Economic trends
The structural problems of the economy could be seen as a symptom of the weak culture of democracy in Kenya. Growth has been low or non-existing taking population increase into account and poverty – by all means of verification – has gone up the last 10 years.
The elections in the end of 2007 and the world-wide financial crisis 2008-2009 have slowed down the positive development in Kenya.
Before the elections in 2007 some weak positive trends could be seen. Growth was picking up, although not as fast as expected. During the last years, the tourism sector as well as production of horticulture or non-traditional agriculture products for export have become increasingly important to Kenya’s economy.
Corruption remains a formidable challenge to the Government, the society, the economy and development efforts, including poverty reduction.
Many countries and international organisations cooperate with the Government of Kenya in efforts to create sustainable development with the main objective to reduce poverty.
The Government’s budget still remains with three major structural problems namely: 1) the in-proportionally large wage bill in relation to the revenues, 2) the large repayments and dependence on domestic borrowing and 3) loss-making and inefficient parastatals. Theses three factors crowd out investments in development and it is calculated that only 20% of the budget is discretionary and spent on development out of which donors provide 50% (of the 20% e.g approximately 10% of the overall budget).
Inflation on in particular food and energy hits the poor in particular since the main expenditures for the poorer segments of the population consist of transport and food.
Trends in Poverty and Health
The situation as regards poverty and inequality paints a picture with approximately over one half of the people, including almost 9 million children, living below the poverty line. Kenya was ranked as 147 out of 175 countries in the Human Development Index 2004. Patterns in inequality as how regional disparities and gender disparities as well as a large gap between the richest 10% and the poorest 40 percent.
Health indicators have showed a significant drop according to the Kenya Health and Demographic Survey 2003 (KDHS). However, infant- and maternal mortality rates have increased the last 5 years. The reasons given are the lack of co-ordination between government initiatives and donor support and lack of effective and democratic governance as well as inconsistency between health policies and the health budget. The Ministry of Health has responded to the results of the study by initiating a new planning tool for the public health system. This includes an annual operational plan with clearer indicators for prevention of infant- and mother mortality rates and other significant indicators. Development partners have welcomed this initiative as an effort to both address governance and service delivery.
The KDHS showed that the fertility rate had gone up from 4,7 in 1997 to 4,9 in 2002 leaving Kenya with one of the lowest fertility rates in sub-Saharan Africa. In the KDHS, The HIV/AIDS rate was measured more substantively and broader than before. The overall prevalence rate was 6,7% and for women 8.7 % compared to the sentinel HIV/AIDS survey that showed 9.7% for all and 9.4%for women. The unequal power relations between women and men in the Kenyan society is the main explanation for higher figures for women.
HIV/AIDS continued to remain the main threat to socio-economic development of individuals, communities and Kenya at large. All sectors are experiencing the destabilising force of HIV/AIDS. 60 years in 1993 to 47 years in 2003 with all the implications on human sufferings that it initials. The latest rapid assessment of HIV/aids orphans counted 1.7 million HIV/AIDS orphans in Kenya.
The standard figure for people living below the poverty line is 56% and originate from a household survey done 1997. However, as preparation for the CG meeting the World Bank prepared a Country Economic memorandum. This Memo revisit the method used in the 1997 survey and concluded that poverty levels could be up to 10% lower then the figure of 57% living below the poverty line.