Report praises Kenya’s spend on poor, elderly

Kenya’s social safety net programme has been praised as one of the most robust in sub-Saharan Africa, with the potential to reduce inequality and poverty among vulnerable groups.

According to a report from the World Bank, the country’s unconditional cash transfers to the poor and elderly stand out in the region for their ability to uplift livelihoods.

The report comes at a time when inequality in Kenya is at its highest, with unemployment and high inflation making it difficult for the poor to climb the social ladder.

The country is ranked seventh in sub-Saharan Africa in terms of the amount of money paid out to vulnerable groups as a percentage of gross domestic product (GDP).

“While most developing countries spend an average of 1.6 per cent of their GDP on social safety nets, Kenya spends close to three per cent of its GDP on social nets,” notes the report.

Lesotho leads sub-Saharan Africa in spending, with almost seven per cent of its GDP spent on cash transfers to the needy. Sierra Leone, Burundi, South Africa, Mauritius and Namibia round up the top six.

The World Bank also found that Kenya’s unconditional cash transfers to vulnerable families can be directly linked to an 8 per cent increase in secondary school enrolment.

Insurance cover

Social safety nets are non-contributory measures designed to provide regular support to the poor and vulnerable. They include school feeding programmes, fee waivers, job skills trainings and cash transfers.

In the 2014-15 financial year, Kenya spent Sh29 billion on vulnerable groups, including the elderly, people with extreme disabilities and street families.

In the current financial year, the figure has dropped 4 per cent to Sh27.8 billion, although coverage has been extended to include Sh1 billion seed capital for the National Fund for Restorative Justice and Sh500 million for insurance cover through the National Hospital Insurance Fund (NHIF).

However, there is need to do more. The country has 46 per cent of its population living on less than a dollar (Sh102) a day, with children accounting for almost 20 per cent of this figure.

In addition, the HIV and Aids scourge, and rural-urban migration have seen the number of orphans and vulnerable students nearly double in the last half decade from 2.6 million in 2009 to more than four million today.

Retirement Benefits

The country has also seen the number of old people in need of financial support increase rapidly over the same period, with some analysts warning of a pending pension time bomb.

Data from the Central Bank of Kenya indicates that membership to Kenya’s retirement benefits schemes is growing rapidly, from 88,509 members in December 2012 to 113,316 in December 2013.

Two years ago, the World Bank approved zero-interest credit of Sh24 billion to help Kenya fight extreme poverty by setting up a radical national social safety net programme.

The initiative is to bring together existing Government programmes into a better co-ordinated and more efficient system to reach 3.3 million of the country’s poorest people by 2017.

Already, President Uhuru Kenyatta early this year launched a biometric registration system, which, together with a new digital funds disbursement system, is expected to make cash transfers less vulnerable to fraud.

Kenya has signed on to the goal of social protection for all, where anyone who needs social protection can access it at any time by the year 2030. It is expected that with the adoption of technology, such as biometric registration and mobile money cash transfers, vulnerable groups will be better able to access social safety nets.

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