Countries asked to create wealth, promote equity to get millions of people out of poverty

Monday November 24 2014

For communities such as the one to which this mother and child belong, it is normal to live on less than $1.25 a day. PHOTO | FILE

For communities such as the one to which this mother and child belong, it is normal to live on less than $1.25 a day. PHOTO | FILE 

By JEFF OTIENO, The EastAfrican

Early this year, Kenyans reacted with shock when a family in Turkana County in northwest Kenya roasted two puppies for dinner, following a severe famine.

The pictures of the family seated around the roasted puppies became a major topic on social media for many days.

According to county administration officials, the woman said she had no alternative but to roast her puppies because she could not sit and watch her children die of hunger.

Though relief food was immediately sent to the family, it revealed the magnitude of poverty in some of the country’s remote areas, where harsh climatic conditions reign supreme, to say nothing of the limited opportunities available for escaping the problem.

In fact, according to the latest Socio-Economic Atlas of Kenya report, Turkana is one of the counties with the highest number of people living below the poverty line or less than $1.25 a day.

Although the national poverty rate has fallen marginally from 46 per cent to the current 45.2 per cent in the past few years, the main worry is the 17 million Kenyans (nearly half of the country’s population) who still live on less than $1.25 a day.

Some economists believe the number could be higher given the fact that the figure quoted was based on the 2009 census, which had the total population at 38 million. The World Bank currently puts Kenya’s population at 44.35 million.

“Clearly, poverty reduction must remain at the top of the country’s development agenda,” says the recently launched Socio-Economic Atlas, which highlights socio-economic development indicators based on the 2009 Population and Housing Census and 2005/6 Kenya Integrated Household Budget Survey data.

The problem is not confined to Kenya since other East African Community member states are also grappling with poverty.

As the 2015 deadline approaches for countries to meet the first Millennium Development Goal of halving the number of people living below the poverty line, millions in the region are still caught in the poverty trap.

“I do not see any of the East African countries meeting the MDG target of halving poverty by next year. They still have a lot to do to improve the standard of living and create more opportunities for their populations,” said Robert Lwanga, a consultant on development issues.

Burundi, a country that has suffered years of instability due to internal conflict, has the highest percentage of people living below the poverty line, followed by Kenya.

According to World Bank figures, 66.7 per cent of Burundians live below the poverty line. In other words, out of a population of 10.16 million, 6.8 million are considered poor.

“The recent human development index showed that seven out of 10 Burundians still live on less than $1.25 a day. It means Burundi must achieve and sustain high economic growth rates over a long period to pull more people out of poverty,” said Mr Lwanga.

The situation in Rwanda is also of concern. According to the country’s third Household Living Conditions Survey (2010/2011), out of the 10.7 million Rwandans, 45 per cent, or 4.8 million, still live on less than $1.25 a day.

Despite the challenge, Mr Lwanga cited Rwanda as one of the countries on the right path in fighting poverty.

“Five years ago, records show that those living below the poverty line were 57 per cent of the population, now they are down to 45 per cent. Though the government needs to do more, we must accept it is an improvement given the fact that the country experienced a genocide two decades ago,” he added.

Tanzania is also grappling with the problem. According to the 2011/12 Household Survey Budget, 28.2 per cent, or 13.9 million, of Tanzanians were found to be living below the basic needs poverty line, while 9.7 per cent (4.8 million) were below the food poverty line.

However, the World Bank cites the East African country as one of the top 10 with the largest share of global extreme poor going by 2011 estimates.

According to the financial institution, India has the largest share (30 per cent), followed by Nigeria (10 per cent), China (8 per cent), Bangladesh (6 per cent), the Democratic Republic of Congo (5 per cent), Indonesia (4 per cent), Ethiopia (3 per cent), Tanzania (2 per cent), Pakistan (2 per cent) and the rest of the world (28 per cent)

In East Africa, Uganda has the lowest percentage of people living below the poverty line, thanks to its sustained economic growth of above five per cent. However, many will agree that the fight against poverty is still a long way from being won.

According to the 2012/13 Uganda National Household Survey, the proportion of Ugandans living below the poverty line currently stands at 19.7 per cent, or 7.4 million people in absolute terms. This is an improvement on the 2009 figures that placed the poverty levels at 24.5 per cent.

“Uganda has tried. In 2004, for example, poverty levels were at 38 per cent, while in 1993, they were at a record high of 56.4 per cent. But nobody will contest the fact that the country still needs to put in more effort,” added Mr Lwanga.

Like the rest of its neighbours, Uganda is concerned those living just above the poverty line could fall back into the trap exists, given the fact that the country’s population is growing at an alarming rate of 3.4 per cent annually and that 50 per cent of the country’s development budget is still funded by donors.

