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It’s a tale of two Easters as Kenyans mark paschal season

Easter Decorations. While some Kenyans have nothing to celebrate this festive season, for others it's boom time and a time to party.

Photo credit: Pool

Easter One

Chris Agoi, who is in his 40s, will spend this Easter weekend at his rural home in Kakamega. He is not on holiday, as he lost his job in February and is only getting by with the little money he has left.

The packaging company he was working at, which is based in Mlolongo, rendered dozens of its workers redundant as it faced a decline in orders for cartons.

“This Easter will not be a good one for me. I am biding my time here because life has become so tough in Nairobi. I can only go back if I find another job,” said Mr Agoi.

His predicament mirrors the struggles of millions of Kenyans who are struggling to make ends meet.

On the other hand, their well-to-do counterparts are traveling around the country and the world and making a kill from their investments.

Hoteliers’ boom

While Mr Agoi worries about making ends meet, other Kenyans have the luxury to splash on holidays. And there are many of these Kenyans who have spare cash as data on advance hotel bookings shows a spike this season compared to last year.

The Easter holidays offers them a welcome opportunity to dash to various towns across the country, particularly tourist hotspots such as Mombasa, Lamu, Malindi and Diani.

A significant number of travellers, including tourists, booked hotel stays way ahead of the Easter season to enjoy lower prices.

According to the latest Market Perceptions Survey by the Central Bank of Kenya (CBK), forward bookings especially for March and April 2024 were higher than average.

The survey, which polled 84 hotels across the country, requested hotel respondents for forward bookings received so far for the period January to April 2024.

“The results showed slightly lower average forward bookings for January and February 2024 compared with 2023, but higher averages for March and April 2024,” said the survey.

Dividends boom

Among the category of Kenyans who will be enjoying their Easter holidays are investors in companies listed on the Nairobi Securities Exchange (NSE), especially commercial banks.

Cash, Dividends

Kenyattas and Ndegwas are among banking investors who pocket record dividends after most lenders registered triple-digit profit growth.

Photo credit: File | Nation Media Group

Thousands of investors in these entities are smiling all the way to the bank as the firms continue to announce record dividends.

Several lenders such as Standard Chartered Bank Kenya, Stanbic Holdings, Absa Bank Kenya, Cooperative Bank, I&M Bank have either raised or maintained dividends in what will give their shareholders a broad smile this Easter. StanChart shareholders will, for instance, get a dividend of Sh29 per share for its earnings for the year to December 2023.

This is a significant increase from the dividend of Sh22 they were paid last year as the bank paid 79.4 per cent of the net profit it earned to its shareholders.

Stanbic Bank shareholders will also be paid a record dividend of Sh15.35 per share, an increase from Sh12.60 last year, which is 49.9 per cent of the bank’s net earnings in 2023.

Cross-listed Ugandan electricity distributor Umeme has also raised its dividends, while agricultural firm Kakuzi Plc maintained its dividend at Sh24 per share.

Investors make a kill in bonds

As borrowers of loans from commercial banks continue to heave under rapidly rising interest rates, investors in Treasury bills and bonds are reaping big from record high interest rates.

In the most recent bonds auction, the CBK went to the market seeking Sh40 billion from investors. The issuance included a reopened three-year bond, a reopened five-year paper and a new 10-year bond.

On the reopened five-year bond, the government accepted bids from investors at an average interest rate of 18.41 per cent, which means investors will reap big from their investment.

This underpins the market opportunity available to the well-to-do who have disposable income that they can invest even as the larger segment of the Kenyan population sinks under the burden of high inflation and diminished incomes.

Unluckily for the larger population, this will expand the country’s huge public debt further, necessitating fresh borrowing and new tax measures to repay it.

Easter Two

Rise in unemployment as happiness dwindles

That happiness levels in Kenya have dropped for the first time in five years is a poignant indicator of how a large section of Kenyans is feeling especially about their economic situation.

According to the annual World Happiness Report 2024, Kenyans are only the 114th happiest people globally out of citizens from 143 countries that were surveyed. This is a drop of three places from position 111 in the previous year’s report.

The general decline in happiness can partly attributed to the frustrations that millions of Kenyans are facing as they search for jobs in vain.

Unemployment is at its peak

Around one million young people who graduate from colleges and universities yearly are confronted by an economy that is plagued by reducing hiring on the back of sluggish corporate earnings, hence increased unemployment. 

Photo credit: File | Nation Media Group

For instance, Mr Agoi has just added to the thousands of Kenyans who have lost their jobs in recent months.

According to the Federation of Kenya Employers (FKE), the rising cost of doing business had pushed about 70,000 workers, or nearly three per cent of the workforce, in the formal private sector out of employment between October 2022 and November 2023.

“The employment state is still very fragile. We are not yet back on track since Covid-19. Every day, we receive notifications from employers on their intent to declare redundancy,” FKE said in a statement in November.

Cost of living

While it has eased in recent months, the cost of living remains an enduring nightmare for Kenyans. According to the Kenya National Bureau of Statistics (KNBS), the cost of living – as measured by inflation – went up by 6.3 per cent in February.

