New World Bank report warns of widening inequality gap, poverty

Kenya’s economic growth is leaving behind the country’s poor, exposing the nation to high inequality levels and heightened risks of social unrest. 

The latest report from the ="https://www.standardmedia.co.ke/business/business/article/2001485739/world-bank-to-give-kenya-over-sh18tr-in-loans-and-investment">World Bank< indicates that poverty levels in the country remain high even as the economy continues to post strong growth in the gross domestic product (GDP).

“Since 2015, the link between growth and the pace of poverty reduction has weakened due in large part to factors related to the performance of the labour market and households’ resilience to frequent and multiple shocks,” explains the World Bank in the latest edition of the Africa Pulse Report.

According to the World Bank, Kenya ="https://www.standardmedia.co.ke/business/business/article/2001492389/march-inflation-rate-drops-to-5-7pc-due-to-a-decrease-in-food-fuel-prices">experienced high growth< and declining poverty and inequality between 2005 and 2015 supported by market-oriented reforms and investments in education and health. 

The proportion of households with a primary school-aged child not attending school declined from 17 per cent in 2005 to five per cent in 2021, giving the country the highest human capital index score in sub-Saharan Africa.

However, several economic shocks in recent years including ="https://www.standardmedia.co.ke/business/business/article/2001492337/tourism-rebounds-to-sh3525b-surpassing-pre-covid-numbers">Covid<, high energy prices and inflation as well as a weakened shilling have dealt a heavy blow on household budgets, with the poor bearing the heaviest brunt.  

“Along with pockets of high poverty across the region, almost a third of the extreme poor live in two countries - the Democratic Republic of Congo (DRC) and Nigeria - and another third live in six countries: Ethiopia, Kenya, Madagascar, Mozambique, Tanzania, and Uganda,” explains the World Bank.

Data from the Kenya National Bureau of Statistics (KNBS) indicates that the overall poverty rate nationally stood at 42.9 per cent in 2020, before declining to 38.6 per cent in 2021 while the food poverty rate went down from 43.5 per cent to 40.7 per cent over the same period. 

Individuals or households are considered to live in food poverty if their food consumption per adult is equivalent to or less than Sh2,331 per month in rural areas and Sh2,905 per month in urban areas. 

On the other hand,  individuals or households are considered to live in absolute poverty if their total consumption per adult was less than 3,947 per month in rural areas and 7,193 per month in urban areas.