Annual consumer inflation has exceeded seven percent, the highest since 2018. As a result, employees became on average three percent poorer in 2022.
These are tough times for Kenyans, especially those in the lower income brackets.
The only consolation is that this is happening in every country in the world which is why central banks everywhere are raising borrowing rates in an effort to tame inflation.
In Kenya, imported goods cost more as the shilling has declined from 100 to the US dollar to 150. This has piled the pressure on Kenyans.
The IMF bails out countries like Kenya that have cash flow problems but it demands that taxes are raised to reduce the budget deficit.
There is no quick fix to what is a global problem. So what should the government do?
Government has to pay the debt incurred over the last 10 years (up from $12 billion to $72 billion). If Kenya defaults on its debt, the economy will get a lot worse.
So all the government can do is to minimise waste and corruption and ensure that as much spending as possible goes into productive investments.
This is what the government says it is doing, but is it doing enough?
Quote of the day: "Democracy is possible, but we have to reinvent our democracy."
Pierre Buyoya
The Burundian army major seized power from President Bagaza on October 3, 1987
