub County, Kisoro
district. The implication of this statistic was that poverty reduction in Busanza Sub County,
Kisoro district needed more access to financial service or it differently, the more access to
financial service, the more it got active in achieving poverty reduction in Busanza Sub County,
Kisoro district.

Access to financial services enables the poor to fight the various dimensions of poverty and
make improvement in their lives and provides momentum for growth and development.
Financial inclusion through cooperative banks is the key to empowerment of poor,
underprivileged and low-skilled rural households. Through financial inclusion, microfinance
banks increase the economic opportunities for the poor and low-income people, which lead
towards a positive result in social progress, economic development, economic empowerment and
social/ political/ legal empowerment. Thus, it is hypothesized that the more access to financial
services and establishment of Microfinance is centered on economic development programs that
aims at poverty reduction through financial services to the micro-entrepreneurs, low-income
earners and poor that cannot access similar services from the formal financial market.

29
 CHAPTER FIVE
DISCUSSIONS, SUMMARY,CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction

This chapter summarizes the whole study findings conclusions and gives the possible
recommendations the researcher sought fit if implemented on the contribution of coffee growing
on the livelihood of farmers.

5.2 Discussion of the study findings

5.2.1 The effect of agricultural modernization on poverty reduction

As regards the effect of agricultural modernization on poverty reduction in Busanza Sub County,
Kisoro district, the results revealed that there was a positive and significant effect between
agricultural modernization and poverty reduction in Busanza Sub County, Kisoro district.
Growth in agricultural productivity can increase real wage rates, which both directly and
indirectly contributes to poverty alleviation. In conformity, (Datt and Ravallion, 1998) suggest
that increased agricultural productivity (defined as output per unit of land) is related to poverty
reduction. However, literature also indicates that population growth can affect the net impact of
increased agricultural employment opportunities and productivity gains on poverty reduction. In
their multi-sectoral growth model, Irz and Roe (2000) demonstrate that a minimum rate of
productivity growth is necessary to counter population growth and avoid the “Malthusian trap,”
whereby population growth outpaces per capita economic growth. Thirtle et al. (2001) point out

30
that this finding is particularly relevant to Sub-Saharan Africa where the demographic and
technological characteristics of several countries are roughly consistent with such a poverty trap.

It was noted that when government allocates more financial resources, food security can be
enhanced either through market participation, agricultural productivity growth (through the use
of improved technologies) or both. However, the use of improved technologies remains
extremely low and access to agricultural services decreased in recent years, hence the yields also
remain low. However, the results from sub-classification and regression show that adoption of
improved technologies has a positive and significant impact in increasing incomes for
households with access to the markets, despite drought. Similarly, existing literature shows that
the impact of technological change is inherently linked to other institutions. technology alone
will be insufficient to reduce poverty without infrastructure and education (Thirtle et al. 2001).
Technology is more likely to generate positive benefits for the poor where initial asset and
income inequality is lower and related infrastructure and social services are well developed
(Thirtle et al. 2001).

The study also evaluated the impact of the receipt of extension services. The results consistently
show that the impact of agricultural extension on farm income is positive and statistically
significant. On average, the receipt of extension advice increases farm incomes by 12 percent.
Although the receipt of extension services increases farm incomes, extension visits alone may
not have a significant impact on poverty reduction. Agricultural extension fails to develop
technologies that require few off-farm resources. Moreover, the coverage of extension services is
rather small to have a significant impact on poverty reduction. At the national level, extension
services reached 15 percent of the rural population in 2005, but visited households are usually
not the poorest ones.

