Kenyans spend less on entertainment as taxes, failing businesses cut incomes

Traders in Eastleigh display their goods for sale on December 27, 2024. The year festive season saw a lower turnout of shoppers than the previous year.

Photo credit: Billy Ogada | Nation Media Group

Tough economic times are disrupting Kenyans’ habit of enjoying popular festivities such as the just ended Christmas and New Year, a new survey has shown, revealing how the majority were unable to spend on entertainment as they were tied to spending on basic needs.

This is based on a consumer spending survey by ICEA Lion Asset Management, which shows that in the three months to December 2024, about half of Kenyans allocated more than 40 percent of their income to basic needs such as food, shelter, clothes, school fees and transport.

Half of Kenyans allocated less than 10 percent of their incomes to eating out/home improvement items/leisure/entertainment and seven percent did not spend on them completely, the survey conducted on 1,210 individuals and 233 retail businesses shows.

At least 15 percent of Kenyans did not budget for any traveling, holiday and luxury clothing during the period whose highlight was the Christmas festivities, while 53 percent of Kenyans spent less than 10 percent of their income on the enjoyment.

The survey notes that during the three months between October and December 2024- when Kenyans have historically spent on entertainment most- 92 percent of Kenyans either did not spend at all or spent less than 20 percent of their income on traveling, holiday and luxury clothing.

The low spending on luxury and entertainment has been reported amid reports of a drop in incomes for workers in different sectors, due to poor business and high taxes.

Wholesale and retail sector is hardest hit with one in every three workers reporting a reduction in their income over the past year, while 29 percent of workers in the transport sector also had their pay reduced, the survey notes.

Overall, 24 percent of workers across different sectors experienced a decrease in their incomes while only 15 percent had an increase.

“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 percent. Conversely, people working in the real estate/building and construction sector saw the highest increase, with 22 percent of respondents reporting a rise in income,” the survey notes.

Of the workers interviewed, 22 percent of those in the real estate, building and construction sector indicated that their income increased as an equal number indicated that theirs had decreased.

At least 29 percent of workers in transport and logistics indicated that their income decreased while 12percent said theirs went up.

It was in the wholesale/retail sector where most workers (33 percent) experienced a drop in their income, while 13 percent reported that theirs had increased, the survey noted.

In the hospitality and manufacturing sectors, the survey shows, 24 percent of workers indicated that their income reduced.

The survey notes that the majority of Kenyans who indicated that their incomes reduced between December 2023 and December 2024 cited poor business and increase in taxes.

At least 42 percent of respondents said the cause for reduction of their incomes was because their businesses were not doing well, 30 percent cited increase in taxes and 18 percent said they had lost jobs.

Among those who reported an increase in their incomes, 29 percent said they had changed jobs, 28 percent said they had a side hustle and 24 percent had received a pay increment.

The survey also reveals interesting details on Kenyans’ usage of the money they earn, with the majority spending on basic needs, as a good number cut spending on luxury and other secondary needs entirely.

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Note: The results are not exact but very close to the actual.