By Taonga Sabola
Gini coefficient is a measure of statistical dispersion intended to represent the income or wealth distribution of a nation’s residents, and is the most commonly used measurement of inequality.
A Gini coefficient of zero expresses perfect equality, where all values are the same, while a Gini coefficient of 1 or 100 percent expresses maximal inequality among values.
In its draft Country Programme Document for Malawi, which will run from 2019 to 2023, UNDP says the share of the poorest quintile in national consumption worsened from 10.1 percent in 2005 to 5.5 percent in 2012.
Malawi is classified as a least developed country, as nearly 70 percent of its 17 million people live on less than $1.90 a day, with poverty concentrated in rural areas, where 95 percent of the poor live.
Despite being largely peaceful, Malawi ranks 170 out of 188 countries with a Human Development Index of 0.476, placing it well below the sub-Saharan average of 0.523.
According to the draft country document, gender inequality is high in Malawi, with a Gender Inequality Index of 0.614, mainly due to negative social norms and discriminatory practices, resulting in women’s low levels of representation in politics and the economy.
Responding the latest UN data, Finance Minister, Goodall Gondwe, on Monday said the issue of inequality has always generated some heated debate not only in Malawi but even in developed countries.
He said while Capital Hill is doing its best to narrow the gap, by, among other things, using taxation and introducing poverty reduction programmes, it appears that it does not have the desired impact.
He faulted economics for not coming up with a concrete universally accepted theory for tackling the question of growing inequality.
“We would have loved if we had such a theory. Not only in Malawi, leaders elsewhere are struggling with the same,” Gondwe said.
Presenting a paper during the 2016 Economics Association of Malawi (Ecama) annual conference, Chancellor College economist, Richard Mussa, said increased levels of income inequality may hamper the poverty reducing effect of economic growth.
He said extreme economic inequality is a threat to economic and social rights, and threatens the realisation of all forms of rights everywhere.
“In 2004/5, the richest 10 percent accounted for 46 percent of total consumption, the bottom 40 percent accounted for 15 percent of total consumption.
“In 2010/11, the share of the top 10 percent increased to 53 percent in 2011, and that for the bottom 40 percent declined to 13 percent. The implication is that the consumption of the top 10 percent rose from being about three times higher to being about four times higher than
that of the poorest 40 percent,” Mussa said.
He said, though the economy registered very high growth rates averaging over 7 percent per annum over the past decade, the Gini coefficient, or the gap between the poor and the rich, grew.
He singled out lack of recognition of inequality as a problem in its own right in any of Malawi’s development strategies as one of the factors worsening inequality.
Mussa described Malawi’s growth as ruthless.
“Malawi poverty reduction efforts would be more pro-poor and inclusive if deliberate policies to engender equality are instituted. From a population of about 16.3 million, the number of poor people in 2015 is 8 million: About half of the population.
“The National Statistical Office further projects Malawi’s population in 2020 to be at 19.1 million. For Malawi to reduce poverty in the next five years and beyond, inequality must decrease significantly,” Mussa said.