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Page 1 of 16 Nairobi, Kenya 25th April 2015 Ipsos’ 1 st Quarter SPEC (Social, Political, Economic and Cultural) Survey: Third Media Release The Kenyan Economy: Perceptions and Realities Poverty remains a huge challenge for a significant number of Kenyans. Deprivation in terms of household-hunger and locality famine and poverty shows high regional disparities. While nearly all Kenyans have noticed the drop in the price of petroleum products over the last half-year or so, only half say this has given them any material benefit. The gap between those households whose economic condition has “worsened” and “improved” over the last three months has increased, and even among Jubilee supporters, far more households are in the former category than in the latter. Almost twice as many Kenyans says the country is headed in the “wrong” as opposed to the “right direction”, but (as expected), there is a marked contrast between Jubilee and CORD supporters on this issue; overall, however, the figures are little changed from the previous survey. Survey details Ipsos conducted its first quarterly SPEC survey during the period of 28th March to 7th April 2015. Our first media release, on 17th April, included findings related to: (1) corruption, (2) the al-Shabaab threat, and (3) the digital migration. Our second media release of 22 nd April focused on issues related to devolution and constitutional reform. In this release, we present several findings related to the economy. Underpinning the specific findings is the general reality that three-quarters of all Kenyan households (75%) report a total family income of Shs. 25,000 or less, with more than half of these households (44%) earning between nothing and only Shs. 10,000 (a figure which increases to 46% if those who declined/were unable to answer this question are excluded). In addition, as is seen in several of the specific findings show below, such extensive poverty takes a clear regional dimension. For example, the proportion of those in the Shs. 10,000 and below category is 56% at the Coast compared to 56% in Nairobi, more than twice. At the same time, these income-group findings over all three Ipsos surveys since May, 2014 show no statistical change, reflecting both the static nature of income-distribution in Kenya, and the reliability of Ipsos’ survey methodology. Main Problem Facing Kenya, Fuel Price Drop Main Problem Facing Kenya As was the case over past surveys, economic concerns are foremost in Kenyans’ minds when asked to identify the main challenge (in a single response) the country now faces. Aside from the governance ill, corruption (19%) which is recognized as having direct economic consequences, the issues of the high cost of living (26%) and unemployment (16%) receive most mentions. (Note that 18% of all respondents in this survey identified themselves as currently jobless, with another 7% as casual workers.) At the same time,

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Page 1: The Kenyan Economy: Perceptions and Realities

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Nairobi, Kenya

25th April 2015

Ipsos’ 1st Quarter SPEC (Social, Political, Economic and Cultural) Survey:

Third Media Release

The Kenyan Economy: Perceptions and Realities Poverty remains a huge challenge for a significant number of Kenyans.

Deprivation in terms of household-hunger and locality famine and poverty shows high regional disparities.

While nearly all Kenyans have noticed the drop in the price of petroleum products over the last half-year or so, only half say this has given them any material benefit.

The gap between those households whose economic condition has “worsened” and “improved” over the last three months has increased, and even among Jubilee supporters, far more households are in the former category than in the latter.

Almost twice as many Kenyans says the country is headed in the “wrong” as opposed to the “right direction”, but (as expected), there is a marked contrast between Jubilee and CORD supporters on this issue; overall, however, the figures are little changed from the previous survey.

Survey details Ipsos conducted its first quarterly SPEC survey during the period of 28th March to 7th April 2015. Our first media release, on 17th April, included findings related to: (1) corruption, (2) the al-Shabaab threat, and (3) the digital migration. Our second media release of 22nd April focused on issues related to devolution and constitutional reform.

In this release, we present several findings related to the economy. Underpinning the specific findings is the general reality that three-quarters of all Kenyan households (75%) report a total family income of Shs. 25,000 or less, with more than half of these households (44%) earning between nothing and only Shs. 10,000 (a figure which increases to 46% if those who declined/were unable to answer this question are excluded). In addition, as is seen in several of the specific findings show below, such extensive poverty takes a clear regional dimension. For example, the proportion of those in the Shs. 10,000 and below category is 56% at the Coast compared to 56% in Nairobi, more than twice.

At the same time, these income-group findings over all three Ipsos surveys since May, 2014 show no statistical change, reflecting both the static nature of income-distribution in Kenya, and the reliability of Ipsos’ survey methodology.

