Work round the clock to shore up economy
The economy has not had a smooth ride since the advent of Covid-19 that took several sectors of the economy to the intensive care unit to slow down the economy by a negative 0.3 per cent in 2020 before recovering at 7.5 per cent last year.
Although the economy has been on the mend, indications are that it may not grow as fast as expected this year, signalling the need to moderate expectations, especially in the campaign season when politicians are wont to promise high heaven.
Therefore, while various reports signalled that Kenya’s economy would grow by 6 per cent, data from the Parliamentary Budget Office (PBO) shows that the August election will have a significant impact on growth and that both local and international dynamics will hamper growth.
Among the main concerns include high commodity prices, the rising cost of fuel and polls. Every election cycle takes Kenya’s economy down the drain and a similar trend is expected this year more so this being a high-contested transition election, which is always accompanied by changes in policy and personnel, all of which conspire to stymie growth.
Further, electoral processes usually force investors to hold on to their money owing to market uncertainty.
The budget office has also called out those banking on oncoming rains to spur growth in agriculture, warning that indications of erratic weather conditions will also hamper growth.
Already, the Ministry of Agriculture has warned that Kenyans may face a food crisis going forward and called for the importation of maize and wheat, both of which are in low supply.
There are also various unknowns like Russia’s invasion of Ukraine, and the impending inclusion of Sweden and Finland into Nato, which have a direct knock-on effect on various sectors of Kenya’s economy by influencing logistics in the value chain while also hurting tourism recovery.
This war will continue influencing the cost of wheat and fuel.
If economic growth dips, as the budget office and other experts project it will, expectations on job creation, tax collection and reducing the cost of living will be adversely affected.
This will mean more debt and pain to taxpayers. To this end, Kenyans must consider mending expectations and cushioning themselves with the knowledge that it will be a tough period.
The government should also work round the clock to anticipate these disruptions and address them before they weigh down on the economy.
Political players too should be wary that their activities will determine the welfare of Kenyans and should advocate for a peaceful transition.