Wide wealth gap leads to calls for pro-poor policies

Although the government pays a monthly stipend to the elderly to ease the cost of living, Zipporah Nyawira, 94, was not a beneficiary by June this year. PHOTO | FILE 

By George Omondi, omondi@ke.nationmedia.com

In Summary

• Incomes of the richest 20 per cent of the population rose steadily in the past decade to stand at 11 times more than the incomes of the poorest 20 per cent, according to a UN report.
• The report says that despite improvement on incomes, access to healthcare and education, only a small portion of the Kenyan population has benefited directly from growth.
• Each of Kenya’s 42 million citizens would earn Sh189,624 ($2,158) annually were total income distributed equally, the report says.

Kenya’s wealth remains concentrated in the hands of a small segment of the population, earning East Africa’s largest economy a place among the world’s most unequal societies, the UN’s latest human development report shows.

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The report, which was released last week, indicates that the incomes of the richest 20 per cent of the population rose steadily in the past decade to stand at 11 times more than the incomes of the poorest 20 per cent, leaving Kenya as East Africa’s second most unequal society after Rwanda.

The Human Development Index (HDI) 2014 says that despite improvement on incomes, access to healthcare and education, only a small portion of the Kenyan population has benefited directly from growth.

Each of Kenya’s 42 million citizens would earn Sh189,624 ($2,158) annually were total income distributed equally, the report says, but that is unlikely to happen any time soon as the rich continue to get richer, widening the gap between them and the poor.

The findings underline the many challenges facing President Uhuru Kenyatta’s government which, 15 months after taking power, has signalled its intention to follow his predecessor Mwai Kibaki’s path of spending big on infrastructure as a key plank of his economic management agenda.

Besides powering growth, Mr Kenyatta must grapple with the hard job of finding an effective formula for wealth distribution that can secure the country from the devastating effects of economic and social inequality.

The UN report says the income gap between the two extreme segments of the population (top and bottom) is smaller in three other East African Community member states – standing at 8.7 times in Uganda, 6.6 times in Tanzania and 4.8 times in Burundi.

Ranked by the Gini Coefficient – a measure of income gap that assigns zero to perfect equality and 100 to absolute inequality – Kenya’s score stands at 47.7 behind Rwanda’s 50.8, but 10 points above Burundi – the East African nation with the best wealth distribution with a score of 33.3 points.

Sweden, which is ranked among the world’s most equal society out of the 187 economies ranked, has a Gini Coefficient of 25 while Namibia, the world’s most unequal society, has a score of 63.7.

Overall, the UN ranks Kenya at position 147 globally with an HDI score of 0.535 for the period that ended December 2013.

The HDI is a statistical tool that the UN uses to measure a country’s achievements in social and economic spheres and is computed by tracking changes over time and comparing the scores across the globe.

Key HDI score components include the health of citizens, educational attainment and standards of living.

The UN report warns that Kenya’s poor HDI score, which has been improving at a slower pace, would slow down any efforts to move the country to the medium human development status that requires scores of 0.614 and above.

READ: 8,300 super-wealthy control two-thirds of Kenya’s economy

Kenya’s poor HDI ranking has seen economic experts call for intensification of measures that distribute the national cake to a large section of society.