'Data doesn't lie', but Kenyans say their pockets do

There was a time when it was normal for Cliff Odera to make gross sales of Sh200,000 in a month. Those days are now gone.

“Now making even Sh100,000 is difficult,” he says.

Odera, a trader in the clothing industry, notes that business seems to be worsening by the day. He attributes the slowdown to the raft of new taxes introduced by the government, most of which came into effect in 2023.

The cost of importing his stock, he adds, has also gone up.

“Customers are not streaming in as they used to. They claim taxes have squeezed their incomes. It is like clothes are now becoming a luxury,” he says.

According to him, anyone in this line of business today can easily slip into losses.

“There are those who have diversified; I haven’t. But the situation is pushing me to start thinking about it,” he tells The Standard.

If Odera were to hear the arguments tabled by National Treasury and Economic Planning Cabinet Secretary John Mbadi on how well the economy is performing, he would barely recognise the country being described.

For 11 minutes, during the launch of the 2026/27 budget preparation process last week, Mbadi defended the country’s economic standing – or perhaps Kenya Kwanza’s version of it – particularly on the cost of living.

From inflation rates, current account balance and import cover, to reduced T-Bill rates and an improved credit rating by S&P, Mbadi reeled off statistics, insisting that “data does not lie.”

“In 2022, we had an unimaginable inflation at 9.6 per cent. It has come down to 4.1 per cent (July),” he said. “To me, clearly, that also reflects a reduction in the cost of living.”

One of the indicators he highlighted was the 4.9 per cent GDP growth in the first quarter of this year, compared with 4.7 per cent in the same period last year. Treasury projects overall growth of 5.3 per cent in 2025.

As glossy as the numbers sound, a major challenge for President William Ruto’s administration has been translating them into real-life impact at the micro level – where most Kenyans struggle daily to make ends meet.

The Affordable Housing Levy at 1.5 per cent of gross income, the Social Health Insurance Fund (Shif) at 2.75 per cent, and higher contributions to the National Social Security Fund (NSSF) are among the taxes introduced under Ruto’s watch.

This is in addition to the withdrawal of the fuel subsidy, which pushed pump prices beyond the Sh200 mark, even though government officials argue that prices have since dropped to about Sh185 in Nairobi.

For David Muigai, a taxi operator, the situation is even more dire given the price wars among digital taxi companies. Cognisant of hard times, the platforms are lowering fares to attract more passengers, but the cost burden falls squarely on drivers.

“In trying to maintain the same number of trips as when the economy was stronger, they are now reducing the prices. They are racing to get more trips because people don’t have money,” he says.

Fuel costs, he adds, remain higher than they were before the subsidy was removed.

“As a driver, we are the ones bearing the costs,” he laments.

The same story is echoed by John Mutua, a small-scale trader in the city, who recalls leaving the taxi business years ago after constant wrangles with car owners and dwindling returns.

“It’s years since I stopped driving. I have even carried people’s luggage here in town for a living,” he says.

Prof Samuel Nyandemo, a senior lecturer in economics at the University of Nairobi, argues that the government’s raid on Kenyans’ pay slips has worsened their plight.

“Things cannot be better. Prices of essential commodities have gone up drastically. President Ruto has reduced pay slips of many salaried Kenyans,” he says. “Even if (the cost of living) has reduced, purchasing power has been eroded. This leaves Kenyans in a worse situation than before.”

Official data paints a mixed picture. For example, one kilo of sugar that retailed at Sh217 in November 2023 dropped to Sh164 in July 2024, before climbing back to Sh186. Petrol, which had reached Sh217 a litre, dropped to Sh189 and now goes for Sh185 in Nairobi. A kilo of maize flour, meanwhile, has risen to Sh75 from Sh64 in July 2024, while Irish potatoes are now Sh123 a kilo, up from Sh103 in November 2023.

Deputy President Kithure Kindiki has argued otherwise. Speaking recently in a church service, he insisted that a stronger shilling proves the economy is improving and that more Kenyans can afford basic commodities.

“The cost of basic food items such as maize flour was Sh250 for a two kilogramme packet, but today, due to the efforts of our president, prayers and those working with him, the same packet goes for Sh100,” he said.

Mbadi, during the budget launch, similarly criticised sceptics of the government’s narrative.

“If you want to know the reality, early 2023, when we really felt the cost of living could not be afforded by ordinary people, we had sufurias on our heads. Today, how many people are in the streets with sufurias on their heads? I don’t see them,” he said.

He pointed to an improved forex reserve that has grown to 5.2 months of import cover from 2.3 months in 2022, a 7.7 per cent rise in exports, and the narrowing of the current account deficit from 2.6 per cent of GDP to 1.3 per cent as evidence that the economy is on the mend.

Crowning it all, he said, was Kenya’s improved credit rating by S&P, from B- to B, owing to how the government managed the 2027 Eurobond obligation.

“Can’t you see that as a positive for this government?” posed Mbadi. “That is something you don’t do in political rallies. That is something you can never do in church. That is something you do by pragmatically focusing on and projecting what is likely to create a risk in the economy.”