Kenya has the lowest economic inequality among its East Africa Community despite a surge in energy and food prices, a new survey report by the African Development Bank shows.
| ShutterstockBusiness
Premium
Kenya’s wealth gap the lowest among EAC nations, AfDB report shows
Kenya has the lowest economic inequality among its East Africa Community (EAC) despite a surge in energy and food prices, a new survey report by the African Development Bank (AfDB) shows.
Kenya’s Gini coefficient—which gauges inequality- stood at 38.9 which is the lowest in the bloc, trailing other nations including; South Sudan (44.1), Rwanda (43.7), Uganda (42.7), Tanzania (40.5) and Burundi (40.1).
“Rising food and energy prices have worsened poverty and inequality in the region East African economies have relatively high Gini coefficients that mirror the high-income inequality and poverty in the continent,” AfDB said in the latest economic outlook for East Africa.
East African economies have relatively high Gini coefficients that mirror the high-income inequality and poverty in the continent.
“Most of the East African countries are ranked between 28th and 52nd out of some 189 countries, indicating that the income is relatively concentrated in the hands of a few while the majority are struggling to meet their basic needs, such as food, energy, health care, housing, and education” AfDB added.
The World Bank cites Slovenia with a Gini of 24.6 as one of the lowest in the world, whereas South Africa, with its Gini of 63, is considered the highest.
Closer home Comoros, with a Gini coefficient of 45.3 was ranked as the most unequal country in the wider Eastern Africa region in 2023, while Seychelles, with a Gini coefficient of 32.1 was rated as the least unequal country in the region.
Kenya’s economic inequality however beats several other nations in the Eastern Africa area including Somalia (36.8), Ethiopia (35), and Sudan (34.2).
“Rising energy and food prices and prolonged drought in the region, compounded by the adverse aftershocks induced by the Covid -19 pandemic, are major headwinds to reducing extreme poverty in the region,” AfDB said.
“In 2023, there are 105.70 million people in extreme poverty in East Africa (representing 18.5 percent of the global population living in extreme poverty), a 0.43 percent decline from 105.5 million in 2022. Tanzania had 25.9 million people living in extreme poverty in 2022, the highest in the region. Ethiopia registered 11.2percent decline in the number of people living in extreme poverty from 2022 to 2023, the highest in the region” it added.
The AfDB report said the unemployment rate in East Africa fell by 0.8 percent in 2022-- a smaller decline margin compared to 2021 when the employment rate changed by -1.4 percent.
“This result is attributed to sustained drought in the Horn of Africa and global supply chain disruptions due to Russia’s invasion of Ukraine, which had a severe negative impact on forward and backward linkages in the agricultural and energy sectors,” the bank said.
Russia and Ukraine dominate fertiliser and wheat imports in the East African region. East Africa imports an estimated 20 percent of total wheat consumption from Russia and Ukraine and 7 percent of fertiliser from Russia.
“The high imports of these commodities from the two countries show the exposure of the East African region to shocks. Supply chain disruptions increased the price and freight charges for fertiliser, wheat, and petroleum products, leading to skyrocketing food and energy prices and exacerbating unemployment in the region” AfDB said.
“Only Ethiopia, Tanzania, and Somalia registered an increase in the unemployment rate in 2022. Burundi (-9.9 percent) recorded the most significant decline in the unemployment rate due to expansion in subsistence farming, while Ethiopia (2.2percent) recorded the most significant upswing in the unemployment rate in 2022 due to increased fragility from the Tigray conflict” it added.
