Millions more Kenyans are now classified as living in extreme poverty following a change in the World Bank’s global poverty benchmark.
In June, the international lender raised its poverty threshold from $2.15 to $3 per person per day, based on 2021 Purchasing Power Parities (PPPs). The adjustment is aimed at capturing the rising cost of basic goods and services, such as food, clothing, and shelter, across low- and lower-middle-income countries.
In Kenya, the change has wide-ranging implications. At the previous threshold, the World Bank estimated that around 11.6 million Kenyans lived below the poverty line in 2024. That number is now expected to rise sharply.
A household of four earning Ksh 1,111 per day (roughly Ksh 277 per person) was previously considered above the poverty line. But with the new benchmark set at Ksh 387 per person, or Ksh 1,550 for the household, such a family is now classified as extremely poor.
Regional disparities
Poverty in Kenya remains unevenly distributed. Rural and arid regions, especially in northern counties like Turkana, Marsabit, and Wajir, continue to record the highest poverty rates, while urban areas such as Nairobi and Mombasa tend to fare better.
Still, urban poverty is a growing concern, particularly in informal settlements where rising food and fuel prices have left many families struggling to afford necessities. Inflationary pressures and a liquidity crunch in 2024 further eroded household incomes.
The World Bank estimates that 838 million people globally were living in extreme poverty in 2022 under the new $3 line, with Sub-Saharan Africa accounting for over 550 million. Kenya’s share is expected to increase following the adjustment.
Policy consequences
The new threshold is expected to affect how the Kenyan government targets social protection programs, such as cash transfers, food subsidies, and healthcare support.
The shift also has implications for the country’s Vision 2030 goals, which include poverty reduction and more equitable economic growth. Kenya’s GDP has grown at an average of 5% annually over the past decade, but many households have seen little benefit.
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The informal sector, where most low-income earners work, remains underproductive and vulnerable to shocks. The country’s inequality levels, measured by a Gini index of 40.8% in 2015, continue to pose a challenge.
A 2023 World Bank assessment recommended improving access to finance, infrastructure, and vocational training to help low-income households lift themselves above the poverty line. Agriculture, where most rural families earn a living, was identified as a priority area for investment, particularly in climate-resilient techniques.
Despite gains in education and health, large gaps persist. Kenya has made progress in reducing child stunting and boosting primary school enrollment (82% in 2024), but secondary school completion remains low at 45%. Access to clean water, healthcare, and stable employment remains limited in many areas.
The updated poverty line highlights the vulnerability of households that were previously considered non-poor. Many sit just above the line and are highly susceptible to shocks, whether economic, climatic, or health-related.
Opportunity to refocus
Development partners, including the World Bank and the International Finance Corporation, are currently supporting over $6.5 billion in active projects in Kenya. These include investments in digital infrastructure, renewable energy, and agriculture.
Private sector funding is also increasing, with the Multilateral Investment Guarantee Agency managing a $608 million portfolio across sectors such as energy, fintech, and transport.
The Kenyan Treasury has projected Sh2.668 trillion in tax revenue for the 2024/25 fiscal year. Some of these funds could be used to expand social safety nets and invest in services that promote income growth among the poor.
The United Nations aims to end extreme poverty by 2030 under its Sustainable Development Goals. Experts say that adjusting the poverty threshold is a necessary step in identifying those most in need, but warn that it must be followed by targeted, well-funded interventions.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.