Seven in 10 Kenyans do not support Ruto's new housing levy: Tifa poll
President William Ruto signing The Finance Bill to law at State House, Nairobi on Monday June 26.
What you need to know:
- While 69 percent of Kenyans say they do not support the levy, which will see 1.5 percent of a worker's gross salary deducted each month and a similar percentage matched by the employer, 54 percent said they believe they will "certainly not get a house" even if the deductions are made.
Seven out of 10 Kenyans oppose President William Ruto’s affordable housing programme funded from a housing levy, while more than half are certain that even if they contribute to it, they will still not get a house.
While 69 per cent of Kenyans say they do not support the levy, which will see 1.5 per cent of a worker’s gross salary deducted each month and a similar percentage matched by the employer, 54 per cent said they believe they will “definitely not get a house” even if the deductions are made.
These are some of the findings of a Trends and Insights for Africa (Tifa) survey conducted between June 24 and 30 among 1,530 respondents from across the country using computer-assisted telephone interviews.
The survey found that only 24 per cent of respondents said they support the levy, while seven per cent chose not to answer or give an opinion.
Similarly, only one in 10 Kenyans (11 per cent) say they believe they will get a house if they contribute to the scheme, while 15 per cent say they may or may not get, and 20 per cent chose not to give an opinion.
Removal of subsidies
At the same time, more than half of Kenyans rated what they considered to be the “worst” provisions in the Finance Act, with the doubling of the tax on all petroleum products from eight to 16 per cent leading by far in this category.
Others cited are the removal of subsidies on basic food items such as maize flour, the housing levy and other unspecified tax increases.
“Only a modest minority of Kenyans named a ‘best’ provision of the new budget when asked (21 per cent), with support for the education sector and the new housing programme the most frequently mentioned (four per cent each). In contrast, a clear majority named a provision they considered to be the 'worst' (56 per cent), with the tax on all petroleum products leading by far (24 per cent),” Tifa said.
The survey also shows that about 31 per cent of the unemployed in Kenya have never had a job, while eight per cent of the currently unemployed have previous work experience.
The majority of those in employment are self-employed, accounting for 29 per cent of the workforce, while only 11 per cent are in full-time employment.
However, the Tifa survey found that the combined number of people in the two highest monthly income brackets (Sh20,000 to Sh50,000, and over Sh50,000) is lower than the number of people with no income, 13 per cent compared to 38 per cent. As a result, a significant majority of Kenyans rely on low incomes for their livelihoods.
Lowest income category
Although there is a clear correlation between monthly income and the ability to save, it may not be as strong as expected. Around 28 per cent of people in the lowest income category say they are able to save, while twice as many in the highest income category (50 per cent) say they are able to save.
“Among the minority who are usually able to save, these funds are used for a variety of purposes, the three most common being general savings/investment accounts to earn interest (19 per cent), unexpected/emergency needs (16 per cent) and education costs (which are periodic rather than monthly),” said Dr Tom Wolf, Tifa lead analyst.
The research also shows a significant shift in cooking fuel use among Kenyans over the past six years. Most notably, the percentage of households using cooking gas has almost tripled from 13 per cent to 34 per cent.
Conversely, the proportion of households relying on paraffin has fallen significantly, from 14 per cent to just four per cent.
It remains uncertain whether the implementation of the VAT abolition will further boost the growth of Kenyan households relying primarily on cooking gas.
If the current trend continues, it is only a matter of time before cooking gas overtakes wood as the most commonly used cooking fuel.
Sh5,000 per month
“While wood remains the most commonly used cooking fuel (45 per cent), it is closely correlated with income, being mentioned by more than half of those earning less than Sh5,000 per month (60 per cent), but far less than cooking gas among those earning more than Sh50,000 (14 per cent versus 61 per cent). The use of charcoal, while favoured by a small minority of Kenyan households overall (16 per cent), does not reflect variations in monthly income,” said Dr Wolf.
The report suggests that while it might be assumed that the majority of rural dwellers rely heavily on their own land for food, and urban dwellers rely on convenience stores and markets for their daily food needs, the reality is quite different.
In fact, only about a third of rural residents (51 per cent) say they get most or all of their food from their farms, and a significant proportion (16 per cent) do not rely on their land for food at all.
“Just over a third of urban dwellers (38 per cent) get none of their food from private or family land. Although urban dwellers may incur transport costs to access home-grown produce (either by having it delivered or by travelling to their rural homes), these figures indicate the significant impact of food expenditure on the majority of Kenyans, particularly in light of recent inflationary pressures. It is worth noting that these statistics are influenced to some extent by current climatic conditions and the resulting harvests,” said Dr Wolf.
