Economic classes have and will always be a tick for me however, me and math (that of x, y, beta, alpha kind of thing) have always been like water and paraffin that I always ask “where I am going to use this beta in life anyway?” No one has given me the answer yet. That is a see-saw right there.
When it was announced that the Kenyan shilling was weakening against the strengthening of the US Dollar, I have been waiting for it to stabilize but the wrath of our economy cannot even allow it. Lately, when am shopping the discipline instilled in me by the falling currency, only my budget knows better! The prices are slowly rising. The last time we hit the 100 mark was 4 years ago, 2011. Did we adopt the right strategies? If we did, how come 4 years down the line we back at it again? How did it all start?
The Kenyan culture as I have come to know love importing all the goodies from corner A-Z. We have not really come to terms with exploiting our resources efficiently and be our own markets and brands. Imbalanced trade has been creating the deficit. Exporting tea, coffee, flowers does not revive the economy. Agriculture, tourism, manufacturing, transport, telecommunication among other sectors need to come on board with the full support of our citizens.
Happy are the moments when I shall not shop for “mitumba” (second hand) clothes and shoes from abroad but rock Kiko Romeo’s Vintage African wear, Sylvia Njoki’s urban designs, Niku Singh’s neck pieces, walk down the aisle in one of Wambui Mukenyi’s bridal gowns…the car of my dream shall be manufactured in Kenya and not import it from Italy or Germany…
Fiscal policy and monetary policies seem not to solve the situation but maybe thinking out of the box may save us. You see every bad thing has an advantage to it. Increasing our imports prices may discourage a lot of importing and letting our exports compete out there encourages more demand for them.
The Central Bank on the other hand can be said to be performing its function so well in this genre. With inflation also eating us up, the rate of those coins jiggling in pockets is high. There was a time when coins lacked and supermarkets would give you sweets instead to replace that coin. Nowadays, it is the opposite, that one coin balance, you will get it but a 500 change note, not easy. Supply of money in circulation seems to be decreasing if am not wrong. Adopting of the open market operation is taking center stage where there is sale of securities in the open market to reduce liquidity.
The Bretton Woods Institutions (IMF and World Bank) are in the picture with financing projects, providing short and long term loans and steering economic growth through helping the nation achieve a balance of payment. It is not a dilly dally affair here as the terms and policies have always barred nations that have been unable to pay up have it rough not forgetting we at times find ourselves in debt crisis.
Earlier in June the budget shot with a 17% increase from 1.8trillion in 2014 to 2.1 trillion Kenya Shillings. That is expected to boost the growth of the economy up from 6.5-7%. The money having been allocated to all the sectors with education, railway gauge, roads, internal and military security taking the lion’s share; only using them appropriately shall increase our investments.
The Global Entrepreneurship Summit 2015 held from 24th-26th July, brought investors and entrepreneurs to the country who brought forth their ideas to the table. Some even invested in the country with others expected to join in. However, only a stable economy and currency shall make our country their second home.
The US Dollar has been strengthening against all other currencies in the world. China luckily with its Yuan currency with the right freeing policies, might out-do the dollar striking a competitive challenge and divert majority into trading with their currency.
Supporting local industries, empowering innovators, exploiting our resources, implementing clear policies and boosting the diverse sectors will be the only way to curb the weakening shilling.
PS: Hold your horses and cross your fingers. While on it there is this unit called intermediate macroeconomics making me go bananas. The exams around the corner I hope the alphas, betas and that other lingo shall not pop up! Theory tafadhali!!!