18 June 2013---The living standard for most Kenyans has improved over the last ten years due to better economic conditions, a World Bank report shows.
Kenya's poverty rate is estimated at between 34 and 42 per cent at the moment, down from 47 per cent in 2005. The current figures are however based on projections since the last household survey was conducted in 2005.
"Over the last decade, Kenya's poverty has probably declined slowly, at between 1 percentage point per year, but remains at very high absolute levels about 42 per cent in 2009," the latest Kenya Economic update report focusing on poverty reduction shows.
On average, the report says Kenyans are increasingly healthy, more educated, enjoying better living conditions and are consuming more. The number of people connected with electricity and water has also been on the rise over the period.
However, there is still deep-rooted poverty in rural and remote areas of the country.
"Kenya needs higher growth to reduce poverty faster," the report says noting that with GDP growth rates of four and five per cent, average per-capital incomes are only rising by two per cent per year given that population growth rate is at a high of 2.6 per cent.
"If the wealthier are benefiting more, which is probable even not proven, the poverty reduction benefits of Kenya's moderate growth momentum have arguably been very limited," the report notes.
According to the report, Kenya can only eliminate extreme poverty by 2030 if it reduces poverty by two percentage points each year. But this will only be possible if growth is accompanied by a reduction in inequality.
"This means that the poor need to benefit to a disproportionate extent from economic growth, both through new economic opportunities and by ensuring that safety nets are adequately buffering the vulnerable from shock," the bank says.
This year, the World Bank projects Kenya's economy to grow by 5.7 per cent picking to 6 per cent next year. Kenya however needs to reduce its importing culture and focus more on exports and at the same time be able to attract more foreign direct investments.
The World Bank however warned the current growth model cannot push growth rates to 10 per cent as per Vision 2030 dreams. "The overall level of savings and investment needs to increase in order to raise the economy's potential growth," the bank proposes.
The bank is nevertheless optimistic that the new administration will unleash the potential of the country's economy.
