You sometimes wonder if the average person is benefiting when the economy is doing well? Aren’t the poor left behind, even in the most rapidly growing economies? Concerns around rising inequality exist in many countries, rich and poor, East and West. Commenting on the recent post on Folorunsho Alakija’s exceeding Oprah, most people reckoned that her wealth does not translate into improved living experiences of most Nigerians – majority of which are below the poverty line. The mismatch between high levels of economic growth with persistent levels of poverty remains puzzling for many.

Take Kenya for example. Over the last 10 years, the economy grew at an average of about 4 percent. With population growth of 2.7 percent, every Kenyan would have benefited by a modest 1.3 percent per year. But that assumes the growth was distributed evenly. In Tanzania, average growth in the past decade was around 6 percent, yet poverty remains endemic especially for those living in rural areas.

Even though many governments around the world want to avoid rising inequality — at least this is what many say — they often fail to achieve it. The already well off tend to benefit more during periods of economic growth than those in less advantaged positions. The poor typically also benefit, but their income rises more slowly. It is important thing to know that this is a challenge for countries all over the world.

As African nations have been developing, still the majority continue struggle to access the most basic needs such as food, health, and education. The World Bank (http://www.worldbank.org/) may have found the answer to this puzzle. The World Bank argues that well-designed safety nets can be part of the solution. Over the last decade, many countries have successfully implemented programs that have helped to lift the poor from poverty. In Africa, Asia and Latin America, these programs are demonstrating that they can help keep children in school, get poor households access to health services, and even help build productive assets. They further explain that there are a large number of success stories and many of them are coming from emerging economies like Brazil, Mexico and Indonesia. For example, the Brazilian “Family Grant” (Bolsa Familia in Portuguese) is the largest conditional cash transfer program in the world. It played an important role in reducing extreme poverty and inequality in this notoriously unequal country.

Over the last decade, when Brazil grew strongly, the poor actually benefited more than the rich because some of the gains have been partly redistributed to help the poor.  This single programme was credited with one-fifth of the decline in national income inequality! Closer to home, Ethiopia has been successful in reforming its food aid system and largely replaced it with a predictable long-term national safety net that covers 7.8 million people. The program is addressing the country’s chronic food insecurity and helping with improved drought response.

Countries such as Kenya are in a good position to learn from these experiences and create an even stronger system. Mobile money and other innovations can make it easier to transfer funds and reduce corruption. And Kenya is starting to take protection of the poor more seriously, as witnessed by the recent approval of a new social protection policy by the Government. But isn’t

Kenya already doing a lot with projects ranging from support for orphans, elderly, school feeding programs and an often-massive emergency response to droughts. Kenya’s safety net projects are too small and fragmented. Existing projects are limited in coverage and their systems and structures are not yet sufficiently robust to enable a rapid expansion to new beneficiaries. They are also dominated by expensive food-aid responses to drought — about 86 percent of safety net spending is oriented to emergency relief.

Kenya requires long-term interventions to address poverty, inequality and vulnerability. And this is where the government’s new policy can make a difference. It proposes to establish a more comprehensive approach to social protection by streamlining many small interventions and using modern payment and management information systems to make them more cost-effective and robust.

This is not about charity. It is about giving every Kenyan a fair chance to live a dignified life, and to know that there is a helping hand when a crisis hits. If the Government can get the safety net system right, it will be the basis for a more equitable, prosperous and stable Kenya in the future.

Most of this information is from The World Bank.

Picture by: http://www.soschildrensvillages.org.uk/images/migrated-images/KenyaNairobi2small.jpg