In Kenya, for example, though more than 20 million people — about 55 per cent of the population — are considered non-poor, many live just above the poverty line, meaning that the chances of their falling back into the poverty trap are high.

Create more wealth

Prof Joseph Kieyah, a principal analyst at the Kenya Institute for Public Policy Research and Analysis (Kippra), says though the issue of equity is critical, East African countries also need to create more wealth and use their resources efficiently to effectively tackle poverty.

“In Kenya, for instance, though the Constitution stresses equity, we should not forget to focus on wealth creation,” said Prof Kieyah.

In some sub-locations in the big cities, for example, the poverty rate is zero per cent, meaning no-one there is considered poor, while in some remote areas, it is as high as 100 per cent, in other words, everyone is poor.

The same situation applies at the county level, where comparisons reveal stark contrasts. The counties of Nairobi, Kiambu, Kirinyaga and Nyeri have a poverty incidence below 30 per cent, meaning that seven out of every 10 people are non-poor, while the three counties of Wajir, Mandera and Turkana have an incidence of roughly 85 per cent, meaning that eight to nine out of every 10 people are living below the poverty line.

Prof Kieyah said that though devolution can help the country tackle poverty, counties need to start thinking about the resources available in their areas and how they can be used to create more wealth.

“County governments have to start looking at ways of generating their own revenue to supplement what they get from the national government.

At the moment, they are asking for more money from the national government even though some of the money given to them remain unspent or not used well,” he said.

To effectively fight poverty, East African governments must focus on arid and semi arid areas, which tend to have higher poverty rates than high agriculture potential areas, or regions normally referred to as bread baskets.

In Kenya, the Socio-Economic Atlas report shows that poverty rates are low in the high agriculture potential areas of central and Rift Valley, compared with the semi-arid and arid areas of northern Kenya, which are characterised by low rainfall and prolonged dry periods.

“When moving from high-potential areas with semi-arid and arid parts of Kenya, a steep gradient becomes visible along which poverty incidence increases to 70 per cent or more,” the report says.

In cities and towns governments need to concentrate on slums, where the bulk of the poor are found. Though the economic potential of towns and cities generally reduces the poverty incidence and increases mean wealth, disparities within urban centres are pronounced.

Slums in Nairobi, Kigali, Kampala and Dar es Salaam, for example, have higher poverty incidence than the leafy suburbs of the respective cities, where most of the rich reside.

“The Atlas depicts interlinkages of poverty and natural resource use that will aid the government in making informed decisions on planning matters,” said Devolution Cabinet Secretary Anne Waiguru.

The country will need more socio-economic interventions, since the poverty gap in some counties is as high as 70 per cent, more than five times the overall poverty gap, which stands at 12.2 per cent.

In fact, the poverty gap indicator describes how far below the poverty line a given population of poor in a specific area lives. In Tana River, for example, the poverty gap is widest at 73.3 per cent.

“An average poor person in Tana River would have to double his or her material means just to reach the poverty line; and an average person in the poorest sub-location would have to quadruple his or her means to climb out of poverty,” the report says.

Counties in the high-potential areas of central and western Kenya display relatively narrow poverty gaps of less than 10 per cent and have low to medium poverty incidence.

The same applies to most urban areas, where both poverty gaps and poverty incidence are smaller than in the majority of rural areas.

According to the report, it is less costly to lift the underprivileged out of poverty in areas that are relatively well off, since they tend to be less poor than their counterparts in remote parts of the country.

The document also calls for concerted efforts to tackle poverty, saying high poverty rates constrain national development by reducing overall domestic demand, hindering socio-political participation, and preventing realisation of a particular population’s full potential.

Despite the challenges, Principal Secretary for Planning Peter Mangiti said Kenya has registered significant milestones in improving the general welfare of its citizens.

“Various government initiatives have been implemented to improve the welfare of Kenyans through targeted resource allocation at lower levels of governance. These initiatives include the Constituency Development Fund, the Orphans and Vulnerable Children Programme, the recent allocation of county budgets and the Uwezo Fund,” Mr Mangiti said.

Dr Moses Ikiara, managing director of the Kenya Investment Authority, concurred with Mr Mangiti’s sentiments. Dr Ikiara said that though more needs to be done, progress has been made in lifting Kenyans out of poverty.

“Before the 2007 post-election violence, the country had managed to reduce the percentage of people living below the poverty line from 55 per cent to 46 per cent. However, the violence negatively affected the positive results. We need to continue registering sustained economic growth going forward and to effectively tackle the problem,” he added.

Dr Ikiara said that Kenya needs to focus on the agriculture sector — the main contributor to the country’s gross domestic product — and the small to medium enterprises, which are fast becoming major sources of employment.

“I believe devolution can help us achieve the goal. Though the system is currently undergoing teething problems, it will eventually come out as one of the best policy decisions made when we voted for the new Constitution,” he added.