Shocker for those who fled Nairobi's high cost of living

Thousands of people who fled Nairobi to satellite towns in order to beat overpopulation and the high cost of living, are realising that the same problems have followed them.

such as Kiserian, Kajiado, Kitengela and Thika

Of the 14 major urban centres in Kenya, seven — Ruiru, Kikuyu, Thika, Karuri, Ongata Rongai, Juja and Kitengela — that are all closest to Nairobi had a combined population of over 1.74 million in 2019.

People seeking to escape from high rents, population pressure, traffic jams and rising food prices sought shelter in satellite towns such as Kiserian, Kajiado, Kitengela and Thika where the cost of living was relatively low.

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Nairobi’s middle-income class—households spending between Sh46,355 to Sh184,394 each month—have been flocking satellite towns where they buy land and put up houses.

They have been joined by the city's upper-income class—those spending Sh184,395 or more every month—who are building rental houses as the areas open up thanks to infrastructure such as roads, markets and commercial centres.

"The emerging importance of small and medium-size urban centres has reduced Nairobi’s dominance in the urban hierarchy,” says the Kenya National Bureau of Statistics (KNBS).

But there is a creeping sense of déjà vu as what started as a good thing has given birth to the very problems the former city dwellers were trying to escape.

KNBS data shows that urban areas outside Nairobi last year overtook the capital city to become the places with highest cost of living for the first time in seven years. Inflation rate for people in urban areas outside Nairobi averaged 6.7 per cent last year compared to the national average of 6.1 per cent.

This marked the first time since 2014 that the cost of living in urban areas outside Nairobi beat that of the city's lower-income dwellers—a bracket that is often used to gauge inflation for urban residents. This inflation jump comes at a time the KNBS findings show that the number of urban dwellers jumped from 12 million in 2009 to 14.8 million in 2019.

The number of urban towns during this period increased from 230 to 372 as the population bulge and unemployment forced people out of their comfort zones. From a growth rate of 12.2 per cent between 1962 and 1969, Nairobi’s population growth has slowed, according to census results, to 3.5 per cent between 2009 and 2019—the slowest ever growth rate.

KNBS says that there has been substantial population growth in urban centres surrounding the city, including Kiambu, Kajiado, Kiserian, Kitengela, Ngong, Ongata Rongai, Mlolongo, Kangundo, Isinya, Oldonyo Sabuk and Athi River.

Other towns now classified under Nairobi region that have experienced a population bulge are Githiga, Githunguri, Ikinu, Juja, Karuri, Kawaida, Kikuyu, Limuru, Ngewa, Rironi, Ruiru, Thika, Ting’ang’a, Githunguri, Kathiani, Machakos, Makutano, Nguluni, Tala, Murang'a and Salama.

While Nairobi had a population of 3.5 million people in 2019, KNBS says the population of the city and surrounding towns was seven million people.

Ken Gichinga, the chief economist at Mentoria Economics, says the continued migration of people from Nairobi to satellite towns has led to demand pull inflation—upward pressure on prices due to shortage of goods and services.

“A critical population has moved to satellite areas and transformed the many once backwater areas. Towns such as Kiserian, Kajiado, Kitengela, Ngong and Thika have become part of the city (Nairobi) and people are spending there,” says Gichinga.

“It is telling us there has been migration from the city to satellite towns and people are spending money there, and that is why we are starting to see prices going up. Ngong, for instance, has seen appreciation in real estate in the last few years.”

Ongata Rongai has the highest concentration of graduates among the major urban centres, with 10.5 per cent of the population having completed university.

This is followed by Kikuyu (9.3 per cent), Juja (nine per cent), Nairobi City (8.8 per cent), Ruiru (8.8 per cent), Karuri (8.4 per cent) and Kitengela (8.3 per cent). The rising cost of living in these once sleepy towns has dealt a blow to thousands who do not have jobs. Kitengela leads with 13.7 per cent of the population jobless by 2019. This is higher than the 11.4 per cent in the city. Other towns with high unemployment are Ongata Rongai (10.8 per cent), Juja (10.2 per cent), Karuri (10.1 per cent) and Ruiru (9.6 per cent).

Cost of living pressures appear set to go beyond Nairobi given that inter-county migrations continues to happen. A KNBS report on migration showed Nairobi, Kisumu, Nakuru, Kiambu, Uasin Gishu, Kajiado, Machakos and Mombasa are preferred destination counties, with numbers above 100,000.

While Nairobi leads with 641,817, it is followed by Kiambu (319,153), Nakuru (241,350), Mombasa (170,309), Kajiado (139,996), Uasin Gishu (130,279), Machakos (128,767) and Kisumu (103,774). At 6.7 per cent, the cost of living in urban areas outside Nairobi in 2021, is a rise from 5.9 per cent in 2020 and the highest since 2017 (8.2 per cent), according to the Economic Survey.

The increased inflation came in the period that Nairobi’s lower-income group—households that were spending Sh46,355 or less per month in February 2016—enjoyed a reprieve. 

“In 2021, the rest of urban areas and Nairobi lower-income group recorded the highest annual inflation rates of 6.7 per cent and 6.0 per cent respectively,” says KNBS in the Economic Survey.

The lower-income group, which makes up 70.89 per cent of city households, saw their inflation ease from 6.2 per cent to six per cent— only beaten by 5.3 per cent in 2019.

But the middle class saw their cost of living jump from 2.6 per cent to 4.2 per cent even as those classified as Nairobi’s upper class experienced a four per cent inflation compared with 2.6 per cent in 2020.