No respite despite State promises as Kenyans worse off than a year ago

As President William Ruto prepares to deliver his third State of the Nation Address before a joint sitting of Parliament on Thursday afternoon, his administration is under intense pressure to ease the financial burden on households.

This follows his 2022 pledges, which he renewed last year, to lower the cost of living, grow the economy, and create employment opportunities for the youth and the wider population.

This comes as Kenyans are ending 2025 significantly worse off than a year ago, with the cost of a basket of essential goods—from food to transport—having risen sharply, according to official government data.

The Kenya National Bureau of Statistics (KNBS) reports the annual consumer price inflation held steady at 4.6 per cent in October, the same rate as in September.

However, this headline figure masks a deeper, more painful reality for families.

An analysis by The Standard of the KNBS data shows that over the past 12 months, the prices of numerous daily essentials have surged, offering no respite to consumers.

The most severe pain has been in the food basket, a category that carries the heaviest weight in the consumer price index, eroding purchasing power and stretching budgets to breaking point.

The “Food and Non-Alcoholic Beverages” division recorded a punishing 8.0 per cent year-on-year increase.

Staple items saw dramatic jumps: the price of sugar skyrocketed by 22.6 per cent, while the cost of sifted maize flour and fortified maize flour—a national staple—rose by 16.4 per cent and 16.5 per cent respectively.

Tomatoes became 37.3 per cent more expensive, a crippling increase for a key ingredient in many local dishes.

The data also showed substantial annual increases for kale (15.4 per cent), cabbages (20.3 per cent), and onions (12.0 per cent).

“The price increase was primarily driven by a rise in prices of items in the Food and Non-Alcoholic Beverages (8.0 per cent); Transport (4.8 per cent); and Housing, Water, Electricity, Gas and Other Fuels (1.9 per cent) over the one-year period,” the KNBS report stated, noting these three categories account for over 57 per cent of household spending.

Beyond the supermarket, the cost of moving around has also climbed.

The “Transport” division saw a 4.8 per cent annual inflation rate.

While pump prices for petrol and diesel remained unchanged month-on-month, they were still 2.3 per cent higher than in October 2024.

The most staggering increase in this category was for local flights, with ticket prices soaring by 52.0 per cent over the year.

Housing and energy costs provided little relief.

Though the “Housing, Water, Electricity, Gas and Other Fuels” index rose by a more modest 1.9 per cent annually, the devil was in the details.

The cost of electricity for a 200 kWh consumption rose from Sh5,728.40 in October 2024 to Sh5,764.15 in October 2025.

Month-on-month, these charges saw a sharp rise of 3.0 per cent, indicating recent upward pressure.

The report also highlighted increases across a wide range of other goods and services, painting a picture of broad-based inflationary pressures.

Health costs rose 2.8 per cent over the year, while expenses for clothing and footwear (2.9 per cent) and alcoholic beverages and tobacco (3.1 per cent) also outpaced the headline inflation rate.

“Between September and October 2025… the price of spirits rose by 0.1 per cent, while cigarettes recorded a 0.4 per cent increase,” the report noted, showing that even non-essential discretionary spending was becoming more expensive.

The KNBS separates inflation into “core” and “non-core” components, with core inflation excluding volatile items such as food and energy.

In October 2025, core inflation eased to 2.7 per cent, but the more volatile non-core inflation, heavily influenced by food prices, accelerated to a worrying 9.9 per cent.

The contribution to the overall inflation figure was stark. “Core inflation contributed 2.8 points, while non-core inflation contributed 1.8 points to the overall inflation,” the bureau reported.

The “Food and Non-Alcoholic Beverages” category alone was responsible for 2.6 percentage points of the total 4.6 per cent inflation rate, underscoring its dominant role in the cost-of-living crisis.

While the month-on-month inflation rate was a minimal 0.2 per cent in October, this offers little comfort.

The slight decrease in the prices of some food items like maize flour and kale from September to October does little to offset the massive annual increases that have left families financially bruised.

With the festive season approaching, and as President Ruto makes his address today, Kenyan families will be hoping for lower prices as we head into next year.

However, the latest data confirms that, overall, Kenyans are worse off than they were just one year ago.

The relentless climb in the cost of living piles further pressure on Ruto’s government, which came to power promising to uplift the poor and curb economic hardship.

