Economy

Kenya strengthens welfare State with stipend for the poor

elders

Elderly people follow proceedings during the launch of the cash transfer to older persons ‘Inua Jamii’ programme by President Uhuru Kenyatta at Ihura stadium in Murang’a on Tuesday. Photo/Joseph Kanyi

Kenya on Tuesday stepped up its journey to becoming a welfare state with the launch of a social protection plan that seeks to shield the elderly and the disabled from extreme forms of poverty through monthly stipends.

President Uhuru Kenyatta launched the expanded social protection plan that seeks to cover more than one million people this financial year under a multi-billion-shilling programme that is to cover an equal number of people in all constituencies.

The initiative, which was launched in Murang’a County, seeks to raise the number of households benefiting from the government’s monthly stipend by 92 per cent from 236,839 last December to 454,200 by end of June 2014.

Senior citizens benefiting from the programme must be aged more than 65 years and will receive Sh2,000 every month  — an amount that is expected to rise over time to reflect changes in the cost of living.

At the rate of Sh2,000 per head, the Treasury will spend nearly spend Sh1 billion on the programme every month and a million beneficiaries would take the monthly spend to more than Sh2 billion a month.

The programme, which has been piloted in different parts of the country in the past three years, is initially meant to shield Kenya’s senior citizens from extreme forms of impoverishment in old age.

“Cash transfers are increasingly being accepted as an important component of poverty reduction plans,” said Labour and Social Security secretary Kazungu Kambi.

READ: WB supports plan to expand stipend for the elderly

Mr Kenyatta said that the number of senior citizens benefiting from the programme is expected to nearly triple from 59,000 people to 164,000 or a minimum of 523 people in each of the 290 constituencies.

More than 20,000 households headed by severely disabled persons are also being put on the stipend programme.

Safaricom has offered to provide mobile handsets to beneficiaries of the cash transfer who do not have the mobile gadgets to enable them receive the funds through mobile money transfers.

The President said the number of orphans and vulnerable groups benefiting from the cash stipends will nearly double from 153,139 households to 253,000 by June this year.

Besides, a total of 10,000 households in Mombasa County will continue to receive the monthly stipend under the urban food subsidy programme.

Mr Kambi said several studies had indicated that the cash transfer programmes — first launched on a pilot scale in 2007 — have reduced poverty index by 13 per cent, increased school enrolment, tamed child labour and improved food security in many households.

On Wednesday’s launch came four months after the Treasury signed a Sh22 billion concession loan with World Bank to boost the government’s social protection programme.

READ: Treasury gets World Bank boost for cash transfers

The World Bank’s loan was sought after the Treasury secretary Henry Rotich allocated Sh13.5 billion in the 2013/14 for social protection and welfare plan.

Up to 46.7 per cent of Kenya’s 44 million population (about 21 million people) are too poor to meet the basic needs.

Going by the 2009 population census, about 2.7 per cent of the Kenya’s population is aged 65 and above.

The government estimates that number to have risen to 1.2 million by December 2013 - 529,873 male and 678,124 female.

The social protection programme launched yesterday marks a significant step in Kenya’s calculated move to social welfare society that began in earnest with the Kibaki administration’s free primary education programme in 2003.

Previous regimes have mainly concentrated on subsidising social services such as basic education and primary healthcare.

It remains to be seen what safeguards the government will put in place to shield the welfare programmes from rampant corruption and leakage of funds that have dogged past initiatives.

The State is also expected to face a Herculean task accommodating the high cost of such programmes in its overloaded expenditure plans without busting the budget.

Welfare plans, better known as social entitlements, have been at the centre of public policy battles in Europe and America and have been blamed for the budget crises facing many governments across the world.  

On Wednesday, officials maintained that the social welfare programmes would minimise existing social inequalities.

“These programmes have worked in countries such as Mauritius and we expect the same to happen here,” said Kabete MP George Muchai.

In India, for instance, Parliament passed a law last September guaranteeing access to subsidised food to nearly 70 per cent of its 1.2 billion populations.