Pandemic woes drove up Kenya’s urban poverty rate
Urban poverty in Kenya increased by 15.7 percentage points between 2019 and 2020, soaring from 26 to 41.7 percent as the economic fallout from the Covid-19 pandemic hit populations in towns and cities.
This setback, which affected about 2.6 million people, temporarily reversed the progress Kenya had achieved in its ongoing battle against poverty, underscoring the vulnerability of urban populations to external shocks such as a global health crisis.
The World Bank’s Kenya Poverty and Equity Assessment (KPEA) 2023 – From Poverty to Prosperity: Making Growth More Inclusive report, which focuses on the years from 2005 to 2021 says at the national level, the poverty rate increased by 9.3 percentage points to 42.9 percent.
Increase in poverty
Beyond the urban centers, rural areas experienced an increase in poverty as well, albeit at a slightly lower rate of 6.5 percentage points, moving to 43.5 from 37 percent.
“Not only did poverty increase between 2019 and 2020, but the number of poor individuals also rose. Nationally, the increase was about 5.1 million; 2.6 million in urban areas and 2.4 million in rural areas,” said the World Bank.
Despite some signs of recovery in 2021, Kenya grappled long-term impact of Covid-19 pandemic as the poverty rate persisted at 37.3 percent, surpassing pre-pandemic levels.
The profound shift from initially positive growth to negative figures for both the bottom 40 percent and the total population underscored the persistent challenges stemming from global shocks.
Post-pandemic, Kenya grappled not only with the consequences of the pandemic but also with the effects of the worst drought in half a century, high inflation, and soaring fuel prices, creating a protracted path to economic recovery.
The World Bank’s KPEA 2023 report also sheds light on how the wealthy urban population also felt the brunt of the pandemic. Kenya’s urban rich experienced a drop in consumption expenditure, indicating a significant decline in the spending patterns of affluent households during the onset of the pandemic.
“The sharp drop in the welfare of richer urban households was associated with a fall in the Gini index from 40.7 to 35.8 in 2020, but it then increased to 38.7 in 2021 following the economic recovery. In absolute terms, inequality is highest in urban and non-ASAL areas,” the report reads in part.
This unexpected shift underscores the pervasive economic impacts that reached even the traditionally more insulated urban segments of the population.
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Economic recovery
While the economic recovery in 2021 exhibited positive strides, it also brought forth a concerning trend—increased inequality mirroring pre-pandemic levels. Notably, the Gini index, a widely accepted measure of inequality, had declined from 45.0 in 2005/06 to 40.7 in 2015/16, signifying progress.
However, the subsequent slight increase in 2019, attributed to slower growth among the poorest households in both rural and urban areas, revealed the fragility of Kenya’s economic fabric.
The delicate balance between recovery and rising inequality now stands as a critical challenge for Kenya as it navigates the aftermath of the pandemic, even as the Bank urged policymakers to adopt better strategies to drive inclusive and sustainable growth while tackling poverty.
