of Financial Vulnerability
The entire part II is dedicated to better describe the middle income groups in Uganda and to understand their recurrent characteristics. We try to provide detailed descriptions of specific demographic factors (done in chapter 6), their lifestyle linked with their consumption practices (in chapter 8), and behavior that we have found recurrent among nearly all our respondents – this shall be the focus of the current chapter23. This behavior was often linked to the efforts of the respondents made in the quest for a better life, namely through achieving financial stability and the capacity to mitigate unexpected hardships and times of economic crisis. We identified four main themes that were prominent in many of the interviews: lived trajectories of emergence, stability, and in some cases decline, their tendency to diversify income, their priority of investing into education, and the significance of networks. These themes may seem somewhat arbitrarily put together, but they are linked by a common motive: the mitigation of vulnerability to economic shocks. As we shall see, their trajectories influence the prospects of their economic advancement.
The ability to diversify income sources is essential; without, financial stability does not seem possible. Education is cherished as a way to prosperity in many cases and, therefore, people will go to great lengths to get the best education for their children and themselves. Finally, kinship and other social networks are vital means of support; but sometimes also a strain or hindrance. It is also through these themes that stratification among income lines becomes distinguishable and the economic emergence is mainly determined by the capacity to mitigate vulnerability. Being vulnerable, therefore, means for a big part of the middle income groups that downward mobility is as much of an option, or even more so, than upward mobility. Resilience to vulnerability is also a decisive factor for middle class affiliation in the work of Ferreira et al. on Latin America. This World Bank study determines the lower economic threshold of the Latin American middle class as $10 per day – the amount perceived necessary to not be vulnerable anymore; that is a likelihood of 10% or less to fall back into poverty within a five-year interval (Ferreira, 2013, p. 33 ff). They differentiate thus between those who are poor, who are vulnerable and finally those who are middle class. They acknowledge though that the most significant share of the population is not in the middle class but among the vulnerable. This does lead interestingly to a similar categorization than the AfDB, but with different conclusions: the latter includes those who are vulnerable in the middle class, described as floating class (Ncube et al., 2011, p. 4), whereas Ferreira et al. make not being vulnerable decisive for being considered middle class. Likewise, it has become conventional wisdom in research on poverty, that many households that are poor, are not so at all times, but
23 The analysis of this chapter is predominantly drawn from the dataset of 2014, where the long narrative interviews left room for new topics and categories to arise.
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show substantial mobility in and out of poverty (Baulch & Hoddinott, 2000; Narayan & Petesch, 2007). This up- and downward mobility closely relates to the approaches of vulnerability and floating class mentioned above. Hence, the mitigation of vulnerability, or the efforts to do so, become central to leaving this kind of insecurity. Therefore, it is not surprising that the narratives of our respondents revolved a lot around these topics. Even though, and this caveat remains if a majority of the participants have passed the state of vulnerability defined in economic terms (the
$4 per day threshold between floating and lower middle class). However, subjectively for the respondents of Kampala, this point seems to come at a higher daily income per capita. In general, the people of the UMC were most likely to acknowledge that they felt they could not fall back into poverty again.
Since we are less focused on boundaries and more on processes, it is not vital to determine fixed thresholds at which a person is not vulnerable anymore. Instead, we try to show how vulnerability decreases, through the different themes discussed here. And not only as actual decrease, but also one subjectively felt by the participants of the study. By doing so, we hope to determine crucial turning points towards more resilience and try to draw more comprehensive conclusions how this might affect behavior and attitudes.
7.1 Life Trajectories
The narrative of Africa Rising has been very prominent starting from 2010, as already discussed in chapter 2. If this holds equally true for Uganda, so that we can talk about “Uganda rising” as well, it should be reflected in the macroeconomic statistics of the country. The Museveni era is widely credited for continuous growth and stability. These achievements are recognized even by opponents of the president and are used as justification for the legitimacy of the regime. Museveni portrays himself as the man with a vision for Uganda, whereby this vision is one of evolving into a peaceful middle income country.
Compared with the whole region, Uganda is not one of the big players and punching below the continental average (see p. 71ff). However, the country has experienced economic emergence on a macroeconomic level, lifting people out of the first poverty line and placing them in the class of the vulnerable, making the group of the floating class thus salient for analyses. We have seen that the upward mobility is not restricted to this class alone. Instead, the income distribution itself did not change significantly. Also, we need to bear in mind that at the same time a part of the floating class may have seen downward mobility as well. The question that remains now, is how these macroeconomic changes translate into the personal experiences of the respondents.