5.2.2 The effect of infrastructural development on poverty reduction

As regards the effect of infrastructural development on poverty reduction in Busanza Sub

County, Kisoro district, the results revealed that there was a positive and significant relationship
between infrastructural development and poverty reduction in Busanza Sub County, Kisoro
district. This statistic implied that the impact of infrastructure on poverty reduction takes the

31
form of first-round effects, followed by subsequent impacts. In the first round, infrastructure
development produces two initial effects that could lead to poverty reduction through economic
growth. These two initial impacts are the supply side and demand side impacts. The development
of infrastructure improves the supply side of the economy by reducing cost, enhances the
business climate, makes room for better access to market opportunities and opens up new
opportunities. These supply side effects attract domestic and foreign investment, increasing
employment and national output. The demand side effect of infrastructural development occurs
when projects are implemented. In this case, the new project, say road construction, creates new
jobs through which incomes are generated. The social dimension of better infrastructure is that it
increases access to basic social services, thus improving the living conditions of the poor. The
subsequent effect of infrastructure development arises from fiscal revenue generated from it. As
fiscal revenue increases through growth, additional budget can be generated for programmes that
improve the living conditions of the poor.On the contrary however, while infrastructure is often
assumed to stimulate market access and hence productivity, micro-level evidence provides
conflicting findings for the direction of causality. Using combined World Bank Living Standards
Measurement Survey data from Tanzania, Guatemala, and Vietnam, Rios et al. (2008) show that
households with higher productivity tend to participate more in markets. There is no evidence of
a reverse causal linkage whereby market access would lead to higher productivity. They
conclude that investments in market access infrastructure provide only minimal, if any,
improvements in agricultural productivity. Enhancements in farm structure and capital, on the
other hand, have the potential to increase productivity and market participation (Rios, Masters,
Shively 2008). On the other hand, Rao, Coelli and Alauddin (2004) argue that since many of the
determinants of agricultural productivity are relatively fixed, such as the quantity of land and
labor, distance to core markets, and climate, continued development in productivity comes from
increases in the quality of land and labor and through decreasing transport costs via
improvements in infrastructure such as roads (Rao, Coelli and Alauddin 2004).

5.2.3 The effect of access to financial service on poverty reduction

As regards the effect of access to financial service on poverty reduction in Busanza Sub County,
Kisoro district, the results revealed that there was positive and significant effect between access
to financial service and poverty reduction in Busanza Sub County, Kisoro district. The

32
implication of this statistic was that poverty reduction in Busanza Sub County, Kisoro district
needed more access to financial service. Existing literature shows that financial services have
been widely recognized as a crucial tool for poverty alleviation and socioeconomic wellbeing as
it helps the poor to diversify the household income, smoothen the household expenditure and
enables them to cope with economic shocks and fluctuations (Ledgerwood, 1998; Littlefield,
Murduch, & Hashemi, 2003; Robinson., 2001). Access to financial services is shown to have a
positive effect on poverty reduction at macro level (Imai et al. 2012), and also plays an important
role on poverty reduction and socioeconomic development in Sub-Sahara Africa countries
(Rooyen et al. 2012).

Access to financial services enables the poor to fight the various dimensions of poverty and
make improvement in their lives and provides momentum for growth and development.
Financial inclusion through cooperative banks is the key to empowerment of poor,
underprivileged and low-skilled rural households. Through financial inclusion, microfinance
banks increase the economic opportunities for the poor and low-income people, which lead
towards a positive result in social progress, economic development, economic empowerment and
social/ political/ legal empowerment. Thus, it is hypothesized that the more access to financial
services and establishment of Microfinance is centered on economic development programs that
aims at poverty reduction through financial services to the micro-entrepreneurs, low-income
earners and poor that cannot access similar services from the formal financial market.
5.3 Conclusions

This section presents the conclusions and recommendations based on the study findings. It also
highlights some areas for further research based on the observations from this study.

