About 13.9 million Kenyans do not have any form of a retirement savings scheme. The majority of them are found in the informal sector and are living from hand-to-mouth which makes it difficult for them to save. Analysts say the country facing a future crisis.
“In the near future, the country is going to have so many retired old people with nothing to fall back to. We shall have poor retired people hence more strain on the available resources and social amenities. People are not saving,” said Clabe Wekesa.
Data from the Kenya National Bureau of Statistics (KNBS) showed that there were about 17.4 million people in the formal and informal sectors as of the year 2020. With the majority of the people being in the informal sector, there is little hope of saving.
“The labor market is skewed towards informal employment at 83 percent. This is a time bomb and indicates that most Kenyans will retire poor. We are likely to have so many old poor families in Kenya,” the report from KNBS said in part.
Retirement Benefits Authority (RBA) official Jackson Nguthu said that the current number of individuals actively contributing towards a retirement benefits program was approximately 3.5 million, which is just 25 percent of the labor force. “This is terrible news,” he said.
“Out of this number, approximately 800,000 contribute to both the National Social Security Fund (NSSF) and the private occupational and individual schemes, with 2.7 million contributing only to NSSF,” he added during a recent function.
President William Ruto of Kenya has been among a few leaders who have been screaming about the poor savings culture among Kenyans. The President has since pushed for the increase of contributions that go to the Nationa Social and Security Fund (NSSF) from the current 200 to 2000 shillings.
Kenyans, however, are against this move although the Supreme Court has since okayed it.