Nearly all respondents are doing better than their parents did. It manifests itself in their education, compared to the educational attainments of their parents. However, it would be too hasty to conclude high intergenerational mobility from such an observation. Ferreira et al. point out though that in countries where educational attainment was historically very low (they use Ethiopia as an example, but this may hold equally true for Uganda) achieving better education than the parents should not be interpreted as high intergenerational mobility. Instead, the low starting point allows for easier catch up (Ferreira, 2013, p. 54). The education of the parents, however, played a role in the likelihood for their children to obtain higher degrees. There is a significant correlation at the 0.05 level between the educational level of the parents and the
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respondents. In general, the children would obtain a higher education level than their parents, but the correlation also shows the limits to social upward mobility if someone is coming from a humble background.
Education of father Percentage of Respondents with a University Degree
Primary 47 %
O-Level 57 %
A-Level 71 %
University 85 %
Table 6: Relation between Parental Education and Educational Attainment
The site where someone has spent their childhood might be another indicator, even though it is not straightforward. All respondents now are living in Kampala or the surroundings. Thus, we might assume that their children (if applicable) grow up in an urban environment. Among the respondents, however, about half of them grew up in the city or a small town, the other half came from a rural setting. Since urbanization is a critical factor of moving out of poverty (Narayan &
Petesch, 2007), we might hence conclude that those who have left in the course of one generation the village to settle in the capital have advanced on a welfare ladder, compared to their parents.
In the personal narratives, it also becomes apparent that there are obstacles to these trajectories of upward mobility, often constrained by the parental background (such as parental education, as already mentioned), therefore, limiting intergenerational mobility. For us to determine intergenerational mobility itself is not possible, since we did not inquire much about or talk to the parents of the respondents. Instead, we decided to focus on their childhood conditions and compare them to their current situations. At the beginning of each interview, the respondents were asked to tell the interviewer about their life, in as much detail as possible. In our narratives, we can distinguish between different pathways.
I. The Struggle – From a poor background, passing their parents, but with limited advancement.
II. The Success Story – From a poor background, passing their parents succeeding very well now.
III. The Privilege – From a privileged background, continuing and expecting a privileged position in the future.
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IV. The Decline – From a privileged background, with a decline in their economic situation.
Certainly, these differentiations are hard to make and do not necessarily correspond to how the respondents would describe their situation. Additionally, it is not easy to disentangle which factors are structural and which are situational. As described in chapter 6.1.2, income is also bound on the life cycle. Thus, it is sometimes difficult to determine whether someone is affluent because of their background or their age.
So, to make a more thorough analysis, we isolated recurrent categories24 from the narratives of our respondents which have influenced the overall economic well-being of the respondent. If present, each category for each respondent would be attributed a +1 if the situation had a positive effect and a -1 if the situation was negative. Recurrent categories would be as follows:
Childhood Category Score attributed
Presence of both parents +1 both parents were present -1 one parent was absent -2 both parents were absent
Employment of both parents +1 Both parents had employment -1 Both parents were unemployed
Polygamy -1 Parent was polygamous/multiple families
Ability to pay school fees +1 Parents were able to pay school fees +/-0 Parents struggled but managed to pay school fees
24 These categories are not supposed to be exhaustive, and there is a wide range of topics that have not been covered at all, such as health or exposure to environmental shocks. But, as said before, they are based on items that respondents felt worth mentioning to describe their situation, especially during their childhood. In the categories of the current situation, there has been more probing through the researcher. Thus, these categories possibly reflect equally our framing of decisive markers of wealth. Yet, this framing has been shaped through the various stages of the research process and hence is not entirely external to the lives of the respondents. For example, grocery shopping places would not be included in these categories, because they pertain only to a negligible fraction of the respondents, as discussed elsewhere in this part. Even education of the respondents would not figure into, because the sample had a rather homogeneous level of tertiary education, with only few exceptions.
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-1 Parents were incapable of paying school fees
Student working -1 Respondent had to work to pay school fees
or support family
Sponsorship +1 A sponsor from outside the family paid
school fees
Support through family members +1 External family was able to provide support, financial or other
Growing up in Kampala/Entebbe +1 Growing up in an urban environment is more likely to be associated with financial well-being
Self-reported condition +1 Respondent describes childhood conditions as positive
-1 Respondent describes childhood conditions as negative/ poor
Table 7: Categories Determining Childhood Conditions
Current Category Score attributed
Sufficient Income (derived from budget sheets)
+1 Income exceeds expenditure -1 Expenditure exceeds income
Ability to pay school fees +1 Respondent able to pay for school fees
-1 Child cannot go to school because unable to pay school fees
Employment status +1 Currently employed -1 Currently unemployed
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Multiple sources of income +1 Respondent has multiple sources of income
Single parent -1 Respondent is raising a child/children alone
Self-reported condition +1 Respondent describes their condition as positive -1 Respondent describes their condition as negative/poor
Car ownership +1 Respondent owns a car
House ownership +1 Respondent owns a house
Table 8: Categories Determining Current Conditions
The scores obtained in each category would be added up, resulting in two final scores, one for the childhood and one for current conditions. Depicted in a scatter diagram, the position of our respondents would be determined by their childhood and current conditions, whereby the score of the current condition is represented by the y-axis and the childhood condition by the x-axis.