5.3.1 The effect of agricultural modernization on poverty reduction

There is much empirical evidence for poverty reduction through increases in agricultural
productivity. Much of the literature suggests that this effect occurs through the impact on real
household incomes, however there are multiple, complex pathways linking agricultural
productivity to real income changes that respond to various market forces. There is strong
evidence for indirect poverty reduction through employment generation, rural non-farm
multiplier effects, and food prices effects. However contextual factors determine whether market

33
forces resolve most favorably for the poor. Furthermore, the resulting equilibrium in agricultural
and labor markets may affect poor net food buying households differently than poor net food
producers. The available evidence supports the theories that when farm incomes and the real
wage rate increase and the rural non-farm economy grow, real household incomes increase and
the percentage of the population living below international poverty lines decreases. Nutritional
status or other aspects of wellbeing, such as health measures and education, may also improve.
However, initial asset endowments, and land assets in particular, are significant determinants of
households’ ability to access and effectively use productivity enhancing knowledge and
technologies. Poor households face barriers to technology adoption and market access. In sum,
the importance of productivity to agricultural sector growth and to poverty reduction is complex
and depends on a variety of contextual factors including the initial distribution of poverty, asset
endowments, strength of market linkages and the extent and nature of the poor’s participation in
the agricultural sector.
5.3.2 The effect of infrastructural development on poverty reduction

Using aggregate data, the results of this study reveal that there is a negative relationship between
infrastructural investment and poverty. The study also suggests that though investment in
infrastructure in general reduces poverty, investment in social infrastructure exerts a greater
effect as a poverty reduction strategy relative to physical infrastructure investment. It should also
be emphasized that the use of financing programs alone as a tool for welfare enhancement and
empowerment may not achieve much since the fundamental causes of gender inequality and
poverty seem not to have been given adequate and direct attention by the design and
implementation process to programmes. There are other external limitations like necessary
infrastructure in terms of roads, markets, storage facilities, and other policy gaps to peoples’
participation in economic development and therefore the challenges to economic empowerment
which the social policy and programmes must put in consideration.

5.3.3 The effect of access to financial service on poverty reduction

The objective of the study was to evaluate the moderating effects in the effect of access to
financial service on poverty reduction. The model was tested to verify the hypotheses with
respect to access to financial service and poverty reduction. Results show that financial inclusion
positively and significantly impacts on poverty reduction. The finding of this research is

34
consistent with previous research suggesting that when there is financial inclusion in the rural
areas, poor households are likely to use the opportunity of having financial services available to
invest and seek for financial services that will increase their level of standard (e.g., Jaiswal &
Bhasin, 2015; Mondal, 2015). Also, the results are also consistent with the finding of Ogunleye
(2017) that financial inclusion of the excluded poor adult population in Nigeria could unlock
their productive potentials by helping them to be involved in productive activities.
In conclusion, since physical and human capital investments by the poor are subject to liquidity
constraints, improvement in financial intermediation is beneficial to the poor because it could
create opportunities for the poor to hold liquid assets and earn higher return on their savings.
Later, they may start benefiting from greater availability of credit. The downside, however, is
that bank crises are particularly detrimental to the poor, who have very few opportunities to
diversify their assets.
5.4 Recommendations

The outlook of the modernization strategy is so distanced from the very people/group it claims to
target. The two systems of entrepreneurial and subsistence agriculture are opposing approaches
with different knowledge, science and ideals that cannot match.
By building on the qualities of the peasantry –resilience, hard-working, non-materialistic nature,
the government has an opportunity to make significant change to a significant portion of the
economy for the possibilities have been dormant for a long time and ignored. Across the globe,
there has been a realization that the peasant mentality of resource use and survival is being
adopted by more of people in urban and developed countries; the number of community gardens,
roof top gardens, organic vegetable gardens.
Thus, my understanding is that the peasant agricultural system is oriented towards less
commoditized, less market conditions for (re)production as opposed to entrepreneurial farming
which is heavily dependent on commoditized-resource allocation conditions. This is when
innovation and skills to generate value from natural resources is subjected to market price and
labour conditions.
First, in developing countries characterized by market failure, government has an active role to
play in the development of infrastructure in urban areas. In this respect, fiscal policy aimed at
massive investment in infrastructure in urban areas is crucial to poverty reduction. The situation
in Uganda is such that, though expenditure on infrastructure has increased in absolute terms, real

35
expenditure on infrastructure has declined over the years. Therefore, attention has to be focused
on the quantity of infrastructure in urban areas (that is, how many kilometres of roads are built,
and how many megawatts of electricity are generated per hour) rather than on nominal
expenditure on infrastructure.
Households with low education levels should be trained on the procedures of reducing household
poverty.

