3 Main Things Kenyans Are Cutting Spending On

A report released on Wednesday, December 13 by research firm Trends and Insights Africa (TIFA) has revealed three items Kenyans are spending less on ahead of the festive season.

In the report culminating from a survey in which 3,000 respondents were engaged from across 47 counties, food, transport, and clothing were highlighted as items Kenyans have had to reduce expenditure on due to inflation.

84% cut their spending power on food which was broken down as follows; 88% being those earning an income of less than Ksh5,000 while 85% earned an income between Ksh5,000 to Ksh20,000. 79% are earning above Ksh20,000.

In terms of transport, given that a majority of Kenyans rely on public transport for their daily travels, 15% reduced their spending on that category, with those earning less than Ksh5,000 at 12%, 19% for those earning between Ksh5,000 and Ksh20,000 and 19% earning above Ksh20,000.

Coincidentally, spot checks by Money254.co.ke show a section of Kenyans resorting to using matatus which charge cheaper fares for major routes such as along Thika Road compared to others which guarantee faster transport in exchange for higher fares.

For clothing, 9% had reduced spending on clothing items, with 8% being those earning below Ksh5,000, 10% earning between Ksh5,000 and Ksh20,000, and 10% above Ksh20,000.

For Kenyans earning above Ksh20,000, interestingly, 14% are reducing their expenditure on entertainment, the third highest behind transport and food respectively, against a total of 8% of those reducing their spending power on entertainment.

“Among income-earners (at whatever level), the vast majority mention food as the main purchase-item/category they have had to reduce expenditure on recently due to inflation. This holds true for those in all three income categories, although those somewhat more affluent (earning above Ksh20,000) have had to do this a bit less than those earning least (below Ksh5,000: 79% vs. 88%), while the second most common decrease among the former has been on transport (which also applies to those in the middle income-category: 19% for both),” the report read in part.

Generally, a large majority of Kenyans (87%) report having had to recently reduce expenditure on various items due to the constantly rising cost of living in recent years.

89% of those earn between Ksh5,000 and Ksh20,000 followed by 87% earning less than Ksh5,000 and 86% earning above Ksh20,000.

Items Kenyans Have Had To Reduce On the Least

In terms of items Kenyans have had to reduce on the least, 2% revealed that they are not reducing or even stopping spending on alcoholic drinks due to the rising cost of living. However, 4% of those had an income of above Ksh20,000.

3% of Kenyans are not reducing their spending on electricity, with those earning below Ksh5,000 and between Ksh5,000 and Ksh20,000 composing of 3% each. 4% however earn above Ksh20,000.

In addition, 3% are not reducing their spending on cooking fuel/gas, though 4% earn below Ksh5,000, 3% earn between Ksh5,000 and Ksh20,000 and 5% earn above Ksh20,000.

Ability To Save Something At The End Of Each Month

In terms of saving culture, TIFA outlined that 54% of Kenyans earn above Ksh20,000, thus being the most likely to save from their salaries at the end of every month.

This is however not the case with those earning below Ksh5,000, composed of 34%, with 40% being able to save as they earn between Ksh5,000 and Ksh20,000.

“Fewer than half of those earning any money say that they are able to regularly save anything at the end of each month (42%), though there is a clear correlation between such ability to save an income, with the lowest income earners (less than Ksh5,000/-) considerably less able to do this than those in the highest income category (above Ksh50,000/-: 34% vs. 54%),” the report added.

Main Source Of Household Food

In terms of purchasing food, more Kenyans are still relying on kiosks compared to their family shambas, some of which are in areas across Kenya that provide favourable conditions for crop farming.

59% prefer to source their food from kiosks compared to 36% from their family shambas. Kiosks/shops offer a more convenient option for many Kenyans given that most of them are located close to their residences.

“Whereas a small majority of Kenyans (59%) purchase most of their food at shops and/or kiosks, far more urban dwellers do so as compared with those living in rural areas (83% vs. 46%). Yet among rural-dwellers, only about half rely on their own shambas as their main source of such consumables (49%), which presumably gives them at least some protection from the constant recent increase in the cost-of-living,” stated TIFA.

Comparison Of Current Economic Condition To One Year Ago (Total & By Zone)

The vast majority of all Kenyans (84%) consider their current economic condition to be worse than what it was a year ago.

Geographically, the highest proportion of those considering that they are now worse off economically reside in Lower Eastern, Nairobi, and Nyanza (all 88%), while the lowest proportion of those reportedly suffering this decline in their economic condition are found in Central Rift and South Rift (78% and 71%, respectively). 

Notably, this comes a week after Treasury Cabinet Secretary (CS) Njuguna Ndung’u confessed that the government was facing serious liquidity challenges which put its desire to address the delay in releasing the National Government Constituency Development Fund (NG-CDF) funds to constituencies in jeopardy.

“In one year, Kenya has gone into two extremes; there was severe drought, and now there is El Niño. In both cases, we have reallocated supplementary, recurrent and even development budgets to save lives.

“We are having a liquidity problem and that is why we cannot come to the rescue as fast as we should but we are working to ensure that before Christmas we will have taken some steps towards addressing the CDF issue,” CS Njuguna said while appearing before the National Assembly’s Finance and National Planning Committee.