Main Problem Facing Kenya, Fuel Price Drop Main Problem Facing Kenya As was the case over past surveys, economic concerns are foremost in Kenyans’ minds when asked to identify the main challenge (in a single response) the country now faces. Aside from the governance ill, corruption (19%) which is recognized as having direct economic consequences, the issues of the high cost of living (26%) and unemployment (16%) receive most mentions. (Note that 18% of all respondents in this survey identified themselves as currently jobless, with another 7% as casual workers.) At the same time,

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various other ills mentioned are essentially part of the same reality: hunger/drought (11%) and the rich-poor gap (5%).

Also of note is the striking contrast in reasons offered for why the country is heading in the “wrong direction” obtained before and after 2nd April, (the date of the tragic Garissa al-Shabaab attack). Prior to this date, not even 1% mentioned terrorism, but this sky-rocketed among the 452 respondents interviewed thereafter to more than one-in-ten (11%). Also striking in this survey is the absence of any significant contrasts between supporters of the two main coalitions. Aside from a modest gap in terms of mentions for the high cost of living/inflation between them (9% more for those of CORD), which reflects especially the lower level of economic deprivation in the Central region (one of Jubilee’s two main bastions).

“What would you say is the most serious problem facing Kenya today?” Single Response (By Total)

26%

19%

16%

11%

11%

5%

3%

3%

2%

1%

1%

0% 10% 20% 30% 40% 50%

High cost of living/inflation

Corruption

Unemployment

Insecurity (5%)/Terrorism (6%)

Hunger/Drought

Poverty/Rich-Poor gap

Poor leadership

Crime

Tribalism/Ethnic Tensions

Lack of proper education

None

Base: All Respondents, (n=1,964)

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In terms of the trend over the last four years, little change is apparent, aside from the return to largely constant balance between the three most frequently mentioned problems (high cost of living, unemployment, and insecurity), given that the concern with insecurity that had rose dramatically following the terrorist attacks late last year had declined considerably by March this year (keeping in mind only about 25% of the interviews conducted in this survey occurred after the tragic attack in Garissa).

“Generally, what would you say is the most serious problem facing Kenya today?” (By Total, Supporters of Main Political Parties/Coalitions)

Problem

Total

(1,964)

Jubilee Supporters

(n=867)

CORD Supporters

(n=623)

%

Difference

High cost of

living/inflation 26% 23% 32% +9%

Unemployment 16% 16% 16% 0%

Insecurity/Terrorism 11% 11% 10% -1%

Hunger/Drought 11% 10% 9% -1%

Corruption 19% 22% 18% -4%

Crime 3% 3% 3% 0%

Poverty/Rich-Poor Gap 5% 5% 6% +1%

Poor Leadership 3% 3% 3% 0%

Tribalism 2% 2% 2% 0%

Poor Infrastructure 0% 1% 0% -1%

None 1% 1% 1% 0%

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However, there is one dramatic change in the distribution of responses on this issue: the dramatic increase in those mentioning corruption: a three-fold increase since Ipsos’ most recent survey in December, 2014 (from 6% to 19%). Whether this reflects a behavioural reality, or rather, heightened media attention through current anti-corruption efforts, is unclear.

“What would you say is the most serious problem facing Kenya today?” – Trend Analysis (Top 3 mentions, Single Response)

57%

68% 69% 70%

45%

39%

54%56%

50%

38%33% 33%

7%

26%19%

8% 7% 9%

19%

13%

21%

14%19%

13%

15% 16%

5%

16%

2% 1% 2%3%

4%12%

7%

10% 8%

20%

13%18%

67%

14%

0%

20%

40%

60%

80%

100%

High cost of living Unemployment Crime/Insecurity/Terrorism

Apr-11 Jun-11 Oct-11 Dec-11 Mar-12 Nov-12 Jun-13 Nov-13 Jan-14 Apr-14 Sep-14 Nov-14 Dec-14 Mar-15

*12.05% *14.49% *18.91% *18.93% *15.61% *3.25% *4.91% *7.36% 7.21%* 6.41% 8.36% 6.09% 6.02% 6.31%

*Inflation:

Source -

KNBS

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Awareness and Impact of Fuel Price Drop (and Subsequent Slight Rise) The vast majority of Kenyans (80%) are aware that there was “any change” in the price of petroleum products that has occurred over the last six months or so, with almost all of them having seen either an overall decrease (61%) or a major decrease followed by a more recent increase (37%). However, only about half of all these respondents (51%) report that such an apparently beneficial price change has made their lives any easier, whether in terms of greater savings (65%) and or extra expenditure (49%).

