Poverty, Growth, and Income Distribution in Kenya

AGRODEP Launches Working Paper Series
July 1, 2012

AGRODEP has published the first paper in its new Working Paper seriesPoverty, Growth, and Income Distribution in Kenya: A SAM Perspective, by Wachira Rhoda Gakuru and Naomi Muthoni Mathenge, examines the relationship between demand-driven shocks and income generation, income distribution, and economic growth in the context of Kenya.

Using the 2003 Kenya SAM to develop a multiplier simulation model, the paper finds that the trade, hospitality (hotels and restaurants), manufacturing, and agricultural sectors all play a role in Kenya’s economic growth. However, due to widespread inequality in terms of ownership of the factors of production, stimulation of the manufacturing and agricultural sectors can actually benefit rich urban households more than poor households. Thus, to effectively reduce poverty countrywide, policymakers must focus on reducing inequality as well to ensure poor populations have equal access to factors of production such as land and investment capital.

AGRODEP is an initiative led by the International Food Policy Research Institute (IFPRI) in cooperation with the Association for Strengthening Agricultural Research in East and Central Africa (ASARECA), the West African Council on Agricultural Research and Development (CORAF/WECARD), and the Food, Agriculture, and Natural Resources Policy Network (FANRPAN). Its goal is to position African experts to take a leading role in the study of strategic questions facing African countries as a group, and in the broader agricultural growth and policy debate which has been traditionally dominated by external actors and concerns.