Kabubo Kenya's Economic Growth

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“One-third of the population of the world lived in poverty in 1981, whereas the share was 18 per cent in 2001. The decline is largely due to rapid economic growth in population rich countries like China and India. There are, however, remarkable differences between countries and between regions in the developing world. Some regions and countries, notably in East Asia, are rapidly catching up to industrialized countries. Others, especially in Sub-Saharan Africa, are lagging far behind and the share of poor people in the population has even increased in some countries industrial development.’’ (Chen and Ravallion, 2008) Most scholars define economic growth as the increase in a country’s production capacity which is measured by the gross national…show more content…
Economic growth is seen as the solution to poverty eradication, poor infrastructure and health services, unemployment and inequality. (Kabubo-Mariara et al 2013). Kenya’s overall economic growth has been hindered due to factors like the post election violence (2007-2008) and the worldwide financial crisis which has contributed to high prices of food and fuel. The country is in the recovery process as they try and adopt pro-poor growth policies. Kabubo-Mariara et al (2013) discuss the relationship between pro-poor growth, poverty and inequality in Kenya. They use pro-poor growth indices by the approaches done by Ravallion and Chen (2003), Kakwani and Pernia (2000), and Kakwani, Khandker and Son (2003). These policies are used to compare the changes in average income with the pro poor growth indices and conclude that there was a substantial amount of growth which was pro-poor. Consequently this means that the rich people in Kenya benefited more from the income growth compared to the poor people. A positive growth rate shows that the average incomes increased while a negative growth rate shows that incomes…show more content…
The vast body of research on economic growth and poverty reduction has shown that the most effective way to sustainably reduce poverty is to raise the productivity of and returns to resources that poor people depend on for their livelihood. In almost all African countries, these resources are agricultural land, labor and off-farm rural labor. In fact, African countries with higher agricultural growth also exhibit lower poverty rates. This is not just due to higher incomes in the agricultural sector, but in addition to the fact that higher agricultural incomes also tend to induce even higher incomes outside of the agricultural sector and the rural economy. For African countries, there is evidence that a $1.00 dollar increase in farm income results in an additional increase in rural incomes from $1.5 to $2.5. The importance of agriculture increases even more when one considers the very strong interrelationships between agricultural growth and the broader socioeconomic and human development goals. It is now well understood that poor agricultural growth is highly correlated with the prevalence of hunger and

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