How much will it cost Kenya's economy to end rising poverty?

Amidst the carnage, tear gas and bullets we have experienced this month in the name of maandamano (demonstrations), Nyeri Archbishop Anthony Muheria’s recent interview on Citizen TV was a breath of fresh air in offering insightful and thoughtful perspectives on the current state of the nation.

Naturally, many noted his characterisation of our national leadership as “rough, insulting, arrogant and imposing”. But he also spoke to a Kenyan leadership need that is humane, compassionate and concerned about the needs of the poor; those at the bottom of the socio-economic ladder.

It was a refreshing reminder that we have spent the past couple of years being politically hypnotised by zero-sum sloganeering about “hustlers, dynasties and cartels”.

One hopes and prays that the Kenya Kwanza administration – whose “bottom-up” hustler agenda is essentially a market-facing pro-poor agenda on paper– quietly listened to and took in his words with more than one ear.

Think about it in the context of last week’s maandamano. So Azimio called on the people to protest. Who were the great majority of the protestors – poor or non-poor? We could also ask the same of hired goons from either side of our political divide. 

Then we also had Kenya Kwanza leaders – including the President – traversing the country rallying the people through “development rallies” and a couple of counter-protests. 

Again, who attends these events – the poor or non-poor? 

We could go further. It is unarguable that most policing we observed during maandamano was characterised by acts of violence in public places such as roads, and private spaces including residences. Who are this violence’s most likely, and common, victims – the poor or the non-poor? 

These questions must give pause to all right-thinking Kenyans. As we do this, it is worth further contemplating the poor vs non-poor mix in those huge crowds that our politicians love to attract. One question might be – if ordinary people are busy attending political rallies, who is working?

A different question could then be – is the size of attendance a proxy for the prevalence of poverty; larger crowds where it is more, and smaller where it is less?

 Of course, it’s much more complicated than that – and we should still give Kenya Kwanza the benefit of the doubt with its bottom-up agenda - but our politics often looks like poverty’s twin; our politicians seem to prefer poor to non-poor crowds, and votes. Or is this view a bit too cynical?

Arch Muheria’s words also point us to wonder where we are in the state of poverty, an important starting point for any interventions targeting the poor. Let’s go to the available survey data. Remember, poverty, ignorance and disease were the “three ills” that incoming African governments in the 1950s and 60s – including Kenya proclaimed they would overcome.

 Poverty line

Yet we didn’t really talk about poverty until a first “official” estimate put us at a 48 per cent headcount (48 out of every 100 Kenyans living below the poverty line) in 1981.

Our first credible number came through the 1997 Welfare Monitoring Survey at 51 per cent (more than half of all Kenyans). After 1997 we had a moment, like the rest of the “developing world”, in which we put together a Poverty Reduction Strategy Paper (PRSP) with “guidance” from our Bretton Woods friends.

Kenya’s 2000 (updated to 2002) version never got off the ground as it was summarily replaced by NARC’s 2003-2007 Economic Recovery Strategy for Wealth and Employment Creation (ERS). One overarching thought in this shift was to move from entitlement to an empowerment agenda.

Our next estimates came in the 2005/6 Kenya Integrated Household Budget Survey (KIHBS) at a poverty headcount of 46.8 per cent. The second KIHBS a decade later (2015/16) dropped this to 36.1 per cent. 

To appreciate this change, the actual poverty headcount (number of people living below the poverty line) fell from 16.6 million to 16.4 million - a poverty reduction rate of 20,000 Kenyans a year (just over 50 persons per day) - in a decade in which the population rose by 10 million!

 You will not find many relating this timeline of success to the impacts of the Mwai Kibaki decade.

Where are we today? Well, KNBS now performs these poverty headcounts annually through the Kenya Continuous Household Survey (KCHS) – which also tracks the labour market quarterly. Three reports, for 2019 to 2021, were published earlier this year and they show worrying results.

The poverty headcount fell to 33.6 per cent in 2019 (15.8 million people), but then shot up - largely on account of the highly disruptive Covid-19 experience - to 42.9 per cent in 2020 (20.9 million people), essentially meaning that more than five million more Kenyans fell below the poverty line in 2020.

2021 showed a recovery to 38.6 per cent at a headcount of 19.1 million people. To put this in proper perspective, between 2015/16 and 2021 surveys, the poverty headcount rose by 2.7 million Kenyans even as the overall population grew by 4.2 million in the same period.

Calorific content

While the 2022 data may not yet be available, the trend reversal from the earlier decade is alarming. However, the lazy narrative that Covid-19 ended understates its lasting impacts.

 We are still measuring poverty, and the data so far describes overall, or absolute, poverty. Food poverty based on calorific content applied to a given food basket is another official measure used.

 As a trendline, we moved from 44.4 per cent in 2005/06 (meaning almost half of all Kenyans were food poor) to 32 per cent (14.5 million people) in 2015/16, cutting this to 30.5 per cent (14.4 million) in 2019. We jumped up to 34.4 per cent (16.8 million – or 2.6 million more) in Covid-19 2020 and went back down to 30.5 per cent (15.1 million) in 2021.

 In big picture terms, between 2005/06 and 2015/16, the number of food poor dropped by 1.25 million Kenyans (when the population grew by 10 million) and between 2015/16 and 2021, it grew by a little over half a million in a population that grew by 4.2 million.

Basically, food poverty is a challenge, but income poverty matters at least as much. In 2015/16, the rural: urban population ratio was 72:28; in 2021, it had shifted to 68:32. The proportion of poor in urban areas as a percentage of all of the poor rose from 23 per cent to 31 per cent in this period.

In direct comparison, there is greater rural than urban poverty; 39 per cent to 41 per cent in the period for the former; against 30 per cent to 34 per cent for the latter. As our politicos know, rising poverty is more prevalent in rural areas but urban poverty is rising faster.

In contrast, however, hardcore poverty – the inability to meet either food or non-food thresholds is falling, in rural areas from 10.7 per cent (3.5 million people in 2015/16) to 7.9 per cent (2.6 million in 2021), as against 3.4 per cent (436,000 in 2015/16) to 1.5 per cent (238,000 in 2021) in urban areas.

This is not a data deep dive today, but a call to better nuance our poverty discourse. This brings us to our final food for thought. How much would it cost to “finish” poverty? Beyond the poverty headcount, the poverty gap offers an estimate of the depth of poverty, or more simply, how far on average are the poor below the poverty line?

Average is the operative word here. Any estimates should be read with the caveat that not all of the poor are equally poor.  A second caveat is these estimates assume perfect targeting of every person below the poverty line.

 Now, using the data in the surveys, as loosely adjusted to the 2021 poverty line, here is a back-of-the-envelope estimate of the numbers for 2015/16 and 2021. On food poverty, you would have needed Sh41 billion for zero food poverty in 2015/16 and Sh29 billion in 2021. On overall (absolute) poverty – food and non-food – the respective numbers are Sh96 billion and Sh109 billion in those specific years. (Covid in 2020 would have required Sh144 billion).

Take the 2021 number for overall poverty. What this means is that targeting Sh109 billion towards the 19.1 million absolute poor in 2021 would have eliminated poverty that year.

Kenya needs a daily political leadership with a visionary pro-poor lens. Maybe that was Muheria’s unsaid point about maandamano’s real meaning!