Determinants of Poverty in Kenya

Abstract

Introduction: Poverty continues to be one of the major concerns of economies of the day. Developing countries in particular have found it very key in their development agenda as it affects economic growth and development. The conclusion of the Millennium Development Goals has seen a shift from eradication of extreme poverty and hunger (MDG1) to the Sustainable Development Goal of ending poverty in all its forms everywhere (SDG1) by 2030. In Kenya, poverty continues to be a challenge with an average of 45.9 per cent poverty rate reported in 2005. Objectives: This study was set to identify the determinants of poverty in Kenya. As a contribution to existing research work on determinants of poverty, the study seeks to find out whether county of residence contributes to poverty. Lastly, the study was to identify policy implications to reduce poverty in Kenya. Methodology: Logit model is used to derive the determinants of poverty using Stata software. The study used poverty based on consumption per capita as the dependent binary variable with several independent variables that include household characteristics taking into consideration that household is the unit of analysis. The study used the Kenya Integrated Household Budget Survey (KIHBS) data collected in 2005/06 by the Kenya National Bureau of Statistics (KNBS). Findings: The study shows that poverty is determined by the household size, occupation, gender, marital status and level of education of household members. The study also shows that poverty is determined by the area of residence of a household (rural or urban) and the time taken to collect water as well as to travel to the place of work. Most importantly, the study show that county of residence determines poverty, with some counties being poorer than others.Policy Implications: The study proposes valuable policy implications necessary to sustainably reduce poverty. These include: improvement of the rural areas through infrastructure development and industrialization; modernization of the agricultural sector to add value to primary produce; adoption, promotion and improvement of the quality of education infrastructure policies; and the initiation, promotion and improvement of county specific poverty reduction policies by different counties depending on the factors that drive their populace into poverty. Moreover, sanitation policies should be updated to deal with wastes disposal and management including the upgrading of slums that are a bedrock of poverty in the urban centers. We recommend that both the National and the County Governments in Kenya collaborate and uptake these poverty reduction policy implications and incline them into their development agenda towards sustainable eradication of poverty in all its form in order to attain a “Globally competitive and prosperous Kenya by 2030” Conclusion: The study concludes that county of residence is a major determinant of poverty alongside other household characteristics. These include household size; level of education of household members; occupation of household members; time taken to collect resources such as water and the transport infrastructure