Economy

Half a million Kenyans out of extreme poverty

poor

Nearly half a million Kenyans were lifted out of extreme poverty last year as the country bounced back from the ravages of the Covid-19 crisis. FILE PHOTO | NMG

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Summary

  • Nearly half a million Kenyans were lifted out of extreme poverty last year as the country bounced back from the ravages of the Covid-19 crisis that condemned 1.2 million to living below the poverty line.
  • World Bank macro poverty outlook estimates the country’s extreme poor, who live below $1.9 (Sh220) a day, reduced from 19.2 million or 35.7 percent of the population in 2020 to 18.8 million or 34.3 percent in 2021.
  • The bank says Kenya was making strong economic progress prior to the Covid-19 pandemic, with real GDP growing at an annual average rate of five percent and poverty reduction that saw extreme poverty decline from 45.2 percent in 2009 to 34.4 percent in 2019.

Nearly half a million Kenyans were lifted out of extreme poverty last year as the country bounced back from the ravages of the Covid-19 crisis that condemned 1.2 million to living below the poverty line.

World Bank macro poverty outlook estimates the country’s extreme poor, who live below $1.9 (Sh220) a day, reduced from 19.2 million or 35.7 percent of the population in 2020 to 18.8 million or 34.3 percent in 2021.

The global lender projects Kenyans living below the poverty line will fall further to 18.7 million this year as the economy recovers.

The bank says Kenya was making strong economic progress prior to the Covid-19 pandemic, with real GDP growing at an annual average rate of five percent and poverty reduction that saw extreme poverty decline from 45.2 percent in 2009 to 34.4 percent in 2019.

However, in 2020, about 1.2 million Kenyans sank into extreme poverty on the fallout of the Covid-19 crisis, surviving on less than $1.9 a day, reversing the gains.

“With GDP growth projected to average 5.2 percent over 2022–24, growth in real per capita incomes will help reverse the rising poverty rates caused by the pandemic. Poverty is expected to fall to 33.4 percent in 2022, below the pre-crisis level of 34.4 percent (2019),” World Bank said.

In Kenya, Covid-19 saw most casual labourers laid off and were affected with the curbs imposed by the government to contain the spread of the virus.

The low-skilled workers also faced lower pay even as jobs resumed and companies sought to contain costs of production.

The annual economic survey by the Kenya National Bureau of Statistics (KNBS) shows private firms raised average monthly pay by 2.24 percent last year the slowest pace in 11 years.

The poor are also hit hardest by inflationary pressures that eroded the country’s real wage by negative 3.83 percent last year, down from negative 0.59 percent in 2020.

Although the recovery of the economy has seen those who lost jobs in 2020 return to gainful employment, the real wages, adjusted for inflation, will take longer to recover.

Kenya’s economy rebounded to 7.5 percent in 2021 compared with contraction of 0.3 percent the year before that saw the economy create 926,100 jobs, the highest number in six years.

The bank warns that the poor risk further erosion of their incomes on poor weather and vulnerabilities of tourism.

“Kenya’s economy relies on tourism and rain-fed agriculture, and is vulnerable to climate change and extreme weather events such as the severe drought currently affecting the north-east of the country”.

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