As essential commodity prices continue to outpace wage growth for many, the administration faces a mounting challenge to deliver on its pledge to lower the cost of living and provide tangible economic relief to millions of struggling households.

A September 2025 Market Perceptions Survey by the Central Bank of Kenya (CBK) found that while respondents expected a stable macroeconomic environment—including low inflation and a stable exchange rate—to support economic activity for the remainder of the year, they remained concerned about subdued demand as the government implements austerity measures, high cost of doing business, trade wars, and geopolitical tensions.

And while the cost of credit has been coming down as the CBK continues to lower the Central Bank Rate, bank respondents said they expected demand for credit to be tempered by reduced disposable incomes due to increased statutory levies affecting households and corporates’ demand for products.

At the same time, while both bank and non-bank respondents expected to hire more, there were concerns over reduced business volumes and declining profits, low consumer purchasing power, the need to reduce costs, high operational costs, high taxes and levies, and the need to leverage ICT and technology to reduce manual operations.

Other risks cited included concerns about increased taxation, high energy costs, high cost of doing business, and weak purchasing power, cited by construction and hospitality sector respondents, and the need to reduce costs and lower overheads, cited by trade and transport sector respondents.

Ruto has billed the affordable housing programme, the digital economy, and labour migration as sources of employment for the youth, but the quality and size of some of the initiatives has come under scrutiny.

A recent investigation conducted by a US publication says the labour migration programme, which Ruto has been marketing severally, only benefits firms owned by his family and well-connected individuals, even as those dispatched to countries such as Saudi Arabia suffer mistreatment and even death.

As Ruto marks over three years in office, he faces the dilemma of addressing the needs of Gen Zs, the country’s most educated population, whose opposition to higher taxation, high cost of living, and malgovernance nearly toppled his administration last year.

He even faced more pressure from the United Opposition, which is seeking to make him a one-term president by fronting a joint candidate against him.

Ruto is also making the address at a time Kenya is now spending more money to service its public debt than on education, health, and social protection combined, a new report shows, documenting a dramatic squeeze on public services that is hitting ordinary citizens hardest.

The report, titled “The People’s Audit: Reclaiming Kenya’s Fiscal Sovereignty” and produced by the Okoa Uchumi coalition of civil society groups, uses official data to track the fiscal trade-off.

It found that “debt service obligations now consume more than half of all revenues,” a figure that reached 52 per cent of government revenue in the 2023–24 financial year.

To put that in context, debt service refers to the regular payments a borrower makes to cover interest and principal on a loan.

This means for every Sh100 the Kenyan government collects, Sh52 is earmarked for creditors before any other public needs are funded.

The audit states this has created a stark inversion in national priorities: “debt service payments have exceeded total allocations to education and social protection combined.”

The report says the consequence is a severe contraction in funding for essential services.

It reveals that “real per capita spending on health and education declined by 22 per cent between 2019 and 2025.”

Real per capita spending is the amount of money spent per person, adjusted for inflation, indicating a significant drop in the actual resources available for each Kenyan’s education and healthcare.

This decline is occurring against a backdrop of rapidly accumulating debt. The report notes that Kenya’s total public debt expanded more than sixfold, from Sh1.5 trillion in 2010 to an estimated Sh11.81 trillion in 2025.

The human impact of these numbers is detailed in the audit. It notes that “shrinking social budgets have forced Kenyan hospitals to ration care” and that public schools “operate with inadequate capacity.”

The report argues that this fiscal strain is eroding the basic trust between citizens and the state. It says Kenyans feel burdened by taxes while seeing services deteriorate.

“The social contract is visibly fraying,” the audit states, “as citizens perceive the State fiscal system as existing only to serve creditors and elites, rather than the public good.”

This sentiment was captured in citizen testimonies included in the report, with one participant saying that taxation “feels like punishment for being poor.”

The Okoa Uchumi report sounds a clear alarm, drawing “uncomfortable parallels to Sri Lanka’s pre-crisis period,” a reference to the South Asian nation's 2022 economic collapse, which was also preceded by high debt and opaque borrowing.

The audit suggests that Kenya’s fiscal troubles are not merely a technical problem but a fundamental governance failure, where the government has, according to the report, become “a collector rather than a provider, a borrower without accountability, and a spender without transparency.”