Smart Companies Must Fight Poverty

By February 12, 2020Evolve Insights

As it appeared in the Daily Nation on February 11th 2020
Dr. Lucy Kiruthu

Poverty makes many sleepless. Both the experience and the thoughts of poverty are devastating. Two decades ago at a United Nations Millennium Summit, leaders from 189 countries signed the historic declaration with Eight Millennium Development Goals (MDGs). The goals were expected to lead to significant improvements in the lives of the world’s poorest. One of the eight goals was the eradication of extreme poverty cum hunger. Upon the expiry of the MDGs in 2015, the 2030 agenda for sustainable development was signed at the UN Sustainable Development Summit. The 2030 agenda includes 17 sustainable development goals (SDGs). These SDGs maintained the push for poverty eradication. Goal number one of the SDGs is to end extreme poverty by 2030. Only time will tell if this will be achieved.

A significant decline in global poverty levels has been witnessed over the years. However, the 2019 United Nations report on the performance of the SDGs shows that 8.6% of the world still lives in extreme poverty. Worse still, more than half of those living in extreme poverty live in Sub-Sahara Africa. Africa remains the only continent where the number of those living in extreme poverty is increasing. In Kenya, Kenya National Bureau of Statistics (KNBS) reported that in 2018, 36.1 % of the Kenyans lived below the poverty line. These were estimated at 16.4 million Kenyans with a monthly household expenditure below Ksh 1,954 in rural areas and Ksh 2,551 in urban areas. Many more Kenyans live below the World Bank’s cut-off for extreme poverty that is at US$1.90 per day. To change this narrative, businesses have a major role to play. The responsibility of businesses goes beyond corporate social responsibility to support the poor. There is need for outright business practices that improve the economic wellbeing of the various stakeholders.

Poverty simply means that one lacks the financial resources needed to meet basic human needs. For example, a breadwinner with a family of four earning Ksh 10,000 per month is below the poverty line. In Kenya, many factors have contributed to the millions lacking adequate financial resources. A multiagency approach is therefore paramount in attacking the causes of poverty. However, smart companies must not wait for others in the fight against poverty. Poor terms of employment have resulted to very low-income levels for many. Therefore, businesses have the responsibility to provide quality employment terms able to support a sustainable livelihood and lead their employees out of poverty. Further, businesses have the opportunity to source their raw material and labour locally in an effort to support the locals. Use of the best management practices is also a key avenue to drive better business performance, job security and stakeholder relations. In addition, business associations have the responsibility to lobby both the county and national governments for a more conducive business environment that ensures business survival.

Whether or not we will eliminate extreme poverty in Kenya by 2030 is debatable. The role of business is however crystal clear. The next 10 years provides us with an excellent opportunity to make this dream a reality. As a business owner, leader or manager, what will you do differently to get a few more Kenyans out of poverty?

Dr. Lucy Kiruthu is a Management Consultant and Trainer. Connect via twitter @KiruthuLucy

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