Kenya’s rich feel plight of low-income earners

IN December, Kenya's economy, specifically in Nairobi, experienced an aberration in which inflation disproportionately affected those with the most wealth rather than the poor. High-income earners were hit the hardest by consumer prices.

This was an odd trend given that a rise in consumer prices typically affects low-income households more than the rich who can absorb the economic shock.

According to the Kenya National Bureau of Statistics (KNBS), as seen in the Kenyan business news publication, BusinessDaily, inflation for the higher class in Nairobi rose by 6,62 percent in December, which was higher than the 6,16 percent and 6,35 percent inflation rate for middle and lower-income households respectively.

This report was in contrast to the year prior which saw lower-income households suffer a 9,23 percent spike in inflation against the 6.86 percent rise that upper-income households experienced.

The spike in inflation levels for the rich during the period under review is a result of higher fuel prices. Given that higher-income households spend more on transportation than low-income households, they naturally felt more of the impact.

Part of the spike also stems from the fact that transportation was the only index that recorded a double-digit increase in December.

“Transport costs have a weighting of 17,63 percent of Nairobi upper-income household expenditures in contrast with 9.25 percent and 14,14 percent for lower and middle-income groups respectively,” the report by BusinessDaily reads.

On the other hand, those who fall under the middle or lower class typically spend more of their income on food than transportation, at 36.32% for lower-income households and 21,65 percent for the middle class.