Friday 3rd October 2014: Middle Income Country, What of Inequalities?

Kenya has transitioned into a middle income country (MIC) 16 years ahead of projected time. Our Gross Domestic Production (GDP) has risen by 25 percent and the average per capita income, also known as income per person, in Kenya has grown to USD.1,246, approximately Kshs.111,200, such news sounds good right, but does this reflect the reality on the ground, what should the average Kenyan make of this new development?

Simply put, being a MIC means that the country’s economy has grown, but it says very little about whether the average Kenyan is growing as well. Poverty levels in the country remain at 45.9 percent and life expectancy is at 61 years, that’s according to a 2013 World Bank Report.

Inequalities on the other hand are extreme. Out of a population of 522,830 in Wajir County, only 2,242 people can afford to spend Kshs.7,200 or above. Lifestyle and access to services differ across the country, Nairobi residents have 2.2 times more access to secondary education than the average Kenya. 93 percent of residents in Loima Constituency in Turkana County have no education, compared to Makadara Constituency, in Nairobi County, where only 8.2 percent of the population has no education, a difference of about 85 percent.

Kenya’s new status as a MIC cannot be considered a mere budge of honour or a statistic to be pulled out when it serves the purpose of politicians and others. It must translate into practical social and economic development felt by the ordinary person. More needs to be done to address gross inequalities across the country, corruption and misappropriation of funds. Key in reforms should be enhanced public finance management to address inequities across the country.  

Key facts:

  • People with no access to education in Kenya are almost twice as likely to have no work as people with secondary education or more.
  • Employment for pay is highest among people with secondary education or above in both rural and urban areas.
  • Lack of essential services like education leads to continued poverty and vulnerability.
  • When there is high inequality & national economic growth,  those at the top benefit the most,
  • When there is high inequality & economic downturn strikes, those at the bottom of the income scale are the most vulnerable,
  • In high inequality situations, focusing exclusively on economic growth & income generation as development strategy may lead to accumulation of wealth by a few & worsen poverty of many,
  • In more equal countries, economic growth translates into reduction in poverty levels,
  • Economic growth, though necessary for poverty reduction may increase inequality,

 

Economic growth, as indicated in Kenya’s GDP growth, should be inclusive. Relevant institutions should ensure that public finance is managed prudently. Rebasing for the purpose of sovereign rating is a good thing for the economy as Kenya joins the league of emerging economies, but as noted earlier, this growth must translate into practical social and economic development felt by the ordinary person.    

 

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