5.5 Areas for Further Research

Future research should study other factors that may influence the variables in the proposed
model, for instance future researchers should consider government policy, interest rate, and risk
management among the poor. It would also be useful to analyze other potential moderators, such
as risk culture, bank size, and bank age. Finally, this study considered only Busanza Sub-County,
Kisoro District in future studies; it would be of value to select other areas in Uganda.

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APPENDIX ONE
QUESTIONNAIRE FOR HOUSEHOLD HEADS

Dear respondent,
I am Semariro Nicodemus a student of Kyambogo University pursuing a Bachelor’s of
economics. I am carrying out a study on “national poverty reduction strategies and household
welfare in Uganda: a case study of Busanza sub county, Kisoro district”. The purpose of the
study is purely academic and information given will be treated with the highest degree of
confidentiality.
Thank you
SECTION A: BIO-DATA
1a) Gender

Female Male

2a) Age (Yrs.)

Below 30 31-40 41-50 51 and above

3a) Highest level of education

39
Certificate Bachelor’s degree

Diploma Masters and above

Informal education

4a) Marital status

Single Married Divorced

SECTION B: TO EXAMINE THE INFLUENCE OF AGRICULTURAL

MODERNIZATION ON POVERTY REDUCTION IN BUSANZA SUB COUNTY,
KISORO DISTRICT.
By use of a tick (√) please indicate whether you strongly agree (SA), agree (A), not sure (NS),
disagree (D) or strongly disagree (SD), to the various statements regarding the influence of
agricultural modernization on poverty reduction

Agricultural modernization and its effect on poverty reduction

Statements SA A N D SD
The use of improved seeds increases farm’s output
The use of mechanized systems improves agricultural
productivity
Use of improved variety of livestock improves output
Demonstration farms improves agricultural productivity
Farmers are trained on improved seeds and breed which
increases output
Agricultural extension services have increased framers
access

40
SECTION C: TO ESTABLISH THE INFLUENCE OF INFRASTRUCTURAL
DEVELOPMENT ON POVERTY REDUCTION IN BUSANZA SUB COUNTY, KISORO
DISTRICT.

By use of a tick (√) please indicate whether you strongly agree (SA), agree (A), not sure (NS),
disagree (D) or strongly disagree (SD), to the various statements regarding the influence of
infrastructural development on poverty reduction

Statements SA A N D SD
Privatized infrastructure development tended to alleviate
poverty if the poor could afford to participant in the benefit
Transport investment has been considered by many sub
component of the capital, the foundation that underpin the
production function
Transport infrastructure underlies more visible form of
capital facilitating the delivery of inputs to place of
production and delivery of finished goods to the market
place

41
 Infrastructure development has been championed as the
cure for poverty
Improved road network increases productivity and market
access

SECTION D: TO ASSESS THE INFLUENCE OF ACCESS TO FINANCIAL SERVICE

ON POVERTY REDUCTION IN BUSANZA SUB COUNTY, KISORO DISTRICT.

By use of a tick (√) please indicate whether you strongly agree (SA), agree (A), not sure (NS),
disagree (D) or strongly disagree (SD), to the various statements regarding the influence of
financial service on poverty reduction.

Statements SA A N D SD
Financial services have continued to increase especially
been it a tool for economic development
Access to and use of basic financial services like savings,
payments, loans, and insurance, helps the poor to move
out of poverty by economically and socially empowering
them
Access to financial services enables the poor to fight the
various dimensions of poverty and make improvement in

42
their lives and provides momentum for growth and
development

Thank You for Your Cooperation.

43