Kenya’s richest 1pc get almost half of ten-year wealth

Over the last decade, the wealth of this top tier has grown nearly twice as fast as over 7 million Kenyans slipped into extreme poverty, missing out on the gains of Kenya’s economic growth.

New analysis by anti-inequality charity, Oxfam, shows that nearly half of Kenyans now survive on less than Sh130 per day and have not felt the benefits of rising average incomes or sustained GDP growth.

Kenya’s economy has expanded by an average of 5 per cent per year over the past decade, yet the richest one per cent of the population captured 40 per cent of all new wealth generated in that period, its study shows.

“Kenya is becoming wealthy, but a vast majority of its citizens do not feel this,” said Oxfam Kenya’s economic governance and policy advisor Beverly Musili.

“The wealth generated is flowing to the richest, and the gap between the richest and the rest has widened.”

The wealth of the richest one percent has grown almost twice as fast as that of the rest of the population in the last two years and they now hold more wealth than 90 percent of Kenyans combined, and 13 times what the bottom half of the population owns.

Oxfam also found that the 125 richest Kenyans possess more wealth than 42.6 million Kenyans combined, underlining an inequality gap that widens each year and limits the public from sharing in Kenya's economic gains.

“This clearly shows that without redistribution, growth alone will continue to enrich the richest while deepening poverty for the majority,” Oxfam said in a policy brief after the research.

Kenya is almost twice as wealthy today as it was ten years ago, with GDP rising from Sh9 trillion in 2015 to Sh16.15 trillion last year, according to the World Bank. Yet a growing number of Kenyans struggle to afford basic needs such as food, education or healthcare.

Oxfam argues that government spending priorities continue to sideline pro-poor sectors.

“The cost of living crisis is making it hard for families to put food on the table. The number of Kenyans facing severe or moderate food insecurity rose by 17 million (71 percent) between 2014 and 2024,” the charity said. “Inflation has hit those with the least money the worst because they spend most of their income on food.”

With increasing inequality, Oxfam notes that poorer households face rising barriers to education as government funding for both basic and higher learning continues to fall.

Healthcare is also severely underfunded, leading to avoidable deaths and illnesses among poor families, while the wealthiest rely on private healthcare.

Oxfam recommends that the government increase spending on education to at least 20 percent of the budget, raise health spending to 15 percent, and allocate at least one percent of GDP to social protection.

It also proposes reducing the income tax rate for the lowest band from the current 25 percent, raising capital gains tax from 15 percent to 35 percent, and increasing rental income tax back to 10 percent as part of efforts to strengthen tax progressivity.

While the study shows that more Kenyans are falling into poverty as most new wealth goes to a few ultra-rich individuals, the latest World Bank data indicates some progress in reducing income inequality.

The Gini coefficient has fallen from 0.4 in 2015, which reflects high inequality, to 0.38 in 2022, which reflects moderate inequality.