'Side hustles are main lifeline for working class'

From left: Old Mutual Africa Head of Knowledge and Insights Vuyokazi Mabude, Group Chief Operations Officer Isaac Nzyoka and Group Managing Director Investment Anthony Mwithiga during the release of the second annual Old Mutual Financial Services Monitor results, on February 12, 2025. [Jonah Onyango, Standard] Almost half of employed Kenyans depend on their side hustles as the main source of living, a new survey shows, telling how stretched Kenyans' payslips are in the wake of new taxes. Findings contained in the 2024 Financial Services Monitor by Old Mutual show 47 per cent of working-class individuals depend on their side hustles as their main income. The findings show half, 50 per cent, of employees are also running a business on the side. They also show that 59 per cent of working Kenyans are worried about their job security. The report, in its second edition that covers 2024, shows less than three in 10 Kenyans are satisfied with their overall financial situation. The top reason is not having enough income. According to the survey conducted by Ipsos, 78 per cent of Kenyans reported either reduced or stagnated incomes over the year compared to 2023, which points to the need for side hustles. Of these, 34 per cent said they are earning just the same amount, 35 per cent are earning a bit less while nine per cent are making significantly less compared to 2023. "The struggle having enough income is evident as almost eight in 10 people are earning less or the same as a year ago. Spending power has been eroded," the study says. For the working class, who seem to have been affected more by the enhanced taxes enacted by President William Ruto's administration, side hustles, according to the survey, not only offer a lifeline but also job security in an economy that has seen several employers downscale or shut down operations altogether. The Affordable Housing Levy, at 1.5 per cent of gross income, the Social Health Insurance Fund (Shif) at 2.75 per cent and the enhanced National Social Security Fund (NSSF) contributions are the direct deductions that have dented pay slips of the working class. Additionally, President Ruto introduced two new tax bands of 32.5 per cent and 35 per cent targeting high income earners between Sh500,000 and Sh800,000. These deductions have significantly reduced the purchasing power of the working class with more contributions expected to go to NSSF starting this month. This partly explains why the survey shows the percentage of Kenyans who are financially stressed having gone up from nine per cent in 2023 to 14 per cent in the 2024 findings. Yet 2024 had good macro indicators such as reduced inflation, slowing interest rates, stable foreign exchange and the boon at the capital markets, according to Old Mutual Investment Group managing director Anthony Mwithiga. "That tells you 2024 was a paradox with very strong economic indicators but at household level, it was different socially for small businesses," Mwithiga said. He said household incomes, cost of living and that of credit have been under pressure. Nanzala Mwaura, Ipsos chief growth officer for Sub-Saharan Africa, noted the adjustments Kenyans are making in their spending as a result of income pressure with rent and education taking precedence in the latest findings. In 2023, business was top of the list. "Rent and education coming up I think is because of the income pressure,"Ms Mwaura said.

'Side hustles are main lifeline for working class'

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'Side hustles are main lifeline for working class'

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