Income Distribution and Poverty

It was shown in Chapter 2 that compared to the pre-independence period, the average standard of living fell sharply immediately after independence, but subsequently living standards grew significantly faster than in the period prior to independence. The average levels of real income per capita and real consumption per capita were respectively 5 per cent and 12 per cent higher in the first six years of the 1980s than in the second half of the 1960s. The reason for the higher increase in per capita consumption than in per capita income was the massive increase in external aid between the two periods. Compared to the depressed levels in the immediate post-independence years, the improvement in average living standards has been impressive: per capita income and consumption increased at annual rates of at least one and two-thirds per cent. To what extent were these improvements shared by the poor and low income groups?