This archive report was first published on 18 November 2021.
Kenya's economy has been experiencing a significant downturn, with Kenyans cutting Sh53 billion from their savings in September 2021. This is according to the latest monetary statistics released by the Central Bank of Kenya (CBK).
The data shows that demand deposits, which are money saved in bank accounts but available for withdrawal on short notice, fell by Sh47 billion from Sh1.47 trillion in August to Sh1.42 trillion in September.
Long-term savings also fell by Sh4 billion to Sh1.63 trillion over the reference period. This is the biggest fall on a month-to-month basis since November last year, when the country was experiencing the third wave of the Covid-19 pandemic.
According to Ken Gichinga, chief economist at Mentoria Economics, the fall in savings is due to the packed education calendar, which has put pressure on parents to finance school requirements such as school fees and other expenses.
"Jobs have not recovered to pre-pandemic levels, and with the packed education calendar parents have been hit hard by school requirements such as school fees and other finances needed in school within a short time this has led to massive dissavings," Gichinga said.
However, Gichinga also noted that the phased reopening of the economy has led to investment opportunities opening up, causing Kenyans to invest in areas that promise better returns.
"With the phased reopening of the economy, investment opportunities have started opening up, as result Kenyans are going into their savings to invest in areas that promise better returns," Gichinga said.