“What would you say is the most serious problem facing Kenya today?” – Trend Analysis for Corruption, Single Mention

6%

10%

3%

7%

13%14%

4%7% 8%

10% 8% 8%6%

19%

0%

10%

20%

30%

40%

50%

Corruption

Jubilee Government Grand Coalition Government

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Hunger, Famine and Poverty Prevalence of Hunger in the Household Asked whether everyone in their family “gets enough food to eat every day”, two in every five (43%) respondents (households) stated that they do not. In terms of this measure of deprivation, Nyanza again leads (52%), though even in Central, the most agriculturally-productive region, a full one-third (33%) are likewise affected. On a related issue of having any household members who “ever go to sleep hungry”, over one-third (38%) report this to be the case. For this measure, the highest proportion is at the Coast (61%) followed by Nyanza (50%); once again, Central has the lowest level of food-deficit (16%).

YES, 51%NO, 48%

DK, 2%

Base: Those saying that the drop in the price

of kerosene, petrol or diesel has changed their

life in any way (n=782)

Reported Impact of Change in the Prices of Kerosene, Petrol and Diesel

“Has this reduction in the price of

kerosene/petrol changed your life in any way?”

“In what way(s)?”

Base: Those saying that they are aware of

changes in the price of kerosene, petrol or

diesel (n=1,569)

65%

49%

0% 20%40%60%80%100%

Saving more

Able to spend moreon other things

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At the community level, three-out of five (58%) stated that people in their locality have suffered from famine in the past one year, while nearly half (48%) believe it will affect at least some members of their community within the next 12 months. Regionally, the same general pattern as that for hunger appears where a wide range exists between a high in Nyanza (67%) and a low in Central (26%).

“Does anyone in your household ever go to sleep hungry?” / “Does everyone in your household always get enough to eat?” By Total, Region

Base: All Respondents (n=1,964)

38%

61%

50% 49%

43%

35%33% 32%

16%

43%45%

52%

41%39%

43% 44%

49%

33%

0%

20%

40%

60%

80%

Total(n=1,964)

Coast(n=173)

Nyanza(n=257)

NorthEastern(n=94)

Eastern(n=293)

Western(n=200)

Rift Valley(484)

Nairobi(n=206)

Central(n=257)

1st Question: "YES" 2nd Question: "NO"

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It remains unclear, however, how much of such past experience with and future expectations of localized famine (or with hunger in general) is a consequence of food-production conditions (climate, soils, security, etc.) affecting particular areas as a whole, and how much is, the economic situation of particular households in terms of such factors as size of land-holdings, receipt of remunerations from members in wage-employment, and so on.

Prevalence of Poverty in the Locality, and Reduction Measures On poverty in their area/locality, nearly eight-in-ten Kenyans (78%) report its existence, with the same general pattern as noted above: highest in Nyanza (91%), followed by Coast and Western, (89% and 87%, respectively) and lowest in Central, though even there, more than half (56%) attest to its presence.

Any Past Experience/Expectations of Local Famine: by Total, Region

Base: All Respondents (n=1,964)

58%

78%

74%

67%64%

62%

49% 48%

36%

48%

54%

67%

55%

49%

41%

48%

44%

26%

0%

20%

40%

60%

80%

100%

Total(n=1,964)

Eastern(n=293)

Nyanza(n=257)

Coast(n=173)

NorthEastern(n=94)

Western(n=200)

Rift Valley(n=494)

Nairobi(n=206)

Central(n=257)

In The Last One Year In The Next 12 Months

% Saying “YES”

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Asked to suggest measures that would be most effective in reducing poverty in their localities, most frequently mentioned is job-creation (52%). Additionally, there just over one-third (36%) mentions calling for support to agriculture/livestock development and one-quarter (27%) for infrastructural development. These are followed by the expansion/improvement of education (20%), though various governance measures (reducing corruption, improving leadership and security) were also noted.

“Is there any poverty in your locality?”: by Total, Region

Base: All Respondents (n=1,964)

78%

91%89%

87%84%

76% 76%

60%56%

0%

20%

40%

60%

80%

100%

Total(n=1,964)

Nyanza(n=257)

Coast(n=173)

Western(n=200)

Eastern(n=293)

Nairobi(n=206)

Rift Valley(n=484)

NorthEastern(n=94)

Central(n=257)

% Saying “YES”

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Policy-makers and development analysts – as well as ordinary citizens – will need to scrutinize such findings to identify which responsibilities are assumed by county vs. national government, or shared between both. Findings released earlier by Ipsos have shown that devolution has overwhelming support of Kenyans; county governments are therefore likely to experience more, the pressure to have poverty reduction strategies.

