Kenya ranked among most unequal societies

Kenya has been ranked among the most unequal societies in the world, indicating that steady growth that the country realised in the past five years has done little to bridge the wide gap between the rich and the poor.

A new report by the United Nations Development Programme (UNDP) on the quality of life across the globe says up to 60 per cent of Kenyans live in poor conditions with no access to quality education and health services, while a further 23 per cent are on the borderline of poverty.

Kenya ranked 103 in the list of inequality out of the total 169 countries surveyed – making it the 66th most unequal country in the world.

The finding is part of this year’s Human Development Index (HDI) – which uses a wide range of parameters such as life expectancy, access to clean water and the number of years spent in the pursuit of formal education to measure the standard of living in every country.

The HDI report shows that the quality of life for Kenyan citizens has been diluted in the past five years, pushing the country’s standing in the community of nations down one position to 128 from its ranking in 2005.

This outcome is expected to renew the intensity of a protracted debate over the distribution of the wealth Kenya has made in the past six years of steady economic growth.

Though the standard of living report is released annually, this year’s is the first to include the measure of inequality—adjusted index that ranks countries on the basis of efforts they have made to spread wealth among their citizens.

But despite its poor ranking in the inequality list, Kenya still finished ahead of all the EAC member states in the overall measure of HDI.

Uganda, Tanzania and Rwanda finished in the bottom quarter of the list in positions 143, 148 and 152 respectively.

Distribution of benefits of economic growth has been one of Kenya’s biggest challenges in its quest for long term prosperity and stability putting the suitability of the trickle-down economics that President Kibaki has used since coming to power under intense scrutiny.

Kenya’s economy expanded from Sh1.17 trillion in 2005 to Sh1.39 trillion last year, but an estimated 38 per cent of the wealth remains in the hands of 10 per cent of the population, leaving 90 per cent of the citizens to share out the rest.

The landscape gets even more skewed when viewed from the bottom end of the pyramid where the poorest 10 per cent of the population control only 1.8 per cent of the national wealth.

This level of income inequality has pushed 86 per cent of Kenyans into poor living conditions while causing serious obstacles to accessing health and education – and ultimately hurting Kenya’s score on key development indicators.

The finding on inequality only confirms the yawning gap between the haves and have-nots across the country linked to high unemployment rates, failed policy interventions, and high of corruption on government that diverts large sums of public resources meant to lift those at the bottom of the pyramid from poverty.

“A number of policy interventions like youth empowerment programmes and land reforms that needed to spur growth in key agricultural sector have either failed or are yet to be implemented,” said Prof Joseph Kieyah, an analyst at the Kenya Institute of Public Policy Research and Analysis (Kippra).

More recently, the government has responded to mass poverty with the roll out of multi-billion shilling plans meant to create jobs and shield the poorest from mass starvation.

The government spent Sh3.8 billion on small and medium sized firms last year but most of the projects have suffered under the weight of corruption and poor execution.

Large sums of money was also spent in the maize subsidy programme meant to cushion the vulnerable from high food prices but the state is estimated to have lost Sh23.4 billion to bureaucrats and political wheeler-dealers leaving the targeted segments of the population in a neutral position.

Persistence of the high unemployment rates pose the risk of widening the income gap even further.

The government estimates that the youth, in particular, suffer from a 21 per cent unemployment rate, excluding those in colleges.

“A large number of people outside gainful employment means a slide further into poverty while the few who have jobs continue to build mountains of wealth year-on-year,” Tiberius Baraza of the Institute of Policy Analysis and Research (IPAR) said.

Mr Baraza says that while reducing unemployment is a huge challenge, the government could use the tax system to stimulate job creation.

“The current tax system is unfair to the working class; it is high and erodes disposable income that the working class can use to start new investments, in effect absorbing more people into employment,” he said.

Most analysts see the renewed fight against graft under the new constitution and devolved government as the only hope of stemming the tide of inequality.

The new law provides for 47 counties, each of which is charged with spearheading development including transport, public works, health services, trade development and regulation.

Once the counties are set up, the national government will share national revenue with the regional governments with at least 15 per cent of all annual revenue collections going to the regions.

Marginalised counties will share an additional 0.5 per cent of annual revenue collections.

The new Constitution has also provides fresh momentum to the fight again graft, promising to reduce theft of billions of shillings meant for development.

In the past few weeks, Nairobi Mayor Geoffrey Majiwa, former ministers William Ruto, Moses Wetangula, and Foreign Affairs permanent secretary Thuita Mwangi have resigned to pave way for investigations into allegations of graft involving their offices.

The Kenya Anti Corruption Commission has said it is investigating four other Cabinet ministers and over 40 heads of State corporations.