Seventy per cent of Kenyans report income declines in 2024
As a result, only 3 in 10 Kenyans report that their household income consistently covers all expenses with money left over at the end of the month
A new report by Old Mutual Investment Group reveals that 70 per cent of Kenyans saw a decline in their incomes in 2024, with nearly half (47 per cent) of the country’s working population reporting significant stress, including physical and mental health impacts.
The second edition of the Old Mutual Financial Services Monitor (OMFSM), launched in Nairobi, explores the financial wellbeing of employed Kenyans. It focused on urban and peri-urban adults aged 20 to 59, and earning per centKsh 12,000 or more, who represent approximately 63 of the country’s population aged 15 to 64.
“As the OMFSM 2024 reveals, the traditional ways of earning a living or managing household expenses are no longer sufficient. As a result, Kenyans are increasingly finding alternative ways to cope with these economic pressures,” said Anthony Mwithiga, Group Managing Director, Old Mutual Investment Group.
“Among the most notable shifts for adaptation is the rise of the informal economy. People are starting small businesses, offering services like tutoring, food delivery, or selling second-hand goods, often bypassing formal employment altogether”.
These findings paint a concerning picture of financial insecurity, with a majority of Kenyans expressing diminished confidence in the economy. While some consumers were optimistic in 2023, many have adopted a more neutral stance this year.
Key factors contributing to the decline in confidence include high living costs, taxes, rising food prices, unemployment, and a difficult business environment. As a result, only 3 in 10 Kenyans report that their household income consistently covers all expenses with money left over at the end of the month.
In response to these financial challenges, many Kenyans are becoming more cautious with their spending. They are downsizing their living arrangements, opting for cheaper brands, moving children to more affordable schools, and cutting back on discretionary expenses such as dining out, entertainment, and travel.
To supplement their incomes, many are turning to entrepreneurship. The OMFSM 2024 confirms that half of Kenyans now own a business, with 30 per cent of these ventures formally registered. However, only 16 per cent of these businesses are insured, leaving them vulnerable. Additionally, most entrepreneurs rely on personal savings, business profits, and loans from savings groups (chamas) to fund their businesses.
Meanwhile, despite increasing financial struggles, Kenyans are prioritizing their long-term financial security. Eighty-five percent acknowledge the importance of saving for retirement, and the number of consumers saving for the future has increased—rising from 26 per cent in 2023 to 36% in 2024. However, confidence in having enough for retirement has significantly dropped, from 12 per cent last year to just 7 per cent in 2024. Those saving for retirement primarily use employer pension schemes, savings groups, or personal investments.
