NAIROBI, Kenya — Up to 2.4 million Kenyans could fall below the poverty line in 2026, according to a new report by the World Bank, highlighting rising fuel costs, declining remittances, and weak job creation as key risks to household incomes.
The findings are contained in the bank’s latest Africa Economic Update, which estimates that Kenya’s poverty rate, measured at the US$3 international poverty line, could increase by between two and 4.5 percentage points this year.
The variation depends largely on how higher fuel prices are transmitted across the economy.
“In Kenya, microsimulation estimates suggest that the poverty rate… could be 2 to 4.5 percentage points higher in 2026. This would translate into an additional 1 million to 2.4 million Kenyans falling below the poverty line,” the report states.
The lender said urban households are likely to bear the brunt of the shock due to rising transport costs and higher food prices, which typically pass more quickly into city markets.
The report attributes the projected deterioration to a fragile economic recovery weighed down by mounting public debt, declining external financing, particularly development assistance, and elevated global risks.
It warns that geopolitical tensions in the Middle East could worsen the situation through higher energy and food prices and reduced remittance inflows.
Remittances are a critical income source for many households.
The report notes that about 500,000 Kenyans work in Gulf countries, and early 2026 data already shows one of the sharpest monthly declines in inflows, with up to US$40 million potentially at risk. Reduced remittances could weaken household purchasing power, particularly for families dependent on overseas earnings.
The World Bank said many households are highly vulnerable because they live just above the poverty line. Any rise in prices—especially food and transport—could push them into poverty. Across Africa, the share of people living between the US$3 poverty line and the US$8.30 vulnerability threshold rose from 29 percent in 2000 to 43 percent in 2022, underscoring the growing fragility of incomes.
Beyond remittances, Gulf countries also serve as key export markets for Kenya’s horticulture and livestock products. Disruptions in those markets could further erode incomes in agriculture and related value chains.
The report also points to limited job creation and persistently high informality as structural risks. Many workers lack stable wages or social protection, leaving them exposed to inflation shocks. Rising food and transport costs are expected to be the main channels through which the pressures will be felt.
Despite the projected increase in the number of poor people, the poverty rate is expected to decline only slightly in the medium term, falling to 47.3 percent in 2026 and 45.4 percent by 2028. However, rapid population growth means the absolute number of people living in poverty could still increase.
Separate findings from a joint study by the Kenya Institute for Public Policy Research and Analysis, Kenya National Bureau of Statistics, the World Bank, United Nations Children’s Fund, and researchers from the University of Nairobi show that poverty reduction in Kenya has slowed and become less responsive to economic growth.
The study found that poverty remains concentrated in rural areas, particularly in Arid and Semi-Arid Lands, where households are more vulnerable to climate shocks and limited infrastructure. It concluded that sustained poverty reduction will depend on improving agricultural productivity and containing inflation, noting that growth driven by industry and services has not translated strongly into poverty reduction.
The World Bank warned that without stronger job creation, stable prices, and improved resilience to shocks, recent gains in poverty reduction could be reversed, pushing millions more Kenyans into economic hardship.
