A new report has revealed that most Kenyans living in cities have yet to feel the benefits of the country’s economic growth, with many saying their incomes have either remained unchanged or declined this year.
Rising living expenses and slow wage growth continue to squeeze households already struggling to make ends meet.
The quarterly Investor Pulse by ICEA Lion Group, which surveyed 1,000 urban consumers, shows a widening gap between the nation’s positive economic indicators and the daily financial realities faced by ordinary Kenyans.
While official data points to resilience in the broader economy, most respondents said they are battling stagnant earnings and higher expenses.
Many employees reported that salary cuts and higher taxes have reduced their take-home pay, as employers grapple with increased operational costs.
According to the report, Eldoret was the only city that recorded significant income growth between June and September, largely driven by gains in the agricultural sector.
Mombasa, on the other hand, saw the steepest drop in earnings. The city’s heavy dependence on tourism and import trade has made it vulnerable to market disruptions, leaving many workers and businesses struggling to recover.
More than half of urban residents across Kenya said their income levels had not changed compared to the same period last year, marking the longest stretch of stagnation reported in 2025.
At the same time, the cost of living continues to rise. One in three respondents said they were spending more this year than before, up from a quarter in the previous quarter. Official figures from the Central Bank of Kenya show inflation stood at 4.6 per cent in September 2025, slightly up from 4.5 per cent in August.
The study also shows growing inequality between income groups.
“Upper middle class and high income segments had the largest proportion of respondents recording better incomes over the past year, while the low income segment had most individuals indicating that their income was lower in the third quarter of 2025 compared to a similar period in 2024,” the report read.
Even so, there has been a small rise in savings, investments, and insurance uptake. Saccos, banks, and chamas remain the most trusted avenues for wealth building.
“There was a marginal improvement in the proportion of income allocated to savings, investments and insurance, with Saccos, commercial banks and chamas strengthening their grip on investments,” the report notes.
Retailers are also seeing signs of recovery. Over 60 per cent of businesses said sales were higher between June and September than in the same period last year, with Nakuru and Mombasa leading the rebound. The improvement was attributed to more shoppers visiting stores rather than price increases.
Analysts at ICEA Lion say the Central Bank’s recent decision to lower the benchmark lending rate to 9.25 per cent could stimulate credit access and spur growth. They also project that rising activity at the Nairobi Securities Exchange will continue attracting investors.
“Monetary easing amid stability creates a rare window for investors to anticipate value rather than chase it,” Gerald Gondo, chief investment officer at ICEA LION Group, said.
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