Kenyans keep New Year expectations low as life gets harder

A student shops for books at a supermarket in Nyeri. The cost of books has gone up following the introduction of VAT. FILE 

By DAVID HERBLING, hdavid@ke.nationmedia.com

In Summary

• Saving more, getting a job and higher studies top New Year wishes but inflation dampens spirits.
• More than two-thirds or 70 per cent of Kenyans are pessimistic about their prospects in 2014.
• They cite increasing cost of essential goods and services, scarce job opportunities and rising insecurity as their reasons for despair.

Kenyans have lower expectations for jobs and better welfare in the New Year with the rising cost of living a key dampener despite promising economic indicators.

A new study by Ipsos-Synovate on expectations for 2014 backs the criticism that government has for more than 10 years now pursued policies that accelerate growth without generating enough jobs and improving human welfare.

More than two-thirds or 70 per cent of Kenyans are pessimistic about their prospects in 2014. They cited increasing cost of essential goods and services, scarce job opportunities and rising insecurity as their reasons for despair.

“Inflation and the high cost of living are making Kenyans downbeat. Although the economy has grown at a macro level, the benefits of this growth have not trickled down to the ordinary mwananchi,” said Ipsos-Synovate Kenya managing director Maggie Ireri.

The end-of-year survey carried out in November in major urban centres and rural areas asked 1,619 respondents about their outlook and prospects of the coming year.

Overall, 60 per cent of Kenyans expressed fears that inflation will worsen in the coming year and similar worries were expressed on unemployment (37 per cent), crime and insecurity (33 per cent) and increased political bickering (37 per cent).

The negative sentiments come barely a month after the World Bank cut Kenya’s economic growth forecast for 2014 to five per cent from the 5.7 per cent it had earlier projected in June 2013.

Kenya’s GDP expanded by 4.6 per cent in 2012 compared to a growth of 4.4 per cent a year earlier but the country is yet to reach the 7.1 per cent tempo registered in 2007.

The Bretton Woods institution said low levels of absorption of funds by State departments and a high interest regime were responsible for slowing down growth.

The findings highlight Kenyans’ growing frustrations with almost half of respondents in the Ipsos-Synovate survey or 49 per cent feeling their economic situations have worsened in the last nine months under President Uhuru Kenyatta’s Jubilee government.

Kenya’s economy expanded by 4.4 per cent in the third quarter of this fiscal year which was slightly slower than the 4.5 per cent growth recorded during the same quarter of 2012, data from Kenya National Bureau of Statistics (KNBS) show.

READ: Kenya's economic growth slows to 4.4pc in Q3

“The economy is growing but the benefits are not trickling down to the base of the pyramid hence the gap between the rich and the poor is widening,” said PKF Eastern Africa CEO Atul Shah.

Ms Ireri pointed out that in at least six national household surveys the firm has conducted over the past one year, high cost of living has repeatedly been mentioned as the most pressing problem facing Kenyans.

It is the first time in two years that worsening economic conditions have put a damper on Kenya’s New Year celebrations, and analysts link it to the introduction of value added tax (VAT) on a wide range of essential goods that were previously zero-rated.