i. Low per capita income- Usually, developing economies have a low per-capita income. The per capita income in Kenya in 2014 was $1,560. In the same year, the per-capita Gross National Income (GNI) of USA was 55 times that of Kenya and that of China was 40 times higher than Kenya. Further, apart from the low per-capita income, India also has
a problem of unequal distribution of income. This makes the problem of poverty a critical one and a big obstacle in the economic progress of the country. Therefore, low per-capita income is one of the primary economic issues in Kenya
ii. Huge dependence of population on agriculture Another aspect that reflects the backwardness of
the Kenyan economy is the distribution of occupations in the country. The Kenyan agriculture sector has
managed to live up to the demands of the fast-increasing population of the country.
iii. Heavy population pressure -Another factor which contributes to the economic issues in Kenya is
population. Today, Kenya’s population stands at about 50 million. We have a high-level of birth rates
and a falling level of death rates. In order to maintain a growing population, the administration needs to take care of the basic requirements of food, clothing, shelter, medicine, schooling, etc. Hence, there is an increased economic burden on the country.
iv. The existence of chronic unemployment and under-employment-The huge unemployed working
population is another aspect which contributes to the economic issues in Kenya. There is an abundance
of labor in our country which makes it difficult to provide gainful employment to the entire population.
v. Slow improvement in Rate of Capital Formation-Kenya always had a deficiency of capital. However,
in recent years, Kenya has experienced a slow but steady improvement in capital formation. We
experienced a population growth of 1.6 percent during 2000-05 and needed to invest around 6.4 percent
to offset the additional burden due to the increased population.
vi. Inequality in wealth distribution- According to Oxfam’s ‘An economy for the 99 percent’ report,
2017, the gap between the rich and the poor in the world is huge. In the world, eight men own the same
wealth as the 3.6 billion people who form the poorest half of humanity. Unequal distribution of wealth is certainly one of the major economic issues in Kenya.
vii. Poor Quality of Human Capital- In the broader sense of the term, capital formation includes the use of any resource that enhances the capacity of production. Therefore, the knowledge and training of the
population is a form of capital. Hence, the expenditure on education, skill-training, research, and
improvement in health are a part of human capital.
viii. Low level of technology -New technologies are being developed every day. However, they are
expensive and require people with a considerable amount of skill to apply them in production. Any new
technology requires capital and trained and skilled personnel. Therefore, the deficiency of human capital and the absence of skilled labor are major hurdles in spreading technology in the economy.
ix. Lack of access to basic amenities In 2019, according to the Census of Kenya, nearly 7 percent of
Kenya’s population lives in rural and slum areas. Also, only 26.6 percent of households in Kenya have
access to drinking water within their premises. Also, only 16.9 percent of households have toilet
facilities within the household premises. This leads to the low efficiency of Kenyan workers. Also,
dedicated and skilled healthcare personnel are required for the efficient and effective delivery of health services. However, ensuring that such professionals are available in a country like Kenya is a huge challenge.
x. Demographic characteristics According to the 2019 Census, Kenya had a population density proves
that the dependency burden of our population is very high.
xi. Under-utilisation of natural resources Kenya is rich in natural resources like land, water, minerals, and power resources. However, due to problems like inaccessible regions, primitive technologies, and a
shortage of capital, these resources are largely under-utilized. This contributes to the economic issues in Kenya.
xii. Lack of infrastructure The lack of infrastructural facilities is a serious problem affecting the Kenya economy. These include transportation, communication, electricity generation, and distribution, banking and credit facilities, health and educational institutions, etc. Therefore, the potential of different regions of the country remains under-utilized.
raphael answered the question on August 4, 2021 at 06:25