In December 2023, Kenya’s economy, with Nairobi at the forefront, witnessed disproportionately high inflation, leaving a devastating experience for the higher class rather than people with low incomes. High-income earners complained bitterly about the prices of goods and services. This contradicts the usual trend that increased consumer prices only affect low-income earners more than the rich, who can survive the economic shock.
A report from the Kenya National Bureau of Statistics (KNBS) in the Kenyan business news publication states that inflation for the higher class in Nairobi rose by 6.62% in December. This percentage is higher than the 6.16% and 6.35% inflation rates for middle- and lower-income households.
This was contrary to the prior year when lower-income households suffered a 9.23% spike in inflation against the 6.86% rise that higher-income households experienced.
However, the rise in the inflation level of the rich during this period resulted from the spike in fuel prices. Statistically, high-pitched earners spend more on transportation than low-income households, making them directly the bearer of the inflation saga.
It was also recorded that transportation was the only index that recorded a double-digit increase in December.
The report from the Kenyan business news publication says, “Transport costs have a weighting of 17.63 per cent of Nairobi upper-income household expenditures in contrast with 9.25 per cent and 14.14 per cent for lower and middle-income groups respectively,”
Statistically, data shows that those in the middle or lower class spend more of their income on food than transportation, giving 36.32% for lower-income households and 21.65% for the middle class.
The KNBS’s report noted that Nairobi’s upper-income class comprises households that spend over Sh184,395 per month, accounting for 3.5% of all households in the capital city.
Furthermore, the report made it clear that “Households spending Sh46,355 or less per month constituting 70.899 per cent of all households in Nairobi fall in the lower income group while households spending Sh46,356 up to and including Sh184,394 per month make up the middle-income group, constituting 25.58 per cent of all Nairobi households,”
However, families outside Nairobi experienced the most excellent inflation rates, with the 6.84% cost of living in December last year higher than the national average of 6.63% for the month. Data shows that 25% of the population falls under the middle-income class.
