Kenyans are struggling to make ends meet with about two-thirds of households experiencing at least one event that triggered a decline in their wellbeing over a period of five years, reveals a Nation Newsplex review of household budget data.
Rural homes were more likely to suffer a shock that affected their welfare in the five years preceding the latest Kenya Integrated Household Budget Survey (KIHBS). More than two-thirds (69 per cent) of rural households reported at least one adversity compared to 53 per cent in urban areas.
Nationally, large rise in food prices was reported as a severe shock by almost a third of homes (30 per cent), the highest. It was followed by droughts or floods (27 per cent). Severity of a shock is an assessment of the extent to which an adverse event affects the family’s socioeconomic welfare.
READ: Two-thirds of loans taken by families are spent on food and school fees
READ: Grim figures paint a hollow picture of Kenya’s healthcare
It is not surprising that Kenyans are straining to put food on the table given the rising cost of living, frequent droughts and stagnant wages in the last few years. An earlier Newsplex review of inflation and employment data show that from 2010-2017, the average annual inflation rate was 7.6. In contrast, the real average monthly income dropped by almost two per cent from Sh31,213 in 2010 to Sh30,750 in 2017.
Real wage is the income of an individual after taking into consideration effects of inflation and power while inflation is the rate at which prices of goods and services rise over time, resulting in money losing value. This means that with inflation increase, Kenyans spent more money to buy less goods.
Other grave shocks reported by a high share of households were death of a family member, besides the head or a working member, and death of livestock, which affected about a quarter of families, crop disease or crop pests (15 per cent) and family business failure (10 per cent).
Other major hardships experienced by families include robbery or burglary or assault, loss of salaried employment or non-payment of salary, carjackings, break-up of the household, death of family head, birth in the family, HIV and Aids, severe water shortages, jailing of family head, eviction, fire, conflict, and end of regular assistance, aid, or remittances from outside the household.
WHO also finds that three-quarters of Kenyans are at risk of impoverishing expenditure for surgical care − direct pay for surgical and anaesthesia care which drive people below the poverty line.
Even though health issues, except for HIV and Aids, did not feature among the top severe shocks, figures from the World Health Organisation show that two-thirds of Kenyans are at risk of catastrophic expenditure − direct out-of-pocket payments for surgical and anaesthesia care exceeding 10 per cent of total income − when surgical care is required. The UN agency also finds that three-quarters of Kenyans are at risk of impoverishing expenditure for surgical care − direct pay for surgical and anaesthesia care which drive people below the poverty line.
Households whose monthly consumption spending per person fall below Sh3,252 and Sh5,995 in rural and urban areas respectively are considered to be overall poor.
Two-thirds of households that experienced huge increase in price of food say they suffered income loss due to the shock, according to the KIHBS 2015/2016.
Two in five households that experienced a traumatic event involving drought or flood suffered a loss of income and assets. The same ratio of households that experienced a death of the head of the family experienced loss of income and assets.
Also, two-thirds of households that were overwhelmed by the birth of a baby and half of homes that experienced severe water shortage suffered loss in earnings.
A higher proportion of households that experienced shocks were in Kitui (96 per cent), Migori (92 per cent), and Baringo and Narok (91 per cent each) counties.
Some households that were affected by large fall in sale price for crops and break-up of the household (a third each), livestock were stolen (43 per cent), livestock died (48 per cent) or robbery, burglary and assault (47 per cent) did nothing to cope and regain their previous status
About two-thirds of the shocks experienced by households in Kitui were related to drought and high food prices. In Migori death loomed large, with almost half of the homes suffering shocks related to the death of a family head (39 per cent) or other family member (10 per cent). In Baringo the top adverse events were livestock death and crop disease, which affected about a quarter of households as well as drought or floods (16 per cent).
Households in Kiambu (17 per cent), Mombasa (24 per cent), Bomet (28 per cent), Garissa (28 per cent), and Wajir and Busia (30 per cent each) reported low incidences of shock.
First severe shock
About a third of homes in Kitui and Nairobi experienced a first severe shock related to food prices rising steeply, the highest in this category. The first severe shock has the most devastating effect to families’ economic or welfare status.
Nearly half of families in Samburu and Turkana counties were subjected to a first shock related to drought or floods, the highest proportion in relation the adversity. Two in five homes in Elgeyo Marakwet and Migori suffered a death of a family member, besides the head and a working member, as the first major shock. This was the highest ratio involving the hardship.
In most instances, shocks affected only the reporting households. End of regular assistance, aid, or remittances from outside the household (84 per cent), birth at home and family non-agricultural business failure (each 79 per cent) in many instances affected only the reporting households. The shocks that affected the whole community were ethnic or clan clashes (47 per cent), droughts or floods (44 per cent) and severe water shortage (42 per cent).
Overall, affected households tend to spend available savings in the event of a shock.
But the KIHBS findings also reveal that families employ different coping strategies dependent on the type of shock experienced. For instance, a majority of households that were affected by death of a family member, fire, and dwelling destroyed or damaged, or conflict received help from family and friends. Homes that lost livestock through death or theft mainly resorted to selling animals, while those that experienced a large rise in price of food reduced food consumption.
A different survey by the Kenya Financial Sector Deepening programme finds that a third of Kenyans report that they sometimes or often go without food.
Mirroring the budget survey, figures from the 2016 FinAccess Household Survey indicates that over 40 per cent of households used their savings to cope with major shocks. A considerably higher number of households in urban areas sold their assets or sought help from social networks.
An earlier Newsplex analysis found that one in three shilling (39 per cent) borrowed by households is spent on basics such as food, toiletries and water.
The findings further show that some households that were affected by large fall in sale price for crops and break-up of the household (a third each), livestock were stolen (43 per cent), livestock died (48 per cent) or robbery, burglary and assault (47 per cent) did nothing to cope and regain their previous status
Families also received help from NGOs, religious institutions and government. Others sent their children to live with relatives, prayed or sought the help of a diviner.
Other coping strategies include finding a better job or additional work, cutbacks on expenses and borrowing money from chamas, Saccos and banks.