01.03.04. Poverty and inequality | Kenya

01.03.04. Poverty and inequality | Kenya

02 Mar 2022

Even though Kenya is recognized as a lower-middle income country, most of its residents continue to live below the poverty line in rural areas. Poverty levels vary across different cities and towns in Kenya with a lower incidence of multidimensional poverty in Nairobi (capital city of Kenya) and satellite towns such as Ruiru (22%) and Thika (27%). This figure is higher in other cities such as Mombasa (44%) and Kisumu (46%). Additionally, location-based horizontal inequality estimates are higher in the capital city and Thika town. Although these urban centers show relatively lower overall poverty levels compared to other urban centers, they register higher inequalities in deprivation scores between their different sub-locations (Shifa & Leibbrandt, 2017).

Nevertheless, Kenya’s level of inequality is moderate in comparison to Tanzania, Uganda, and Ghana as the Gini index dropped from 0.45 in 2005/06 to 0.39 in 2015/16 while in rural areas it fell from 0.37 to 0.33, demonstrating a remarkable positive change for an indicator that seldom changes over time (International Bank for Reconstruction and Development/The World Bank, 2018). The current monetary and non-monetary poverty indicators in Kenya are better than most countries in Sub-Saharan Africa. Specifically, Kenya’s adult literacy level is among the highest in Africa and performs better in access to improved sanitation compared to countries with a similar poverty headcount (World Bank Group, 2018).

There is very low financial protection from catastrophic health expenditure under the current health insurance system in Kenya. The absence of Universal Health Coverage (UHC) and the considerable costs associated with accessing health care often drain household resources. This has predisposed an estimated 1 to 1.1 million individuals (not only from lower income groups but also those with middle and higher income) to a high risk of being pushed or trapped into poverty (Salari et al., 2019).


International Bank for Reconstruction and Development/The World Bank. (2018). Fiscal Incidence Analysis for Kenya: Using the Kenya Integrated Household Budget Survey 2015/16. Washington, DC. https://openknowledge.worldbank.org/bitstream/handle/10986/30263/Kenya-Fiscal-Incidence-Analysis.pdf?sequence=1&isAllowed=y

Salari, P., Di Giorgio, L., Ilinca, S., & Chuma, J. (2019). The catastrophic and impoverishing effects of out-of-pocket healthcare payments in Kenya, 2018. BMJ Global Health, 4(6). https://doi.org/10.1136/bmjgh-2019-001809

Shifa, M., & Leibbrandt, M. (2017). Urban Poverty and Inequality in Kenya. Urban Forum, 28(4), 363–385. http://doi.org/10.1007/s12132-017-9317-0

World Bank Group. (2018). 17th Edition of the Kenya Economic Update: Policy Options to Advance the Big 4 – Unleashing Kenya’s Private Sector to Drive Inclusive Growth and Accelerate Poverty Reduction. Nairobi, Kenya. https://openknowledge.worldbank.org/handle/10986/29676