One in every four Kenyans earned less in December 2024 compared to the amount they took home in January of the same year.
This, coupled with six out of 10 Kenyans who reported that their income was stagnant throughout the year, saw spending during the festive period grow at a lower rate than expected.
A new survey by ICEA Lion Asset Management shows that a tough operating environment saw Kenyans lose up to 33 per cent of their income last year.
The Fourth Quarter 2024 ILAM Consumer Spending Index, which tracks consumer spending as a gauge of the trends in the real economy, shows that static incomes still continue to impact Kenyans purchasing powerr.
“One-quarter of individuals surveyed ended the year with lower incomes compared to the beginning of the year. This represented the highest proportion of flat income levels dominating income trends during the year,” said ICEA LION Asset Management Head of Research Judd Murigi.
“However, we also note that the proportion of individuals reporting lower incomes declined to the lowest levels witnessed during the year.”
Although the majority of individuals reported that their income remained the same, workers in the wholesale and retail sector reported the highest decrease at 33 per cent.
Conversely, people working in real estate/building and construction saw the highest increase, with 22 per cent of respondents reporting an increase in income.
The findings show that 60 per cent of respondents indicated that their income levels ended 2024 at the same level as 2023.
“Compared to the same time last year, 61 percent of respondents reported no change in income, while 24 per cent experienced a decrease and 15 per cent reported an increase,” added Murigi.
Poor business performance, taxes, and loss of jobs were the top reasons that saw income declines in 2024.
From the survey, 42 percent said its business performance impacted their incomes, 30 percent attributed it to tax, while 18 percent lost their jobs.
On the contrary, 29 per cent who changed jobs and 28 per cent who secured side hustles reported an increase.
Despite the flat incomes, 60 per cent of retailers surveyed reported an increase in sales compared to the final quarter in 2023, while approximately 40 per cent had lower sales in the quarter.
The index shows a two per cent increase in consumer spending, driven by slight improvements in individual spending and retail business sales, defying expected seasonal trends.
This was similar to trends witnessed between July and September 2024, as the expected uplift from the festive season did not appear to materialise.
In terms of business sectors, the clothing, retail shopping, and food & beverage sectors witnessed higher sales in the final quarter of 2024 compared to the previous year, while the household fittings and accessories sector saw most businesses report lower sales trends between October and December 2024 compared to the prior year.
On a quarter-on-quarter basis, however, retail stores and food and beverage sector businesses had lower sales trends in the fourth quarter compared to the third quarter, a surprise development in view of the festive season when sales in these sectors are expected to pick up.
The majority of retail businesses
in Nairobi, Mombasa, Eldoret, and
Kisumu reported improved sales, but
Nyeri bucked the trend with most
retailers experiencing lower sales.
