Social Protection Schemes: Alleviating Elderly Poverty in Kenya

Private and public schemes have been introduced to address the concerns surrounding poverty among the elderly in Kenya. President William Ruto has acknowledged that old age poverty is a significant issue in the country.

Kenyan Elderly in the Workplace

Approximately 89.4% of the Kenyan elderly lack a pension scheme, leading to old age poverty and the need to continue working. A survey conducted by the Central Bank of Kenya, FSD Kenya, and the Kenya National Bureau of Statistics states that only 10.6% of Kenyan citizens are enrolled in a pension scheme.

Reports indicate that 80% of Kenyans over 60 years of age are still in active employment, suggesting that a pension scheme could have alleviated the struggles faced by the elderly in the workforce. The elderly are more likely to experience mobility issues and difficulties with daily tasks, which, in turn, can lead to ageism when seeking employment.

Available Schemes for the Kenyan Elderly

The Kenyan social protection system consists of both tax-financed schemes, such as The Inua Jamii Senior Citizens’ Scheme, and contributory schemes, such as the Mbao Pension Plan.

Inua Jamii Senior Citizens’ Scheme is a tax-financed, pension-tested social pension scheme that provides coverage for Kenyan citizens over 70 years old. Recipients of the scheme are entitled to KES 2,000 every two weeks. However, there have been reports of delays, with funds sometimes taking up to three months to arrive.

Implemented in 2018, the Inua Jamii Senior Citizens’ Scheme lacks a solid legal framework, which may make it vulnerable to discontinuation due to the absence of legal stability.

The Mbao Pension Plan focuses on informal sector workers, pooling and investing their savings. It is a private, voluntary retirement savings scheme that was initiated in 2009 by the Kenya National Federation of Jua Kali Associations to tackle elderly poverty.

As of 2018, the program had 100,000 members and US$1,342,000 in funds. The Mbao Pension Plan relies on the daily contributions of its members, with a minimum contribution of KES 20 per day. By contributing KES 20 each weekday, a member can save up to KES 4,800 per year. There is no penalty if a member fails to contribute.

Looking Ahead

President Ruto has stated that recipients of cash transfer programmes will be prioritised over public servants’ salaries starting in June. He reiterated the importance of Kenyans saving more for their pensions. The Kenyan government aims to provide a “high quality of life for all its citizens by the year 2030.”