Charity organisation Oxfam has just released a new study on inequality in Kenya—and its findings are chilling. The richest one percent of Kenyans now control 78 percent of the country’s financial wealth, from stocks and corporate equity to physical assets and securities.
Over the last decade, their fortunes have nearly doubled even as more than seven million Kenyans slipped into extreme poverty. Nearly half the population survives on less than Sh130 a day.
The report cuts through the political choreography that routinely buries honest debate about inequality under tired, rehearsed phrases. In Kenya, our policy elite treat inequality as something unfortunate but inevitable—never as a crisis demanding urgent intervention.
The Oxfam findings landed almost simultaneously with another striking data point from the Kenya Bankers Association: 36 banks contributed Sh194.81 billion in taxes in 2024, equivalent to 8.09 percent of all government revenues.
On the surface, this appears to be a good-news story—a profitable, compliant, well-organised sector dutifully supporting the Exchequer.
But beneath the headline lies a deeper, unsettling truth: the extreme concentration of prosperity in a handful of sectors while millions remain locked out of income generation altogether.
Safaricom, year after year, posts massive profits and correspondingly large tax remittances. Together, banking and telecommunications contribute well over 15 percent of all government revenue.
That is not the portrait of a healthy economy. It is the symptom of structural inequality—a system where the tax base rests on a narrow peak rather than a broad foundation.
A robust, resilient tax system draws revenue from a wide cross-section of the population. Kenya’s, instead, leans disproportionately on highly formalised institutions and a small professional elite, while a vast informal workforce remains effectively invisible to the taxman.
Of the banks’ total tax contribution, Sh94.69 billion is PAYE and withholding tax—money deducted directly from employees and suppliers, not corporate profits. These taxes flow from the small minority of Kenyans who enjoy formal, regular incomes.
This is neither about tax avoidance nor evasion. It is about income exclusion. Informal workers—hawkers, boda boda riders, casual labourers, market traders—do not earn enough, regularly adequate, or formally enough to be taxed.
Their absence from the tax register mirrors their absence from the income economy. Tax data is a mirror held up to society showing who earns, who doesn’t, and who is left out entirely.
Layered onto this is an even more troubling dynamic. Banks today are not just pillars of the tax system; they have quietly become the biggest financiers of government, courtesy of the state’s relentless and increasingly unsustainable borrowing binge.
Recent data shows that lending to government securities now delivers the largest share of bank profits, surpassing what they earn from lending to households or businesses.
This is the crowding out effect in its purest. Private borrowers—farmers, manufacturers, SMEs, startups—are shoved aside as banks funnel liquidity into high-yield, zero-hassle government paper. In Kenya today, the safest and most profitable loan you can make is to the state.
Make no mistake. Banks do not lend to the government out of patriotism. They lend because a government in fiscal distress is the most lucrative customer in town. But here lies the central contradiction—and the beating heart of Kenya’s inequality story.
The same banks minting record profits from government debt are also among the largest contributors to Paye and corporate tax revenue.
The government is borrowing expensively from banks with one hand and extracting taxes from those same banks with the other. This circular, fragile ecosystem keeps wealth flowing upwards, while ensuring that a tiny elite accumulate wealth.
The banking statistics describe a country where a small salaried elite funds government through Paye; a handful of profitable corporates anchor the tax base; and millions remain economically invisible—no payslip, no pension, no credit history, no tax record.
This is not sustainable. If 36 banks contribute eight percent of national revenue, the crisis is clear: Kenya is generating profits, not jobs; growth is being driven by capital-intensive sectors, not labour-intensive ones; and wealth is being created through financial intermediation and mobile money platforms rather than through manufacturing, agriculture or small businesses.
In such an economy, those on the inside prosper and shoulder the tax burden, while those on the outside neither earn nor pay—and remain excluded from prosperity itself.
The writer is a former Managing Editor for The EastAfrican.
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