{"id":615,"date":"2014-10-15T12:00:34","date_gmt":"2014-10-15T11:00:34","guid":{"rendered":"https:\/\/blog.iese.edu\/africa\/?p=615"},"modified":"2016-10-28T13:59:28","modified_gmt":"2016-10-28T12:59:28","slug":"kenyas-middle-class-and-economic-growth","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/africa\/2014\/10\/15\/kenyas-middle-class-and-economic-growth\/","title":{"rendered":"Kenya&#8217;s middle class and economic growth"},"content":{"rendered":"<p>A couple of weeks ago the news came out that <a href=\"http:\/\/www.ft.com\/intl\/cms\/s\/0\/5cf5ba70-489a-11e4-9d04-00144feab7de.html\"><strong>Kenya has seen its economy grow 25%<\/strong><\/a> after statistical revision. Officially, Kenya is now a <strong>&#8220;middle-income country.&#8221;<\/strong> A few months ago, a similar type of revision brought <a href=\"https:\/\/blog.iese.edu\/africa\/2014\/04\/16\/from-nigeria-to-kenya\/\">Nigeria&#8217;s economy to the top of African countries<\/a> in terms of the size of the economy, surpassing South Africa for the first time. <strong>A growing middle class population is an important driver of this growth.<\/strong> But <strong>what does that middle class look like?<\/strong> Let&#8217;s look at <strong>Kenya<\/strong>. The recently revised <strong>Kenyan figures<\/strong> indicate that <strong><a href=\"http:\/\/www.ft.com\/intl\/cms\/s\/0\/5cf5ba70-489a-11e4-9d04-00144feab7de.html\">GNI per capita is $1,160<\/a><\/strong>. The World Bank&#8217;s &#8220;middle income&#8221; threshold is $1,036.\u00a0 The latest official (i.e. the World Bank&#8217;s) <a href=\"http:\/\/data.worldbank.org\/country\"><strong>income-distribution indicators<\/strong><\/a> in relation to Kenya date back to 2005; just a couple of figures:<\/p>\n<ul>\n<li>45.9% of the population were at the national poverty line;<\/li>\n<li>the income share held by the top 10% was 38%.<\/li>\n<\/ul>\n<p>This is out-of-date, official information &#8212; with all of the issues that excluding the <a href=\"https:\/\/blog.iese.edu\/africa\/2014\/04\/23\/the-informal-economy\/\">informal economy <\/a>implies. Now, a part of the <strong>reality<\/strong> I have observed: <strong>a taxi driver<\/strong> I became familiar with <strong>makes KES15,000\/month (about US$178 or \u20ac132), and pays KES3,500 (close to 25% of his income) to rent a room<\/strong> where he lives with his wife and two children. They don&#8217;t have a kitchen or a bathroom: these are facilities shared with others in the same building lot. His income is pretty much the average salary of a driver, according to the <a href=\"http:\/\/www.knbs.or.ke\/index.php?option=com_content&amp;view=article&amp;id=250:es&amp;catid=82:news&amp;Itemid=593\">Kenya Economic Survey 2014.<\/a><\/p>\n<figure id=\"attachment_618\" aria-describedby=\"caption-attachment-618\" style=\"width: 225px\" class=\"wp-caption alignright\"><a href=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/10\/2014-07-12-11.15.01.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-618\" src=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/10\/2014-07-12-11.15.01-225x300.jpg\" alt=\"The house of a common household in Kenya\" width=\"225\" height=\"300\" srcset=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/10\/2014-07-12-11.15.01-225x300.jpg 225w, https:\/\/blog.iese.edu\/africa\/files\/2014\/10\/2014-07-12-11.15.01-768x1024.jpg 768w, https:\/\/blog.iese.edu\/africa\/files\/2014\/10\/2014-07-12-11.15.01-624x832.jpg 624w\" sizes=\"auto, (max-width: 225px) 100vw, 225px\" \/><\/a><figcaption id=\"caption-attachment-618\" class=\"wp-caption-text\">The house of a common household in Kenya<\/figcaption><\/figure>\n<p>Is he middle class? \u00a0I don&#8217;t know at which socio-economic group he would belong to officially: his annual income (US$2,136) makes him above the World Bank&#8217;s threshold but this is the only income to a household of four (US$534\/capita). What I know is that <strong>the room he rents is in the building that you see in the picture:<\/strong>\u00a0they are not the poorest of the poor by far,<strong>\u00a0<\/strong>and this is how most Kenyans live (he told me)<strong>.<\/strong>\u00a0I know also that the Fanta and cookies they offered me were well beyond their means \u2013 still, <strong>they didn&#8217;t hesitate to treat the visitor as they did: a clear sign of generosity that made me ashamed.\u00a0<\/strong><\/p>\n<p>Just food for thought\u2026 so \u2013 any thoughts?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A couple of weeks ago the news came out that Kenya has seen its economy grow 25% after statistical revision. Officially, Kenya is now a &#8220;middle-income country.&#8221; A few months ago, a similar type of revision brought Nigeria&#8217;s economy to the top of African countries in terms of the size of the economy, surpassing South [&hellip;]<\/p>\n","protected":false},"author":1654,"featured_media":625,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[99579,993],"tags":[45502,121,70269,79906,951,80748,5461,1147,115],"class_list":["post-615","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-african-economic-and-institutional-context","category-living-conditions","tag-east-africa","tag-economic-growth","tag-income-distribution","tag-informal-economy","tag-kenya","tag-life-style","tag-middle-class","tag-poverty","tag-world-bank","megacategoria-mc-africa"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts\/615","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/users\/1654"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/comments?post=615"}],"version-history":[{"count":11,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts\/615\/revisions"}],"predecessor-version":[{"id":630,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts\/615\/revisions\/630"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/media\/625"}],"wp:attachment":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/media?parent=615"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/categories?post=615"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/tags?post=615"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}