At least 2.4 million Kenyans will fall below the poverty line in 2026, according to a report from the World Bank.
The report titled Africa Economic Update reveals that the poverty rate could be 2 to 4.5 percentage points higher in 2026.
However, this will depend on the extent to which higher fuel prices are passed through to economy-wide prices.
Urban households are projected to be more heavily affected.
“In Kenya, microsimulation estimates suggest that the poverty rate (measured at the US$3 international poverty line) could be 2 to 4.5 percentage points higher in 2026. This would translate into an additional 1 million to 2.4 million Kenyans falling below the poverty line,” read the report in part.
World Bank Explains Why Up to 2.4 Million Kenyans Will Become Poor in 2026
The World Bank attributed this to an economic recovery that remains vulnerable to mounting public debt, declining external financing—particularly development assistance—and elevated global risks.
It added that the ongoing crisis in the Middle East—through higher food and fuel prices and declining remittance flows—poses a growing risk to recent welfare gains.
According to the report, early estimates indicate that the impact of the Middle East crisis on household welfare has so far been limited.
However, risks are expected to intensify if the crisis persists, with many households remaining vulnerable to shocks, and rising food and transportation prices, together with a likely decline in remittances from the Middle East, could erode incomes and purchasing power.
These pressures would disproportionately strike households already near the poverty line. This vulnerability stems from the large share of households living just above the poverty threshold.
The share of Africa’s population between the US$3 international poverty line and the US$8.30 income threshold, an indicator of income vulnerability, grew from 29 percent in 2000 to 43 percent in 2022.
Another important transmission channel is the decline in remittances, which could further weaken household incomes. Remittances, including those from the Middle East, are a major source of external income for Kenya. In 2022, an estimated 500,000 Kenyans were employed in Gulf states.
Data for March 2026 showed one of the sharpest monthly drops in remittances in recent years, with up to US$40 million in monthly remittances potentially at risk.
Beyond remittances, the Gulf states are key export destinations—particularly for horticulture and livestock products—and these sectors are already incurring financial losses.
The report further shows that limited job creation and persistently high informality further heighten household vulnerability, leaving many exposed to cost-of-living shocks.
Rising food and transport prices are likely to be a key channel through which these risks materialize.
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Future Outlook
Current projections show that poverty, measured at the international $3 per capita per day international line in 2021 purchasing power-adjusted prices, will ease only slightly, declining to 47.3 percent in 2026 and 45.4 percent in 2028.
This represents a net decrease of 1.1 percentage points in the poverty rate compared to 2022.
However, the absolute number of people living in poverty is expected to continue rising even as the rate edges downward, pointing to the challenge posed by rapid population growth.
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Kenya Poverty Reduction Slows
A joint study by the Kenya Institute for Public Policy Research and Analysis, Kenya National Bureau of Statistics, the World Bank, United Nations Children’s Fund, and researchers from the University of Nairobi revealed that Poverty is now less responsive to growth, meaning that even when the economy expands, fewer people are escaping deprivation.
“Before the COVID-19 pandemic, Kenya had made gradual gains in reducing poverty. However, the economic shock triggered by the crisis reversed much of that progress, pushing poverty levels back above pre-pandemic levels and exposing underlying institutional vulnerabilities,” the report reads in part.
According to the report titled“Poverty and Distributional Impacts of Fiscal Policy in Kenya”, poverty is heavily concentrated among rural populations, particularly in Arid and Semi-Arid Lands (ASALs), where livelihoods are more vulnerable to climate shocks and limited infrastructure.
The report states that poverty reduction will depend crucially on improving agricultural performance and containing inflation, which helps explain why industry- and services-led growth has translated only weakly into reduced poverty.
