Kenya: Resources for poverty eradication

Blog post by Karen Rono, Analyst at the Development Initiatives Nairobi Office. Karen can be contacted at karen.rono@devinit.org.

A comprehensive background analysis on resources for poverty eradication in Kenya reveals that the funding priorities of the government of Kenya (GoK) and donors are different. This was revealed through the analysis of the GoK’s public expenditure in, and donor contributions to, the education, health and agriculture sectors between 2002/03 and 2011/12. These sectors play a critical role in poverty eradication.

Findings

The proportion of Kenyans living below the national poverty line fell from 52.2% in 1999 to 47% in 2005. Uganda had the lowest proportion living below the national poverty line (24.5%) followed by Tanzania (33.2%) and Ethiopia (38.9%).  According to the Multidimensional Poverty Index (MPI) 2011, 47.8% of Kenyans were in multidimensional poverty. These are the lowest poverty rates in the region; elsewhere in the region countries all have above 50% of their population in multidimensional poverty (led by Ethiopia 88.6% and Burundi 84.5%).

Government expenditure increased from US$4.3 billion in 2002/03 to US$15.3 billion in 2011/12 -a per capita increase from US$129.7 to US$363.7. Aid to Kenya also increased from US$552.6 million in 2002 to US$1.8 billion in 2009.

The education sector had the highest expenditure. Its expenditure as a proportion of total expenditure averaging 18.8% between 2002/03 and 2011/12 compared to 4.8% for health and 2.5% for agriculture spending.

The Teachers Service Commission had the highest education expenditure (average US$937.9 million-63%). A large proportion of health spending went towards health care provision (average US$357.2 million-88%). For the agriculture sector, significant spending went to research and extension (average US$93.7 million).

Education spending in Kenya was higher than that of Uganda and South Sudan between 2008/09 and 2011/12. This could be a justification for Kenya having some of the best education indicators in the region- the highest adult literacy rate of 87%, the highest secondary gross enrolment ratio of 59.5% and the lowest primary school pupil to teacher ratio of 47. For health expenditure, Uganda had a higher spending than Kenya and South Sudan.  It also had the highest agriculture spending.

Health received the highest proportion of aid, with the United States (US) being its largest donor between 2006 and 2010 giving US$1.3 billion representing 73% of the total health aid. Most of health aid during this period funded STD control and HIV/AIDS (US$1.5 billion-65%).

Between 2006 and 2010 education was not donors’ top priority, coming fourth after water and sanitation, government and civil service and health. The United Kingdom (UK) was Kenya’s top education donor (US$87.5 million-25% of education aid) with basic education receiving the largest allocation (US$163.3 million-37%).

Agriculture was the most underfunded sector when compared to education and health. Sweden was the largest donor to agriculture giving a total of US$55.2 million (21%) between 2006 and 2010. Agriculture development received 24% (US$114.5 million) during this period.

Summary & Recommendations

The GoK and donors have different expenditure priorities. Kenya prioritises education; the same is the case for Uganda and South Sudan. More aid funding went to health, followed by education and then agriculture. This could mean that donor and government priorities complement each other, but it could also mean that there are limited consultations between these two actors. Understanding what drives prioritisation and decision making processes between donors and the government is necessary.

Agriculture provides a source of livelihood to 71.1% of Kenyans, but it remains to be the least prioritised – by both donors and the government. As is stipulated in the country’s Vision 2030, there is a need to boost funding to this sector for it to become more mechanised and commercial and improve the livelihoods of Kenyans to support poverty eradication processes.

The Maputo Declaration, which stated 10% of budget allocations should go to the agricultural sector, has not been attained neither has the Abuja Declaration of allocating 15% of budget to the health sector.  Stronger accountability mechanisms need to be in place which binds governments to the declarations they make.

Data used in the study was drawn from the World Bank BOOST, the Ministry of Finance, the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) and African Development Indicators. You can download the resource data used by Development Initiatives here.

The report is one of a series of reports on East African Countries that DI will be publishing. If you would like to find out more about this work please contact Karen Rono at karen.rono@devinit.org