• His sentiments come at a time various sectors of the economy are experiencing hard times amid the falling value of the shilling which has been on a freefall for months now.
• The Federation of Kenya Employers said some 70,000 Kenyans have lost their jobs in the formal private sector in a year and projected that the situation will worsen.
Image: FILE
Senior Counsel Ahmednasir Abdullahi has given a positive projection of the country's economy saying it will turn around for the better in seven month's time.
In a statement on his X platform on Tuesday, the lawyer said the economy will thereafter assume an upward trajectory.
"From my analysis of economic data available and prudent but dispassionate forecast, Kenya's economy will turn for the better from mid 2024 and show robust growth and solid stability," he said.
His sentiments come at a time when various sectors of the economy are experiencing hard times amid the falling value of the shilling which has been on a freefall for months now.
Between mid-September 2022 and November 22 this year, the shilling lost 21 per cent of its value with the exchange rate against the dollar now at a high of Sh152.45 as compared to Sh121.05 same time last year.
Almost over the same period of time, some 70,000 Kenyans have lost their jobs in the formal private sector and the Federation of Kenya Employers has projected that the situation will worsen amid looming more job cuts.
This, FKE said, is based on an ongoing survey on employers on the effects the prevailing high cost of doing business has affected their operations.
"Preliminary results show that it is significant. It shows that between October 2022 and November 2023, we have lost 3 per cent (70,000) of jobs in the formal private sector and 40 per cent of employers have reported that they are planning to reduce the number of employees to meet the increasing costs of operating in Kenya," FKE said on Friday last week.
The federation observed that enterprises are finding it hard to sustain operations and grow owing to the high cost of credit.
This followed a decision by the Central Bank of Kenya to raise its benchmark rate by 100 basis points to 10.23 per cent in 2023, bringing borrowing costs to their highest since August 2016.
These factors coupled with inflation, interest rates, market conditions and government policies further exacerbate the cost of capital in the country.
In order to turn around the sorry state of affairs, FKE advised the government to implement measures that would improve the purchasing power of Kenyans such as reverting fuel levy from 16 per cent to 8 per cent and cutting PAYE to 25 per cent.
"The increase in VAT on petrol has a regressive effect on the economy. With the high energy costs, Kenya continues to lose its attractiveness as an investment destination leading to lower direct foreign investment inflows," FKE observed.
Prime Cabinet Secretary Musalia Mudavadi has on a number of occasions said the earliest the economy will recover is in two years.
In a statement in July, Mudavadi blamed external forces like the war in Ukraine for the sluggish economic growth but said there is hope in the long term.
"Yes, there's hope of things getting better. My estimate is that if we maintain tough and stringent policies and we use our resources properly, within a two-year period, or two-and-a-half year period, we shall see very good signs of recovery," he said.