Kenya launches universal pensions

Beginning this month – January 2018 – every resident of Kenya over the age of 70 years is entitled to a pension funded solely by general government revenue. The pension is modest, and the age of entitlement is high, but it is an excellent beginning. Previously, only 240,000 of the 390,000 Kenyan citizens over 70 years of age received means-tested, targeted pension benefits. Targeting will continue for social pensions given to persons between the ages of 65 and 69 years.

This benefit will be provided through a monthly cash transfer payment to older individuals as an entitlement, as part of the efforts of the Government of Kenya to realise the right to social security for all citizens that is set out in the National Constitution. The government of Zanzibar, a semi-autonomous part of Tanzania, introduced a similar scheme last year for its citizens and it has been a tremendous success. Other countries in Sub-Saharan Africa have also invested in universal pension schemes including Namibia, Mauritius, Lesotho and Botswana. A tax-financed pension on a national scale in Kenya is affordable. It would cost the equivalent of 0.27 percent of GDP if paid at a value of KES 2,000 (US$20) per month (which would make it one of the lowest cost universal pensions in the world). Given that approximately 35% of those aged 70 years and over already receive some form of pension, the universal pension would require additional funding each year of only KES 8.5 billion (contrary to the KES 18 billion which has been reported by some of the media).

Krystle Kabare, “Pensheni Kwa Wote! Building the Social Protection Floor for Older Persons in Kenya“, Development Pathways blog, 24 April 2017.

 

Ms Krystle Kabare is a Social Protection Specialist with Development Pathways in Nairobi, Kenya.

See also Olive Burrows, “Universal social welfare for those over 70 meant to foster inclusivity“, Capital News, 31 March 2017.

 

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