Economic Population Issues in Kenya
Overview
The portion of the population living below the national poverty line fell from 46.8 percent in 2005/06 to 36.1 percent in 2015/16. Most of the poverty decline is attributable to progress in rural areas, where poverty declined from approximately 50 percent in 2005/06 to 38.8 percent ten years later.
This contrasts with stagnant poverty incidence in urban areas, particularly outside Nairobi. With growing population and urbanization, the absolute number of people living below the poverty line increased in urban and north-northeastern counties (NEDI), from 2.3 to 3.8 million and from 2.4 to 3.2 million respectively, whereas it decreased in rural and non-NEDI counties.
This contrasts with stagnant poverty incidence in urban areas, particularly outside Nairobi. With growing population and urbanization, the absolute number of people living below the poverty line increased in urban and north-northeastern counties (NEDI), from 2.3 to 3.8 million and from 2.4 to 3.2 million respectively, whereas it decreased in rural and non-NEDI counties.
Of concern is the fact that the wellbeing of the population in the NEDI counties lags considerably behind the rest of Kenya. Moreover, these areas have seen little progress between 2005/06 and 2015/16, remain prone to food insecurity, and present very low levels of educational attainment, access to improved sanitation, and to a lesser extent, access to improved water.
Another important message is that, as Kenya urbanizes, cities are not providing enough economic opportunities for urban households to improve their income levels and obtain adequate standards of living. Despite a drop in the growth rate caused by the global COVID-19 pandemic, the international poverty headcount rate is expected to continue its decline, but only at a moderate rate to 33.1 percent in 2020 and 32.4 percent in 2021.
The annualized consumption growth for the bottom 40 percent has been a satisfactory 2.86 percent per year between 2005/06 and 2015/16, a pattern that is more pronounced in rural areas. Consistent with this pro-poor pattern of economic growth, inequality declined, as confirmed by several inequality measures.
Nevertheless, most of the reduction in poverty is attributable to economic growth and this suggests that, going forward there is ample scope for accelerating poverty reduction through more efforts to reduce inequality.