In their 2015 Gates Annual Letter, the second bet by Bill and Melinda Gates is on farming. They state that “Africa will be able to feed itself”. Their letter notes that, “seven out of ten people living in sub-Saharan Africa are farmers. (Compare that to the United States, where the ratio is two out of a hundred.) And yet Africa has to rely on imports and food aid to feed itself. Though it is the poorest continent in the world, it spends about $50 billion a year buying food from rich countries. This is in part because African farmers get just a fraction of the yields that American farmers get. For example, the average maize yield in Africa is about 30 bushels. In the United States, it’s more than five times that.”

Their letter notes the solution to Africa feeding itself is in “innovations in farming: better

fertilizer and crops that are more productive, nutritious, and drought - and disease- resistant

could see doubling in yields for African farmers. Improving agriculture, the backbone of the

African economy, can drive massive poverty reduction and improve life across the continent”

It concludes.

“What are main things that could be done to reduce poverty in your locality?” by Total

52%

36%

27%

20%

12%

7%

6%

4%

4%

3%

1%

0% 20% 40% 60% 80% 100%

Employment opportunities

Agriculture/livestock

Infrastructure (roads, water, electricity)

Education

Governance (anti-corruption, policies, goodleadership, constitutional implementation etc.)

Security

Human health

Reduce the cost of living

Donation by Government/NGO to the needy

Family planning

Youth/women empowerment

Base: Those stating that there is poverty

in their locality (n=1,533)

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Changes in Households’ Economic Position, and Kenya’s Direction The above findings may be summarized by comparing the results for the five issues explored.

Change in Household Economic Position Over the Last 3 Months As in the recent past, far more Kenyan households have fared worse than better over the last three months. In terms of the partisan split between Jubilee and CORD supporters, a clear difference is found between them. Nearly twice as many (27%) of Jubilee supporters report that their households’ economic condition has “improved” over this period compared to CORD supporters (15%). In terms of worsening, 44% of Jubilee supporters state that economic conditions in their households have deteriorated, though considerably fewer than CORD supporters, among whom over half (57%) say this has been the case.

Poverty and Famine

78%

58%

48%

43%

38%

0% 20% 40% 60% 80% 100%

% saying that there is poverty in theirarea/locality

% saying that people in their localityhave suffered from famine in the past

one year (58%)

% saying that they think there will befamine in their locality within the next

12 months

% saying that they or everyone in theirfamily don't get enough food to eat

every day

% saying they or someone in theirhousehold ever goes to sleep at night

hungry (for the lack of food)

Base: All Respondents (n=1,964)

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What is disturbing, however, is that the narrowing between the “getting-better” and “getting-worse” over the last six months of 2014 (from a gap of 40% in May to just 15% in November) has been reversed, with it now having increased significantly (to 26%).

Change in Household Condition Over the Last 3 Months:by Total, Supporters of the Main Political Parties/Coalitions

Base: All Respondents (n=1,964)

22%

15%

27%

48%

57%

44%

29%27%

29%

1% 1% 1%0%

20%

40%

60%

80%

Total (n=1,964) CORD Supporters (n=623) Jubilee Supporters (n=867)

Improved Worsened Stayed the same Not sure

“During the last three months, have the general economic conditions for you and your family…?” – Trend Analysis

16%20%

17% 19% 21%

26% 22%

49%

60%56%

59%

52%

41%

48%

34%

19%

26%21%

26% 31% 29%

1% 1% 1% 1% 1% 2% 1%

June 2013 Nov. 2013 Feb. 2014 May 2014 Sept. 2014 Nov. 2014 Apr. 2015

Improved Worsened Stayed the same Not Sure/NR

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Such findings raise the important question about the extent to which the policies pursued by the leadership of these competing coalitions and of the political parties that comprise them overlap or contrast with each other in terms of the needs of the vast majorities of their respective supporters, which applies especially to Jubilee, given its occupation of the Executive and domination of the national legislature. At the same time, the fact that control of the counties is nearly evenly split between the two main coalitions raises another question: is there any visible difference between them in the policies pursued at this level?

Kenya’s Direction: Right or Wrong – and Reasons Overall, twice as many Kenyans (52%) feel the country is moving in “the wrong direction” than those saying it is headed in the “the right direction” (29%).

