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Economy

Average Nairobian spends 7 times more than poorest Kenyan - survey

Shoppers at a supermarket in Nairobi. The average person living in the city spends more than twice the national average of Sh9,237. PHOTO | FILE
Shoppers at a supermarket in Nairobi. The average person living in the city spends more than twice the national average of Sh9,237. PHOTO | FILE 

There are wide disparities in the purchasing power of individuals and families living in different counties, a domestic consumption analysis by Nation Newsplex and the Institute of Economic Affairs (IEA) reveals.

Residents of Nairobi have the highest spending power. With an average monthly consumption per person of Sh19,625, the average person living in the city spends more than twice the national average of Sh9,237.

In contrast, with a monthly average spending per person of Sh2,705, the spending power of the average resident of Wajir, the lowest ranked county, is three times less than the national average and seven times less than the Nairobi resident.

The huge inequality in the consumption and spending power among people in different counties is manifested in the fact that 33 counties - 70 per cent of all devolved units - have per person spending averages that are below the national average.

With a consumption average of Sh7,802 per person, the average resident of Homa Bay, the county that is halfway in the consumption ranking (median), spends 16 per cent less than the national average. Spending in the median county being significantly below the national average indicates inequality among counties.

Mombasa, with a spending of Sh15,629 per person, Kiambu (Sh13,898), Kisumu (Sh11,827) and Nakuru (Sh10,720) round off the top five.

Consumption per person was highest in counties with high population density, high urbanisation rate, high rainfall and low poverty index.

This is because there is more opportunity for wealth generation and employment in urban areas, while high agricultural productivity relies on high rainfall.

Nairobi and Mombasa have an urbanisation rate of 100 per cent, way above the national rate of 32 per cent. Kiambu is 62 per cent urbanised, while Kisumu and Nakuru are 52 per cent and 46 per cent urbanised, data from the Kenya National Bureau of Statistics show.

The average annual rainfall in the top five counties is 1,146mm compared to an average of below 680mm in the bottom five counties. This means that the average rainfall in the top five counties is almost double that of the bottom five.

Inversely, counties with the least spending power are mainly affected by harsh environments and are generally low income regions with high poverty index. Wajir, the county whose residents have the lowest monthly purchasing power, has an urbanisation rate of 15 per cent.

It is followed by Mandera with a consumption per person of Sh3,491 and an urbanisation rate of 18 per cent. In third place from the bottom is Turkana whose average citizen spends Sh3,768 per month, followed by Samburu with Sh4,797 and West Pokot with Sh4,889.

An analysis by the IEA found a correlation between purchasing power and poverty levels. The bottom five counties are among the eight poorest devolved units with poverty indexes ranging from 88 per cent to 66 per cent.

In contrast the counties whose residents and families have the five best spending power have poverty indexes ranging from 22 per cent to 40 per cent.

When Newsplex looked at consumption per household, the ranking of the counties changed little. The analysis of the consumption level per each household in each county reveal that Nairobi still leads with Sh62,529 per household per month. It is followed by Mombasa (Sh54,640), Kisumu (50,542) and Lamu (48,426). Kiambu rounds off the top five with Sh48,077.

Lamu is an outlier because it does not have the characteristics of other top spenders. Lamu residents have a high purchasing power despite the county’s low population density (426 people/km2), below average rainfall (609mm) and low urbanisation rate (20 per cent).

The average family in Nairobi consumes three times as much as that in Wajir, the county with the least purchasing power.

The other bottom five counties in terms of consumption per each household are Turkana, Marsabit, Samburu. These counties are mainly semi-arid low income regions.

Thirty two counties have a consumption per person below the national average of Sh40,678. The consumption per person in the county in the middle, Nyeri (Sh35,507), is 13 per cent below the national average.

One out of six shillings spent on domestic consumption in Kenya is by a Nairobi resident. The county spends more than the next three counties combined.

The top three counties in terms of total consumption in 2015 in nominal terms are Nairobi (Sh844 billion), Kiambu (Sh309 billion) and Nakuru (Sh236 billion).

The bottom five counties in terms of nominal total consumption are Lamu and Samburu with Sh14.7 billion each and Tana River, Isiolo and Marsabit with Sh19.6 billion each.

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