World Bank Kenya has launched the Kenya Poverty and Equity Assessment 2023 Report which looks into the country’s ability to grow from poverty to prosperity while making growth more inclusive.
The report by World Bank noted that poverty rate increased between 2019 and 2020 in the rural areas while the number of poor individuals also rose.
As per the report, poverty rates increased by 6.5% points from 37.0 to 43.5%. Further, the increase in poverty Nationally was recorded at 5.1M; 2.6M in urban areas and 2.4M in rural areas.
“In rural areas, the poverty rate increased by 6.5% points from 37.0 to 43.5%. Not only did poverty increase between 2019 & 020, but the number of poor individuals also rose,” reads part of the World Bank statement.
“Nationally, the increase was about 5.1M; 2.6M in urban areas & 2.4M in rural areas,” it further adds.
Further, poverty rates at the national level increased by 9.3 percentage points between 2019 and 2020 from 33.6 to 42.9 percent in 2020.
This increase was attributed to the increase in urban poverty of 15.7 percentage points from 26.0 to 41.7 percent.
Likewise, the World Bank Kenya report blames the COVID-19 pandemic for temporarily causing a setback to the progress that had been made especially for urban areas.
“Inequality in consumption expenditure dropped from the onset of the COVID-19 pandemic due to the large decline in consumption of richer households,”
World Bank Report on Counties with Highest Poverty Rate
According to the report, the North and Northeastern parts of the country are mostly characterized by poverty rates that are persistently higher than the rest of the country.
The report revealed that Kenya’s northernmost country, Turkana, has the highest poverty rate.
Additionally, the report revealed that these counties in the arid areas lag behind as they have significantly lower HCI and economic activity, which is reflected in lower gross county product (GCP) per capita.
Nonetheless, during the launch, the State Department for Economic Planning principal secretary James Muhati, echoed the importance of empowering Kenyan youth with digital skills as part of efforts to curb poverty rates in the country.
“Kenya’s youth need to be equipped with digital skills to ensure they are not locked out of an increasingly digitalized economy,”
He further expressed optimism in Kenya’s workforce noting that, “Kenya’s workforce is projected to increase by 1 million per year.”
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How Kenya Can Make Growth More Inclusive
According to the report by world bank there are three broad policy pathways that can help Kenya make growth more inclusive and accelerate poverty reduction, building on past success.
This policy pathways include, connecting the poor to economic growth, strengthening households’ resilience to shocks, particularly adverse weather shocks, given their growing incidence and the importance of agriculture as an important sector from an inclusion perspective.
In addition, the World Bank also outlined leveraging fiscal policy to support poverty reduction objectives as one of the policies to accelerate poverty reduction and make growth more inclusive.
Likewise, according to the report, the recent periods of strong economic growth have not resulted in equally strong poverty reduction.
“An average annual poverty reduction of 1.1% points was recorded between 2005 & 2015, with the poverty headcount falling from 46.7% to 36.1%,” said World Bank.
Challenges Faced by Kenyan Workers
According to World Bank Kenya, the country’s growth has the potential to pull millions of people out of poverty.
However, the money lender noted that this potential for growth can only be realized through an inclusive growth strategy that boosts economic opportunity and productivity among the poorest while maintaining focus on longer-term development objectives.
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Likewise, the World Bank while rooting for an inclusive growth strategy that boosts economic opportunity and productivity among the poorest in Kenya, also noted inclusivity as a challenge facing Kenyan workers.
“The services sector is increasingly becoming the engine of growth. However, the returns for skilled workers are likely higher than that for low-skilled workers,” said World Bank.
In addition, the financial body has stated that debt service costs in Kenya have risen due to increasing interest rates hence becoming a distress to Kenyans.
Further the report reads that fiscal consolidation is becoming ever more central and ever more painful noting that risk of debt distress remains high.