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(EoY) survey recently conducted by Ipsos.
Cost of Living
A majority of Kenyans across the country are
pessimistic about the cost of living and general economic conditions in 2014. Specifically, the
survey findings reveal that 70% and 60% of Kenyans respectively expect the cost of living and economic conditions to worsen next year. On the contrary, when a similar study was conducted in December last year (2012), Kenyans were more optimistic towards 2013 as 67% expected the cost of living to drop whilst another 62% anticipated the economic conditions to improve.“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. The VAT Act 2013 has seen increase in the cost of many household goods and it is still an enormous challenge for Kenyans to meet their daily basic needs” says Margaret Ireri, Managing Director, Ipsos Kenya.
Employment
In regards to employment, those who feel the situation will improve have declined from 61% to alow of 37%. According toWorld Bank, meaningful GDP growth, targeted employment creation can only be achieved if an economy registers at least a 7 percent growth rate and sustains it over decades but this is currently not the case in Kenya. “Employment creation in Kenya continues to be an insurmountable task in both the formal and informal sectors. The formal sector has a low absorption capacity relative to the high growth rates of the labor force. In as much as the informal sector has the potential to employ relatively larger
number of Kenyans, its absorption capacity is dependent on a consistently strong and long term economic performance which has not been the case in Kenya” says Ms Ireri.
High Cost of Living Dampens 2014 Outlook
The 2011 EoY survey showed that 67% of Kenyans expected the cost of living to worsen in 2012.
During the same period (December 2011), inflation stood at 18.93 %. This situation was different in
the 2012 EoY survey where only 26% indicated that the cost of living would worsen in 2013,
inflation then stood at 3.25% (November 2012). The inflation rate in November 2013 stood at
7.36%, it is therefore not surprising that the more than two thirds (70%) of Kenyans expect the cost
of living to worsen in 2014. Notably, in at least six national household surveys Ipsos has conducted
over the last one year, the high cost of living has repeatedly been mentioned as the most pressing
problem facing Kenyans.
Pessimism Despite Favorable Economic Growth Indicators
In an end of year survey carried out by Ipsos in 2011 on the expectations of the economic conditions, 62% stated that 2012 would be worse; this dropped to 19% in terms of expectations 2013. In the current survey, 60% of Kenyans expect the economy to be worse in 2014. The sentiments above contradict the GDP growth trends - Kenya’s economy is expected to grow by about 5% in 2013 and this would be an improvement from the 4.6% growth in 2012. Future prospects are bullish as the GDP growth is projected to be 6.0% in 2014. In addition, Kenya’s GDP growth rate is outstripping the averages for Africa and Global economies2. “Despite such good economic growth prospects, Kenyans are still pessimistic about 2014. There is a paradox of economics between the fiscal indicators and the quality of life as the ordinary mwananchi feels (or sees) the economy at a micro level and not a macro level. The pessimism shows that Kenyans are most likely responding to the current conditions they are experiencing such as high cost of goods and services rather than ‘invisible’ macro-economic conditions” says Ms Ireri.
Africa’s economic growth was 4.2% in 2012 and is projected to accelerate to 4.5% in 2013 and further to 5.2% in 2014. The growth rate of the global economy dropped from 3.9% in 2011 to 3.2% in 2012.Lukewarm Expectations for Employment
Expectations for employment opportunities in 2014 is moderate as 40% expect it to improve, 37%
expect things to worsen, 15% to remain the same. In the previous survey, 61% of Kenyans expected
the employment situation to improve while a small proportion (12%) expected the situation to worsen in 2013. “With all the presidential aspirants promising to reduce unemployment if elected, it is not
surprising that many Kenyans had high expectations for 2013. With the election behind us, Kenyans looking out for visible signs employment opportunities in line with the ‘kusema na kutenda’ pledge and evidence of these are yet to be seen,” says Ms Ireri.
LukewarmSentiments for Security in 2014
Nearly half of Kenyans (49%) have expectations that security will be better in 2014 compared to
2013. A third (33%) expects that it will be worse, 14% same as 2013 while 4% are not sure. The
government has recently announced that it will initiate ‘nyumba kumi’ meant to have individuals
get to know who their neighbors are in an effort to improve security.
Political Climate
In terms of the political climate, there is slightly better expectation for 2014 compared to other
variables prompted. 27% of Kenyans expect 2014 to be better, 37% to be worse, 28% to be same as
2013. The Jubilee Government has been in office for 9 months and it continues to face opposition
internally (as a coalition) and from the opposition, this could be a sign that the political climate may worsen in 2014. The previous year’s (2012 EoY) sentiments were made at a time when the country was preparing for election. In this survey, more than half (53%) of Kenyans expected the political climate in 2013 to be better. The hotly contested elections were to come to an end and Kenyans were optimistic that the country would focus on development agenda instead of politicking. On the contrary, 2013 has been a year of mixed fortunes politically - there was the presidential election petition together with other petitions challenging election of some governors, senators and MPs which have resulted in by-elections. There have also been disputes on implementation of devolution (marked by centralization and devolution of services) and lately a section of Jubilee allied politicians indicating that the URP wing is dissatisfied by the number of appointments to government positions it has received so far. Moderate political activity was experienced in 2011 compared to 2010. In 2010, there was heightened tension associated with referendum campaigns for the Constitution promulgated on 27th August 2010 and naming of ICC suspects. 2011 was characterized by passing of new legislation giving effect to the New Constitution and ICC hearings. 2012 was a political year marked by voter registration, campaigns (creation of CORD and Jubilee) culminating in the March 2013 elections.
Financial Stability and Pursuit of Higher Education
The Main Focus of 2014 The main issues that many Kenyans with a resolve plan to work on in 2014 are those that relate to financial stability (savings (24%) and getting a job/new job (17%) and furthering their education (14%). However, 41% have not yet fully laid out their plans. Also mentioned were things such as getting married, doing more physical exercises, improved spiritual life and socializing with friends. In the previous survey, we had Kenyans indicating that they intended to either start or expand their investments in 2013 and notably no respondent mentions this as part of 2014 wish list. This is an indication that either investments are not a priority for Kenyans or the cost of living is biting too hard. “The 2014 wish list has been influenced by the high cost of living as the number of those intending to invest has dropped to zero. The prices of goods have risen and with Kenyans are spending more, they are left with nothing to invest” says Ms Ireri.
Save more money 24%
Go to school or further my studies 14%
Get a job 13% Go to school or further my studies 14%
Get married or marry 17% Expand investment ventures 13%
Have a child 8% Start investing 12%
More physical exercises 6% Change jobs 6%
Have a closer relationship with God 5% Have a closer relationship with God 6%
Change jobs 4% Construct or buy a house 6%
Socialize more with friends 4% Get married or marry 3%
About the survey:
The target population for this survey was Kenyans aged 18 years and above. The sample size was
1,619 respondents living in urban and rural areas. The margin-of-error attributed to sampling and
other random effects of this poll’s sample size is +/- 2.41 with a 95% confidence level. The fieldwork for this survey was conducted in November 2013. Data was collected through telephonic interviews (CATI – Computer Aided Telephonic Interviews), 5,094 Kenyans were contacted before reaching a statistically representative nationwide sample of 1,619. Ipsos Kenya funded the survey.
Please find the full report through the link at http://ow.ly/s8FLZ
For further details please contact:
Margaret Ireri
Managing Director
Ipsos Kenya
margaret.ireri@ipsos.com
Victor Rateng
Project Manager Opinion Polls
Ipsos Kenya
victor.rateng@ipsos.com
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