This means that a majority of consumer goods are much more expensive now than during the same period last year.

Take the example of electricity. While a consumer would spend Sh985.01 on average to buy 50 units of electricity in February last year, they spent Sh1,406 to buy the same quantity of units last month, which is an increase of 42.7 percent.

The same is true of sugar, which is one of the most widely used consumer goods especially in baking and making of beverages.

While a kilogramme of sugar was retailing at Sh153.62 in February last year, the cost of the commodity went up 30.2 per cent to Sh200.01 last month.

Other commodities whose prices have gone up significantly during the period include carrots (40.7 per cent), beans (8.3 per cent), beef (16.5 per cent), diesel (20.4 per cent) and Irish potatoes (11.2 per cent).

President William Ruto assents to the Affordable Housing Bill at State House, Nairobi on Tuesday.

President William Ruto assents to the Affordable Housing Bill at State House, Nairobi on Tuesday.

Photo credit: PCS

Pay pain

From this month, Kenyans will resume paying the housing levy after President William Ruto signed the Affordable Housing Bill, 2024 into law last week.

This is a pain for workers who will part with 1.5 per cent of their gross pay to go towards construction of houses as well as employers who will be required to match the deduction with a 1.5 per cent contribution.

The pain is set to get worse in July when the deduction of 2.75 per cent monthly to go towards the new health insurance cover takes effect.

Workers will be deducted this amount from their salaries to go into the Social Health Insurance Fund (SHIF) which replaces the NHIF.

This comes just a year after Dr Ruto also raised contributions into the National Social Security Fund (NSSF) from Sh200 in February last year. This means that in a span of just over a year, the pay slip of workers has been raided like never before as the government races to hit ambitious tax targets to fund the budget and repay the country’s ballooning public debt.

Doctors strike

Doctors demonstrate in Eldoret town, Uasin Gishu County on March 01, 2024, over the attack of medics' union Secretary General Dr Devji Atellah.

Photo credit: Jared Nyataya | Nation Media Group

Doctor’s strike

For any Kenyan covered under the National Health Insurance Fund (NHIF) and who will be unfortunate enough to require medical attention at a hospital during the Easter holidays, he or she could be turned away or be forced to pay from out of pocket.

This is because NHIF has not been paying hospital claims, with arrears having hit about Sh20 billion, and therefore a lot of patients who don’t have cash are being turned away.

But this is not the only pain that Kenyans are experiencing. Doctors have been striking for more than two weeks now due to the government’s failure to post thousands of medical interns.

This has paralysed medical care across the country as doctors from many counties have joined the strike. It’s the wrong time to have a patient in a public hospital, and families nursing sick relatives will have much more to worry this season if they are dependent on the public health system.

“Most hospitals in Mombasa have shut. Only clinical officers are working,” said Ghalib Salim, the Coast Regional Secretary for the Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU) last week.

Counties on Travel

County and public officials have continued to spend way money on travel than is allowed by law.

Photo credit: Shutterstock

Extravagance by officials

Lavish spending on domestic and foreign trips by State officials is in contrast to the suffering being faced by millions of Kenyans.

According to data from the Controller of Budget (CoB), government officials spent Sh11.38 billion on trips in the six months to December 2023.

This is an increase of 40.1 percent from the Sh8.11 billion that they spent on the same in the six months to December 2022 underlining the burden that such expenditures have on taxpayers.

“In the first six months of FY2023/24, traveling expenditure amounted Sh11.38 billion, compared to Sh8.11 billion recorded in a similar period FY2022/23. This comprised domestic travel at Sh7.67 billion and Sh3.71billion on foreign travel,” said CoB Dr Margaret Nyakang’o.

The government is, however, seeking to reduce excesses by State officials, and last week, Head of Public Service Felix Koskei banned public officials from buying promotional items such as t-shirts, power banks and calendars using taxpayers’ money.

“Suspend and immediately cease the procurement, printing and production of corporate wear; including but not limited to t-shirts, shirts, tracksuits, and any other branded clothing items,” said Mr Koskei.

Investors lose

Millions of investors who have put their money in various stocks listed at the Nairobi Securities Exchange (NSE) recorded a 27.5 per cent fall in paper wealth last year.

The year was a particularly tough one for investors as rising global interest rates led to investor flight, leading to a fall in the price of stocks in many counters.

According to market data, the NSE closed the last trading day of the year with a valuation of Sh1.439 trillion from Sh1.986 trillion at the end of 2022.

This means investor lost Sh547 billion paper wealth in 2023.

For some investors, they cannot sell their shares because trading in those stocks was suspended. One such investor is Danstan Mugambi, the Secretary of Mumias Shareholders Forum. He invested in the shares of Mumias Sugar Company, which was at the time Kenya’s leading sugar miller.

The Capital Markets Authority (CMA) suspended the trading of Mumias shares in 2019 after the miller was paced under administration.

CMA has since then also suspended trading of shares of national carrier Kenya Airways (KQ).