Progress in reducing poverty is unevenly distributed in Kenya, says World Bank

Kenya has been successful in translating economic growth into poverty reduction, but this progress is unevenly distributed across the country, according to a report released by the World Bank.

The report, titled The Kenya Poverty and Equity Assessment 2023: From Poverty to Prosperity: Making Growth More Inclusive, prescribed a number of measures the country needs to take in order to address poverty challenges. It spanned the years 2005 through 2021.

The north and northeast regions of the country, where arid areas are concentrated, are characterised by poverty rates persistently higher than the rest of the country, the report released on December 14, 2023 in Nairobi said. 

Counties in these areas are historically underdeveloped and have seen little progress in poverty reduction. Kenya’s northern-most county, Turkana, has the highest poverty rate.

As a result, economic growth has failed to lift enough people out of poverty and poverty has become less responsive to growth in recent years.

Kenya has been successful in translating economic growth into poverty reduction, according to the World Bank. The country saw poverty levels declining mostly before the COVID-19 pandemic but the pace of poverty reduction was already slowing.

“In 2019, almost a third of Kenyans (33.6 per cent) were living below the national poverty line, a 13.1-percentage point decline from 46.7 per cent in 2005-06. This translated into a decline in the number of poor individuals. In rural areas, poverty declined from 49.7 to 37 percent. In comparison, the urban poverty rate fell from 34.5 to 26 percent,” read the report.

Since March of 2020, Kenya’s progress in poverty reduction has been adversely affected by the COVID-19 pandemic that is estimated to have increased the number of the poor by an additional two million through adverse impacts on incomes and jobs.

Factors contributing to uneven progress

A combination of interconnected factors contributed to the uneven progress, the report said. The creation of productive jobs and economic opportunities is limited, particularly for the poor. 

Extreme weather events are becoming more common, with the poor being particularly vulnerable. The poor have few coping strategies for shocks, making them less resilient to them, it added.

Furthermore, inequality in both opportunity and outcome dampens the translation of overall economic growth to income growth for the poor.

Kenya’s fiscal system is less effective in reducing poverty due to a combination of tax and social spending design factors. Fiscal policy is an important tool for reducing poverty and equalising opportunities, the World Bank said.

Inclusive growth strategy needed

Kenya’s economic growth has the potential to pull more people out of poverty even in challenging economic contexts, according to the World Bank. It called for an inclusive growth strategy to pull millions of Kenyans from poverty.

To inform such a strategy, the report proposed three broad, interconnected policy pathways. Connecting the poor to economic growth; strengthening households’ resilience to adverse weather shocks; and leveraging fiscal policy to support poverty reduction objectives are among them.

These policies will build capabilities, provide access to finance and connect households to the market, the report said.

In efforts to bridge the gap between the poor and economic growth, the World Bank highlights the crucial role of the agricultural sector in Kenya. The World Bank has also called for developing and disseminating climate-smart agriculture technologies and services to farmers.

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