In a stark reflection of the economic struggle facing the nation, a staggering nine in ten Kenyan consumers are earning the same or less than they did before the COVID-19 pandemic, as the cost of living skyrockets by at least 30%.
The situation is dire, leaving millions grappling with financial stress and a deepening lack of confidence in the economy.
According to the Old Mutual Financial Services Monitor 2024, only a paltry 16% of Kenyans feel optimistic about the economy, with the bleak outlook particularly pronounced among the younger demographic—results show that just 7% of those aged 20 to 29 express any confidence.
This widespread disillusionment is compounded by the burden of dependents, with three out of four working Kenyans raising children, many under the age of 12. Adding to the pressure, over half of employed individuals also support adult dependents, primarily their own parents.
In an alarming statistic, 46% of Kenyans identify as part of the ‘sandwich generation,’ desperately trying to balance the financial demands of dependent children and elders.
The reality of their situation is reflected in their savings goals, with education emerging as the primary focus for 40% of the population. As costs continue to climb, education has also emerged as the top cause for unexpected expenses that lead families to take out loans.
The Federation of Kenya Employers (FKE) reveals that the average worker supports a staggering five dependents.
This adds enormous strain as employees navigate reduced earnings, further compounded by increased statutory deductions—necessary to fund initiatives like the newly launched Social Health Insurance Fund and affordable housing schemes.
The latest ‘Consumer Spending Index’ has only amplified these concerns, indicating that 55% of households have experienced stagnant income throughout the year. As prices for essentials such as food, housing, and healthcare continue to soar, the struggle for everyday Kenyans intensifies.
While 26% of respondents reported a rise in their income and 19% noted a decline, those in the wholesale and retail sector faced the harshest income cuts at 26%.
In contrast, the manufacturing and trade sectors reported a flicker of hope, with 30% of respondents witnessing income increases. The education and training sector also fared comparatively well, with 26% of workers indicating wage growth.
Interestingly, individuals who saw their incomes decrease primarily pointed to a lack of business performance—44% blamed poor investments—while tax hikes and job losses each impacted 22% of those surveyed. Only 11% attributed their cuts directly to pay reductions.
On a positive note, those who experienced wage increases often cited engagement in side jobs (28%) as a major factor, alongside salary raises (26%).