This issue was explored further by comparing the reasons given by each of these two respondent- groupings. At first glance, the data seem to constitute a case of the glass being ‘half-full’ vs. ‘half-empty’, with the same reason or issue often being cited by both groups. For example, many of both cite “the economy” (in its various aspects), although fifty percent fewer of those with a positive view of the country’s trajectory do so as those with a negative view (41% vs. 61%). An even greater gap applies to the governance ill of corruption, with more than twice as many ‘Kenya pessimists’ seeing it in negative terms as do the ‘Kenya optimists’ (19% vs. 8%).

“In your opinion, are things in Kenya generally going in the right or the wrong direction?” (By Total, Political Party/Coalition Alignment)

29%

52%

12%

7%

13%

74%

8%5%

41%

35%

14%

9%

0%

20%

40%

60%

80%

100%

Right Direction Wrong Direction Neither Right NorWrong Direction

Not Sure

Total (n=1,964) CORD Supporters (n=622) Jubilee Supporters (n=867)

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It is also of note that several reasons offered by one group do not appear in the list derived from the other, such as education by the optimists (6%) and terrorism (3%) by the pessimists.

The question arises here as to what determines the split between these two categories: actual personal/household economic condition, or political alignment (even if there is clearly some overlap between these two factors, as shown above).

What emerges here is that even if fewer than half of Jubilee supporters (41%) perceive the country as moving in the “right direction”, this is still more than three times more than the proportion of CORD supporters with this opinion (just 13%). Conversely, more than twice as many of the latter feel the country is moving in the “wrong direction” as those holding this view among Jubilee backers (74% vs. 35%).

In terms of the long-term trend on this issue, the results of this survey are little changed from November last year, aside from the slight decline in the proportion in those holding the positive (“right direction”) view, though those holding the middle position (“neither right nor wrong direction”) continues to increase (now at 19%, up from just 16% in November, 2013).

Reasons for saying the Country is headed in the right or wrong direction

41%

18%

11%

8%

6%

5%

2%

2%

2%

1%

1%

3%

0% 10% 20% 30% 40% 50%

Improved economy (cost of living,employment opportunities etc.)

Infrastructure

Good leadership

Fighting corruption

Improving education services

Tackling insecurity/crime/terrorism

Hunger/drought interventions

Health services

Implementing the Constitution

Good relations with developmentpartners

Reduced ethnic tensions

No specific reason

61%

19%

8%

8%

2%

1%

1%

1%

0% 20% 40% 60% 80%100%

Economic issues (Highcost of living,

unemployment etc.)

Increase in corruptioncases

Insecurity/Crime/Terrorism failures

Poor leadership

Poor/Lack of interventionson hunger/drought

Infrastructure

Tribalism/Ethnic tensions

Violation of human Rights

Base: Those saying that the country is headed in right

direction (n=565)

Base: Those saying that the country is headed in

wrong direction (n=990)

Wrong Direction Right Direction

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Future surveys will reveal whether such trends captured in this survey continue, based on the impact of national and county-level policies, as well as other relevant factors, some of which are undoubtedly beyond human control.

Another key finding (not shown above), however, is that only a small minority of households (10%) are reported of having “anyone” who filed a tax return with the Kenya Revenue Authority (KRA) last year. (An identical figure was obtained in Ipsos’ November, 2014 survey.) This figure alone suggests how difficult it is for government (national or county) to address all of the public’s needs this survey has revealed when the overall tax base is so low. Altogether, however, these survey findings raise the question as to what extent developing political trends reflect changing national and local economic realities, as opposed to more immutable attachments and alignments based on ethnic and other forms of communal identity, or even public relations efforts and (eventually) election campaign strategies.

“On the whole, thinking about Kenya today, are things generally going in the right or wrong direction?” – Trend Analysis

29% 30%26%

29%32%

29%

64% 62% 60% 58%

52% 52%

7% 7%

13% 14% 16%19%

Nov. 2013 Feb. 2014 May 2014 Sept. 2014 Nov. 2014 Apr. 2015

Right Direction Wrong Direction Neither Right Nor Wrong/Not Sure

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Survey Methodology The target population for this survey was Kenyans aged 18 years and above, of whom 1,964 living in urban and rural areas were interviewed. The margin-of-error attributed to sampling and other random effects of this poll’s sample size is +/- 2.2 with a 95% confidence level. The fieldwork for this survey was conducted between 28th March and 7th April 2015. Data was collected through face-to-face interviews using hand held devices (smart phones). Ipsos Limited (Kenya) funded the survey. For further details on this press release please contact: Dr. Tom Wolf Victor Rateng Research Analyst Opinion Polls Project Manager [email protected] [email protected] Tel: 386 2721-33 Tel: 386 2721-33 www.ipsos.co.ke www.ipsos.co.ke