Kenya has even become a major trading hub in the region, despite up-and-down growth rates since its independence in 1963. The country boasts a young and vibrant population, with 40% underage and a big share of it below 15. This would be a tremendous opportunity for consumption if only the average income hadn't been plummeting in the past few years threatening more and more families of destitution.
As of 2008 unemployment was running wild - at a good 40% - thereby also marginalizing as much as 40% of the population. Moreover, in 2004 Kenya's income poverty rate was up to 57% of the population. If you're wondering what is the poverty line in Kenya, it is set at $1.46 per day in urban areas and $0.68 in rural ones.
Since liberalization measures and anti-corruption policies have been implemented by the current government, Kenya has won back the international aid it had lost under the precedent regime in the 1990s. A better macroeconomic management (monetary and fiscal policies providing secure environment for investment) and strong political will have helped further develop the infrastructure and the construction sector. On top of that, tourism came back on track with the (slow) end of the economic crisis. All this has contributed to reduce poverty in Kenya.
In that sense political cohesion is vital to the smooth and rapid development of the country. The new constitution voted in 2010 has helped build this confidence, especially after the post-election crisis in 2007 marked by civil unrest due to reported cases of electoral manipulation.
But economic growth is still too slow to improve the lives of the population. Although the government proudly claims a GDP growth around 4% for 2010, it should anyway be above 5% to sustain consumption and boost the economy. This happened only once between 2006 and 2008 with a growth around 6%, after what the crisis kicked in and slashed that number down to 2% GDP growth.
By nature, trade is a form of partnership. As such, you would expect people and nations to engage in trade on equal terms. But as you probably know, this is hardly the norm worldwide. Developed countries - the very same that push for liberalization in poor countries via financial institutions - have been rather unashamedly protecting their own agricultural sectors (among others).
This is precisely the sector in which countries such as Kenya are likely to be the most competitive. In addition to that, many developed countries (namely US and the European Union) also apply significantly higher tariffs on imports from developing countries than what would be applied on goods from another developed country.
Well simply because their goods are too cheap, their labor is too inexpensive, they might very well win the market competition! Of course no harm intended to Western farmers here, but if everyone has subsidies, why wouldn't Kenyans too?
Too much faith is placed in market forces without considering the supporting conditions (government tax cuts, tax breaks, subsidies, etc) necessary to develop a modern agriculture. A consequence of this is that many primary producers have seen their income fall sharply. From worldwide slump to the lack of infrastructure (in transports, roads and markets), and incredibly low income level, reasons are plenty for the inability to address the problem of poverty in Kenya.
As the country failed to sustain its economic growth over the past decades, it also failed to complete its demographic transition (from high birth and mortality rates to low ones). Kenya's population then expanded sixfold, thus turning the resource-rich country into a resource-poor one.
With the population's pressure on the economy and its resources, the only solution is obviously a sustainable intensification of the agricultural production. Improved market opportunities (better distribution system and infrastructure for exchanges) and agricultural techniques are needed just as much as a diversification of activities in rural areas so that producers can compete with imported goods and meet local demand.
Aside from periodic but short food shortages, poverty in Kenya stems mostly from other, more severe problems: insufficient access to water, HIV/AIDS, poor education, child labor...
Kenya was long a rare success in Sub-Saharan Africa in terms of education, with the best children enrollment rates in primary school (95% in 1988). The impact of colonization and the domination of Europeans shaped this constructive vision of compulsory education as a means to end poverty in Kenya and push the country toward economic development.
The problem is that with the economic degradation of the country, schools stopped being a means of social ascension and therefore enrollment decreased dangerously. With schools becoming almost useless to improve one's life and one's chances of getting a (better) job, attendance began to fall sharply. In 2000 only 79% of children were still attending primary school and several waves of violences and strikes hit the country, asking for a major reform of the system.
It is also important to note that only 50% of boys and 35% of girls attend school after age of 16. And only 3% of those continue to tertiary education. The education of women is an issue that has been only recently acknowledged, with potential benefits for improving in agricultural production, household food security, child nutrition and health. Poverty and patriarchy have traditionally served to limit women’s access to education. And these influences are still obvious in households, public institutions, and official policies.
Finally, as the government sought to privatize and commodify education, the poor have been increasingly kept out of the system as they couldn't afford it. If the new Free Primary Education policy is to be effective, the government will have but to sustain a high economic growth so as to be able to fund universal education for all Kenyans. This will remain quite a challenge in the current economic environment.
Child labor was introduced in Kenya during the colonial era. Too many issues currently fuel child labor to solve it overnight: poverty in rural areas and city slums; HIV/AIDS, which orphaned over 1 million children; conflicts; domestic violence; and traditional practices such as sending children to herd cattle or to be married at an early age. Not to mention the kids who are forced by adults to either break into houses or smuggle illegal goods. Or those who are simply forced into prostitution.
It's only recently that people have become more aware of the importance of sending children to school as a long term investment. This is true for the media, policy makers, parents and ... children themselves!
For the past 20 years successive governments have been implementing national policies and economic measures to tackle child labor via reducing poverty in Kenya and especially adult unemployment. The current government has also created a system of grants and development funds in order to support children from poor families. This will nonetheless depend on how well the country does economically in the years to come if it is to sustain such public expenses.
Despite Kenya being one of the countries that were hit hardest by the disease, it went through a period of widespread public and political denial. Until the day the former president finally declared AIDS a national disaster. By bringing consensus and concerted action among religious and political leaders, the current president Kibaki has been able to show some progress in his "Total War" on AIDS.
Efforts are concentrated on both prevention and treatment of the pandemic with a wide range of measures: counseling and testing centers, safe blood and safe injections, condom promotion, increased access to anti-retroviral treatment, and social programs aiming at integrating and keeping HIV positive workers in the market.
Even if these efforts have indeed shown good results since 2002, the disease remains up to this time a major factor contributing to poverty in Kenya. In 2007 the country was still the 6th worst hit in sub-Saharan Africa with over 1.4m people between 15-64 living with HIV, representing some 7.5% of the adult population.
By turning the country's agriculture into a more export-oriented sector, liberalization has put Kenya's food security in danger and made its population more vulnerable in many ways. For example, the lack of social safety net and redistribution mechanisms adds vulnerability in times of global market instability. Exports can go dramatically down for a variety of reasons (e.g. crisis) and jobs are easily lost nationwide.
Poverty in Kenya brings completely absurd situations where average urban wages for full-time jobs are simply not enough to make ends meet. As you can guess, people do survive by relying on their wits, creating a makeshift economy and coping strategies.
Besides, people from the cities have often times maintained close ties with their traditional hometowns in rural areas which then serve as their private safety net, where they can fall back in times of economic hardships. With its fast growing population, the government cannot overlook the importance of developing the economy as a whole, with increased interaction between the different sectors (agriculture, transports, telecommunications).
It has to continue developing a diverse agricultural sector as well as its industry and urban areas in order to accommodate the newcomers and create enough jobs. Poverty in Kenya thrives on this lack of diversification of the economy, which in turn hinders any social improvement.