Interestingly, the groupings by quadrant would roughly (but not always) correspond to the four pathways described above.
So, those who started off with a low score in their childhood (represented on the x-axis) but managed to score high in their present life (y-axis), considerably improved their lives compared to their childhood. But it also shows that those who are not doing as well today did not have a comfortable childhood either, and on the contrary, those who are in the third quadrant usually had a good start and are doing very good now, as well. This confirms the importance of upbringing and parental endowments, even though the respondents in the second quadrant show that even from a less privileged start advancement is possible. This graph, however, does not reveal the net differences between the childhood conditions and now. It masks small improvements in the first quadrant and small decline in the third. When only plotting for net difference (that is the current condition score minus the childhood condition score), and sorted from lowest to highest, the net progress of the respondents becomes more visible.
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Figure 18: Economic Emergence; Scatter Diagram of 2014 Sample
From those respondents who saw a decline in their living situation, only 11 (Rose), 6 (Oliver) and 23 (Kato) are in a situation of struggle. 10 (Herbert) and 4 (Alex) are relatively young, and from well-to-do families, hence it is not surprising that they have not yet built all their assets, and since their start was from a high score, it was hard to improve on this one right away. They are also not
Figure 19: Net Difference in Economic Emergence of 2014 Sample
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seeing their living situation deteriorating, but rather as “I am establishing myself as any other man at my age should be doing.” (Alex). 13 (Elisabeth), whose case will be discussed in chapter 8.3, is particular since she saw her living situation decline, but remains in a somewhat privileged position, compared to one-third of the sample. Yet, she perceived her decline as very strong and considers herself to be a pauper. Oliver, on the other hand, gave up a well-paying job to pursue his political interests and accepted considerable disadvantage. These examples show the relevance of subjective life assessments, as different people with different aspirations judge their life situations differently.
Case Story: The Decline
Rose (11 in the graph) comes from Fort Portal, in the west of Uganda. Her father was a businessman, owning a small stationery shop. Even though he had to close it eventually, he succeeded in educating his children and taking care of his polygamous family. She recalls her financial situation at home as acceptable since her father even managed to support other people. To pay for her education, he sold small plots of land.
During her studies, she met her boyfriend, Kato (23 in the graph), whom she soon moved in with. She got pregnant during her studies, and right now the couple has two girls. Despite motherhood, Rose finished her degree and is now in search of a job, which she finds very challenging, as she lacks experience. Instead, she turned to multi-level marketing but failed to generate an income with it so far. They live in a rented three-bedroom house in Entebbe because Kato works at the airport. He comes from a military family from the north. His father was an army officer under Idi Amin but got killed during in-house fighting. He was raised by paternal relatives but describes these relationships as being without love, making him distance himself from his family, to the point that he does not speak his local language at home with the children but English. After school, he got a diploma in marketing, and a first employment selling pagers in the wake of the expansion of mobile phones. He describes this as
“selling combs to bold men”, an experience that he hated to the point that he decided to never do marketing again. After being idle for a year, he found an opportunity at Entebbe Airport. During his time, he went on a mission for the UN in the DRC, earning
$3000 a month. He used this money to invest it in a very luxurious house in Entebbe, with the plan of renting it out at $1200 per month. However, the tenant is not paying, and Kato is involved in a lawsuit over the overdue rent. Right now, his job earns him
$400 of which he spends everything. To the point that at the moment of the interview their children were at home because he could not afford to pay their school fees for the trimester that had just started. He is not pleased with his conditions complaining
“I am living in this lousy place; I don’t even have a car. […] Now I am not even able to pay school fees, my girls will not go to school on Monday because this salary cannot handle.” For him, a car is of utmost importance to his lifestyle, so he plans to invest the money from the lawsuit in an SUV, which will considerably improve his life. His girlfriend confined in a private moment that her partner does not know how to handle money, but that he is also immune to any advice. While in DRC her father had repeatedly urged him to set up different side investments, but he insisted on putting everything into the house. She feels she cannot say anything since he will not listen
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and arranges herself with the situation. The couple was several times during the interview engaging in arguments (“Every day this is a house of arguments.”), but they also confirmed each other and to the researcher their love for one another.
Case Story: The Struggle
Oliver (6) comes from an impoverished family that he describes as living below $1 per day. Because his brother was not interested in continuing education beyond primary school, he convinced his father to send him to secondary school, which he managed to do for some years, selling plots of land to finance his education. He excelled academically, which gave him the opportunity to study on a scholarship
Oliver (6) comes from an impoverished family that he describes as living below $1 per day. Because his brother was not interested in continuing education beyond primary school, he convinced his father to send him to secondary school, which he managed to do for some years, selling plots of land to finance his education. He excelled academically, which gave him the opportunity to study on a scholarship