Why Kenya's middle class could be shrinking fast

If there is a section of society that has been demonised whenever there is social unrest, it is the middle class – or anyone perceived to belong to this category.

The 2024 Gen Z protests amplified this public execution founded on classism, reducing the middle class’s participation in the June 25 bloodbath, Kenya’s new-age economic revolution, to that of keyboard warriors.

They were branded cowards, and the label has remained ever since.

“Shida hii Kenya ni middle class (the middle class is Kenya's biggest problem),” writes one social media user, @WillieOeba. “Those who are paying three times as much to access matatu services to work. I know the economy is bad, but solidarity is a strategy.”

But in the middle of this discussion, some question whether Kenya indeed has a middle class.

“There is no real middle class in Kenya. We are all one disease or accident away from poverty,” chimes @Dr_AustinOmondi.

From available data, the perceived middle class might have been judged harshly or too early.

Latest research from the World Bank, Worldpanel by Numerator, and the Kenya National Bureau of Statistics (KNBS) speaks of growing poverty levels and the telltale signs that Kenya’s middle-class society is indeed shrinking.

The 2026 Economic Survey Report by KNBS, released in April, shows that real wages had been declining in the years leading up to 2025, highlighting how workers’ incomes struggled to keep pace with rising prices.

In June this year, research by Worldpanel by Numerator showed that many shoppers are now making more frequent trips to retail stores, with their spending shifting towards the kadogo economy rather than bulk purchases.

Dr Patrick Muinde, an economist, likens this to a shrinking middle class. He says this is the section of society whose success denotes economic growth.

“Across most economies and development metrics, the middle class are normally the ones who frequent supermarkets and shopping malls. And within any economy, that is the best population for driving growth,” he says.

“The fact that we are seeing people shifting to more localised shops or mini-supermarkets within their residences is also an indication of the shrinking or declining middle class.”

But the signs have been there all along.

He cites subsequent economic surveys, saying they have consistently, for more than a decade, put the informal sector workforce at a higher percentage, 83 per cent, compared to the formal sector's 17 per cent. This means more people make a living through daily or weekly wages.

In 2025, of the 21.6 million workers, 18.1 million were in the informal sector. Even for those in the formal sector, he points out that 75 per cent still earn less than Sh50,000 a month.

“That is low income if someone is living in an urban setting like Nairobi, Mombasa, and other cities,” he says.

The World Bank points this out in its latest update on the Kenyan economy.

It notes that while employment growth remained strong in 2025, most jobs are still being created in the informal sector.

The Bank adds that after several years of continuous decline, real average earnings grew by two per cent overall, with wages in the formal private sector increasing by 3.9 per cent during the period.

However, despite these labour market and earnings improvements, the conflict in the Middle East affected households, including the most vulnerable.

Microsimulation estimates by the Bretton Woods institution suggest that the poverty rate (measured at Sh390 or $3, the international poverty line) could be two to 4.5 percentage points higher in 2026.

This depends on how much businesses pass the rising cost of fuel on to consumers.

“This implies that an additional one million to 2.4 million Kenyans are falling below the poverty line, with urban households expected to be more affected,” reads the Kenya Economic Update.

The middle class is at greater risk of these price shocks, as indicated in the 2026 Economic Survey.

“Across income groups, households in Nairobi’s middle-income group recorded the highest inflation at 4.9 per cent, compared to 3.8 per cent for the rest of urban areas,” says KNBS in the report.

According to KNBS, a middle-income household in Nairobi is one that spends between Sh46,356 and Sh184,394 per month.

Besides tough economic times, which of late are being blamed on fuel prices, another reason this population has less to spend on luxuries or bulk shopping is the government's reluctance to improve public services such as schools and hospitals.

“Quite a number of people within the middle class and those other income brackets, if they do not find public schools capable of providing quality education to their children, might see them shifting towards academies, and that normally takes part of their budget,” says Muinde.

“This could lead to erosion of purchasing power among the middle class.”

The Worldpanel by Numerator study, for its part, notes that after several turbulent years characterised by macroeconomic pressures spilling over into the Kenyan economy, consumers have become more cautious.

Consequently, growth in the retail space, which is largely driven by the middle class, is not because of increased spending but because of changing behaviour.

“Consumers are shopping more often, planning more deliberately and stretching every shilling,” the research says.

Yet in the same economy, facing similar challenges, the outlook of ordinary Kenyans and the super-rich is worlds apart.

The latest Wealth and Investment Trends Report by real estate consultancy Knight Frank Kenya paints a picture of optimism among dollar millionaires.

According to the report, more than half (54 per cent) of respondents expect a marginal increase in wealth during 2026, while a further 25 per cent anticipate significant wealth growth exceeding 10 per cent.

In contrast, only four per cent expect their wealth to decline marginally, while just eight per cent foresee a significant reduction, underscoring relatively limited downside expectations despite prevailing global and domestic uncertainties.

The report collected views from wealth managers of Kenya’s US dollar millionaires.

These individuals see Kenya’s economy as resilient, partly supported by macroeconomic stability.

“Since mid-2024, the Kenyan shilling has remained broadly stable at approximately Sh129 against the US dollar, supported by robust diaspora remittances, record-high foreign exchange reserves, and increased capital inflows from recent Eurobond issuances,” the report says.

“This stability has helped ease imported inflationary pressures, improve business predictability, and restore investor confidence across key sectors of the economy.”

According to Mark Dunford, Knight Frank Kenya's chief executive, the super-rich and the rest of the population view the economy through different lenses.

“A lot of the markets are feeling the pinch, and the average spend on the basket has gone down. But at the top end of the market, they might be using an extra Sh100 or a couple more, and that does not really affect them,” he explains.

He points to the level of infrastructure development completed over the last four years, citing the Nairobi Expressway and the GTC mixed-use complex as examples of how the wealthy perceive the economy.

“If you think about it from that macro perspective, there is growth in this market,” he says.