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Kenyans are survivors, they spend most on bread and butter


Food, drink largest cost for Kenyans

Spending a large portion of one’s income on food and drink is an indicator of poverty

Kenyans spend the lion’s share of their disposable income on food and beverages, a review of consumption data by Nation Newsplex reveals.

For every Sh100 that a Kenyan spends, Sh45 goes to food and drink.

Data from the Kenya National Bureau of Statistics (KNBS) shows that between 2010 and 2015, Kenyans spent nearly half of their disposable income on these items. Their spending remained steady at between 43 per cent and 46 per cent of total consumption expenses during this time. 

Spending a large portion of one’s income on food and drink — which are needed for basic survival — is an indicator of poverty. Such a spending pattern means that little money is left over to be spent on other things that are important for quality life, including clothing, shelter and transportation.

Indeed, spending on clothing and shoes was equivalent to five per cent of the expenditure on food and beverages. That means for every Sh45 that Kenyans were spending on food, they were spending about Sh2.50 on clothes and shoes.

The relatively large spending on food and drinks is in line with the characteristics of a lower middle income economy in which wages are low.

As countries develop, people spend proportionally less on food and that leaves more money for investments as well as luxuries. 

POORER NEIGHBOURHOOD

Research from the United States Department of Agriculture and Washington State University shows that households that spend a greater proportion of their incomes on food generally consume fewer calories than those who spend a smaller proportion.

This exposes children to the risk of malnutrition, which can also affect both their physical development and their ability to remain in school.

Generally, the US proportionally spends less on food than anyone else in the world. According to research from US Department for Agriculture Americans spend less than 10 per cent of their income on food and drinks compared with 20 per cent for South Africans and 25 per cent for Indians. Nigerians and Egyptians spend about 40 per cent of their disposable income on food. Kenya is at about 45 per cent.

According to the KNBS, the proportion of spending on housing gradually declined between 2010 and 2015, from nearly eight per cent in 2010 to about six per cent in 2013.

However, spending on other goods and services remained fairly constant, meaning that people are cutting back their housing costs to buy food and beverages. This is like moving to a poorer neighbourhood so that one can afford to spend more on food.

In monetary terms, the average spending per person on food and beverages was Sh22,658 in 2010, Sh27,756 in 2011, Sh30,892 in 2012 and Sh32,457 in 2013. In contrast, housing consumed Sh3,940 in 2010, Sh3,942 in 2011, Sh4,404 in 2012 and Sh3,850 in 2013.

SUGAR AND BEER

These figures tell an interesting story. While the amount of money spent on food and drinks increased by 43 per cent during the period under review, that of housing actually went down by about 10 per cent. In other words, inflation on food items has been much higher than that on housing.

This deduction is supported by the Central Bank of Kenya’s Monthly Economic Report for December 2013. The report shows that inflation on food items averaged 10.4 per cent in 2013 while that on housing was just five per cent. Indeed, food and beverages were the greatest contributors to the overall inflation that year – accounting for 57 per cent of the inflationary pressure.

The analysis found that only sugar and beer show marked variation in consumption rates. From 20kg per person per year in 2007, the intake of sugar fell to 17kg in 2009, then up to 20kg the following year, down again to 15kg in 2011 and back up to 20kg by 2013.

The consumption of beer, however, moved in the opposite direction: going up when that of sugar went down and vice-versa. Without attempting to read too much from the data, it appears that people replace alcohol with tea depending on the economic situation!

High-income countries such as the United States and the United Kingdom have higher food spending in absolute terms, but the share of household consumption expenditures devoted to at-home food is relatively low — less than 10 per cent.

In Kenya and other low-income countries, at-home food’s share of consumption expenditures can approach 50 per cent. Per capita calorie availability follows the reverse pattern.

In 2011, US per capita calorie availability was among the highest, at 3,639 calories per day, while Kenya’s was only 2,170, 40 per cent less.