A recent survey by Sauti za Wananchi has revealed that half of Kenyans are deeply concerned about the rising cost of living, identifying it as the most pressing issue currently facing the nation. The survey, which highlights the economic challenges that millions of Kenyans are grappling with, indicates that inflation and the overall economic situation are top priorities for 50% of the population.

The Sauti za Wananchi survey, conducted across various regions of Kenya, gathered data from a diverse cross-section of the population, providing a comprehensive snapshot of the nation’s sentiments. The findings underscore the urgency for the government to address these economic concerns, with many Kenyans expressing frustration over the increasing cost of basic commodities, transportation, and housing.

The Economic Landscape

The survey results come at a time when Kenya is experiencing significant economic challenges. Inflation rates have been steadily climbing, with the Kenya National Bureau of Statistics (KNBS) reporting an inflation rate of 7.2% as of July 2024. This rise in inflation has been driven by several factors, including increased fuel prices, higher food costs due to prolonged drought in various parts of the country, and the depreciating value of the Kenyan shilling against major global currencies.

The Central Bank of Kenya (CBK) has implemented various monetary policies to curb inflation, including raising interest rates to 10.5%. However, these measures have yet to yield significant relief for the average Kenyan, who continues to feel the pinch of rising prices. The Sauti za Wananchi survey’s findings reflect this reality, with many respondents citing the high cost of living as their primary concern.

Casual Work: The Main Source of Income

According to the survey, casual work remains the most common source of income for 37% of Kenyan households. This statistic highlights the precarious nature of employment in the country, where many citizens rely on informal and unstable jobs to make ends meet. The lack of formal employment opportunities has exacerbated the economic strain on many families, making it difficult for them to cope with rising costs.

The survey also revealed that agriculture, self-employment, and business ventures account for a significant portion of household incomes. Agriculture, which has traditionally been a backbone of Kenya’s economy, contributes to 25% of household incomes, while self-employment and small businesses account for 19%. These figures underscore the importance of supporting small-scale farmers and entrepreneurs, who play a crucial role in the country’s economic fabric.

However, the challenges facing these sectors are significant. Smallholder farmers, who make up the majority of the agricultural workforce, have been hit hard by erratic weather patterns, high input costs, and limited access to credit. Similarly, small business owners have struggled with high operational costs, low demand, and insufficient capital, as highlighted by the survey.

Regional Comparisons: Kenya, Tanzania, and Uganda

The survey also compared the economic conditions in Kenya with those in neighboring Tanzania and Uganda. Interestingly, the findings reveal that Kenya leads in the proportion of households where formal employment is the main source of income, at 17%. This contrasts with Tanzania, where only 10% of households rely on formal employment, and Uganda, where the figure is a mere 5%.

Despite this, Kenyan citizens are more pessimistic about the direction their country is headed compared to their Tanzanian and Ugandan counterparts. According to the survey, 52% of Kenyans believe the country is on the wrong track, while only 42% think it is on the right path. This level of dissatisfaction is higher than in Tanzania, where only 25% of respondents expressed concern about their country’s direction, and Uganda, where 48% of respondents felt their country was headed in the wrong direction.

When it comes to economic prospects, Kenyans are also less optimistic. In 2022, only 7% of Kenyans believed that the country was in good economic shape, while a majority, 63%, thought the situation would improve over the next 12 months. However, the current survey results indicate that this optimism has waned, with more Kenyans expressing concerns about their economic future.

Political and Business Environment

The survey also delved into perceptions of the political and business environment in Kenya, Tanzania, and Uganda. Tanzanians are more likely to view their country as having a stable political environment conducive to business, with 73% of respondents expressing this sentiment. In contrast, only 45% of Kenyans agreed that their country has a stable political environment, highlighting the political uncertainties that have plagued Kenya in recent years.

Tanzania also outperformed Kenya in terms of creating exciting business opportunities, with 72% of Tanzanian respondents indicating satisfaction with their country’s business environment. In comparison, only 34% of Kenyans felt the same way, underscoring the challenges faced by businesses in Kenya, including high operational costs, regulatory hurdles, and competition from both local and international markets.

Interestingly, Tanzanians are more likely to own or run a business, with 41% of respondents indicating that they currently operate a business of some kind. This is significantly higher than in Kenya, where only 24% of respondents reported owning a business, and Uganda, where the figure stands at 21%. These findings suggest that entrepreneurship is more prevalent in Tanzania, where citizens may perceive greater opportunities for business growth and success.

Addressing the Cost of Living Crisis

The Sauti za Wananchi survey provides a clear mandate for the Kenyan government: addressing the cost of living crisis must be a top priority. With inflation eating into household incomes and many Kenyans struggling to afford basic necessities, urgent action is needed to stabilize prices and provide relief to those most affected.

One of the key areas that the government must focus on is improving agricultural productivity. By supporting smallholder farmers with access to credit, affordable inputs, and modern farming techniques, the government can help boost food production and reduce the cost of food. Additionally, investments in infrastructure, such as roads and storage facilities, can help reduce post-harvest losses and ensure that food reaches markets efficiently.

Another critical area is job creation. With casual work being the main source of income for many Kenyans, there is a need to create more formal employment opportunities. This can be achieved through targeted investments in key sectors such as manufacturing, technology, and tourism, which have the potential to create jobs and drive economic growth.

The government must also address the challenges facing small businesses, which are vital to the economy. By providing access to affordable credit, reducing the cost of doing business, and simplifying regulatory processes, the government can create an enabling environment for businesses to thrive.

The Role of International Partners

International partners, such as the World Bank, International Monetary Fund (IMF), and various development agencies, also have a role to play in addressing Kenya’s economic challenges. By providing financial support, technical assistance, and policy advice, these organizations can help the Kenyan government implement effective economic reforms and build a more resilient economy.

For instance, the World Bank has been involved in various projects aimed at improving Kenya’s agricultural sector, including initiatives to enhance food security, increase agricultural productivity, and promote climate-smart agriculture. These efforts are crucial in helping Kenya achieve sustainable economic growth and improve the livelihoods of its citizens.

Similarly, the IMF has provided financial assistance to Kenya to help stabilize the economy and address the impact of external shocks, such as the COVID-19 pandemic and rising global commodity prices. The IMF’s support has been instrumental in helping Kenya maintain macroeconomic stability and implement necessary fiscal and monetary reforms.

Conclusion

The Sauti za Wananchi survey highlights the deep concerns that many Kenyans have about the rising cost of living and the broader economic challenges facing the country. With half of the population identifying inflation as their top concern, it is clear that urgent action is needed to address the cost of living crisis and ensure that all Kenyans can afford basic necessities.

The survey’s findings also underscore the importance of creating more formal employment opportunities, supporting small businesses, and improving the agricultural sector. By taking bold and decisive action in these areas, the Kenyan government can help alleviate the economic strain on its citizens and build a more prosperous and inclusive economy.

As Kenya navigates these challenges, the support of international partners will be crucial in helping the country achieve its economic goals. By working together, the government, private sector, and international community can help create a brighter future for all Kenyans.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

14th August, 2024