Draft:Poverty in Kenya

Description

Poverty in Kenya refers to the unpleasant current situation of the economy in Kenya. Now, the population in Kenya is 38.3 million while forty-six percent of people are living below the poverty line. In the World Poverty Clock report, Kenya ranks eighth with the largest amount of people living in extreme poverty globally and ranks sixth in Africa.  Some factors work together and finally lead to this issue. Although the gross domestic product (GDP) is rising moderately, the poverty in Kenya does not change considerably. However, the poverty rate had dropped sharply over the past ten years. “The significant improvement in the living standards of the majority of Kenyans is attributable to government’s investments in infrastructure and social sector,” said Finance Minister Henry Rotich.

General Background

Kenya achieved independence in 1963. After independence, the gross domestic product of Kenya had a period of rapid growth. GDP raised at a yearly average of 6.6 percent from 1963 to 1973 and 7.2 percent during the 1970s.  In the same time, the production of agricultural increased by 4.7 percent.

However, during the 1980s and 1990s, Kenya experienced a tough time in the economy. The worst economic performance was shown from 1991 to 1993, the development of GDP was stagnated and the inflation up to 100 percent in August 1993. Kenya government tried some measures to change the slide, but the measures did not work well. The annual average economic growth was only 1.5 percent from 1997 to 2002 while the percentage of population growth is higher than that, which led to the decrease of per capita incomes.  Worse, Kenya government lost the support from International Monetary Fund (IMF) and World Bank in 1997 and 2001 due to the failure of Kenya government of meeting commitments about governance.

When President Kibaki governed Kenya, the government resumed the cooperation with the IMF and the World Bank and started economic reform program. These did improve a lot, but because of the violence accident of general election in 2007 and influenced by the global financial crisis and drought, the economic situation was still not changed considerably. And the poverty issue remains until now.

Cause of poverty

Both natural factors and social factors lead to poverty in Kenya.

Corruption

Government corruption was serious in Kenya, which made money do not be appropriately used to the public. According to Transparency International, Kenya was one of the most corrupt nations in the world. In every level of government, the issue of bribes, fraud, and tribal favouritism were not surprising to find.  The corruption sectors including the judicial system, police, public services, land administration, tax administration, customs administration, public procurement, natural resources, legislation, and civil society. Too much administrative regulations and rules hindered the foreign investor positivity due to the concern of time and resource. However, in the early 2000s, the government started to improve these problems.

The lifestyle and the way of people thinking

The local people got used to the lifestyle – “Hakuna Matata”. They preferred to adapt current living and do not worry or make any plans for future. Also, the rich people in Kenya did not take their responsibility to help poor people and develop their country.

A single economic structure

Another reason is about 75 percent of Kenya people rely on agriculture while the frequent unstable weather causes massive damage to agriculture every year, which influence the development of the economy.

Population balloon

More money is required in a  family with lots of children. In Kenya, the low-income family had 4 to 6 children on average, and four children were a satisfied number in their mind according to a survey in 2011. This fertility attitude raised the level of poverty in Kenya.

Lack of education

Limited education resource made people had fewer opportunities to gain knowledge and techniques. The number of teachers and the size of the classrooms was not enough in Kenya. In poor areas, the students even could not afford a pencil.

Terrorism

In order to fight against terrorism, the Kenya government has already spent a massive amount of money. In Somalia, Kenya launches military operations against AI Shabaab. The intense terrorist campaign led to the reduction of capital inflows. Because the foreign investors afraid the safety of themselves and they held a negative attitude towards the future of Kenya economy.

Potential economic development

The international monetary fund had identified seven parts as potential economic development for the future of Kenya. These sectors are tourism, agriculture, trade, business services, financial, oil and manufacturing sector. In 2014, tourism and agriculture were being regarded as priority sectors.In recent decades， the age group structure is changed. Kenya has a larger working-age population, which provide the rich workforce to develop Kenya in the future as long as Kenya government can invest more in education and training. Also, the government should provide more job opportunities. Or the advantage will be wasted. The world bank believes Kenya has the potential to be the successful one in Africa due to its highly skilled workforce, growing youthful population, improved infrastructure, the dynamic private sector, the advanced constitution and its crucial role in East Africa.

Current hinder of economic development

Both the internal environment and the external environment will have the negative influence on the development of Kenya.

political uncertainty will affect investors and capital inflows. Some investors closed their companies due to lacking the sense of safety, which led to the higher unemployment rate. Also, the severe unemployment issue cause early pregnancies, drugs abuse and crime. The dangerous domestic environment also made tourism lose some opportunities to develop further. Moreover, unpredictable weather patterns influence the harvest of agriculture. Regional droughts and floods cause less progress on Kenya poverty reduction.

The external risks are about the prospects for global recovery and unfair trade between Kenya and developed countries. Developed countries like the United States and some European Union countries export amount of products to Kenya. However, in order to protect their domestic products, these developed countries applied high tariffs on imports from Kenya, which impeded the export of Kenya product.

What Kenya government done to the poor people

According to a report on October 11, 2018, over 60 percent of direct cash transfer was successfully used to help the poorest 40 percent of the population. Kenya government has tried a lot to help the poor although the support is still not cover some poor people due to the lack of existing support program.

Education

Kenya government try to improve the quality of public education. Because the gap in education is vast between rich people and poor people in Kenya. Most rich people choose expensive private school, which has new facilities and better environment.

Health

Millions of people in Kenya find it hard to pay the money for health services. So Kenyan government launched the collaborative Health Insurance Subsidy Program(HISP) in April 2014. HISP provided the poor people with a health insurance subsidy which can decrease the financial risk to poor people. Also, the government spent 60 million dollars to health in 2016 and 2017, and it increased 55 percent of investment in health sector.

External links

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