KIRUGARA: Bold moves ease cost of living

BY NANIS KIRUGARA

After years of financial strain,
Kenyans are beginning to
feel the impact of bold economic reforms designed to
ease the cost of living.

Under the Bottom-Up Economic Transformation Agenda (BETA),
President William Ruto’s administration has made significant strides
in lowering inflation and stabilising
the economy.

Fuel and food prices have fallen,
the shilling has strengthened, and
inflation has reached a historic low
of 2.7%.

As essential commodities become
more affordable, the government’s
focus on economic resilience is transforming everyday life for millions
nationwide.

The government announced recent successes in managing inflation, which has dropped to 3.6%,
the lowest rate since 2012, from 9%
earlier this year.

The reduction was
supported by a series of strategic
sectoral initiatives led by President
William Ruto.

“The government is pleased to
announce substantial progress in
reducing the cost of living for Ken-
yans,” stated Government Spokesperson, Hon. Sen. Dr. Isaac Mwaura,
CBS, during a press briefing on November 4,  2024.

Through coordinated efforts across
multiple sectors, the government is
making tangible strides to improve the affordability and economic resilience of all Kenyans.

Key to the reduced cost of living has been a drop in fuel prices,
achieved without subsidies, which
has allowed Kenyans to save on transport and energy costs.

This change has been particularly
beneficial for small businesses and
the transport sector.

John Odongo,
a boda boda operator in Kisumu,
reports saving up to Sh200 per day
on fuel, which he can now allocate
towards his children’s education.

“These savings enable me to offer
more affordable rides, which helps
the community and brings more
customers to my business,” Odongo
shared.

Food prices have also dropped
thanks to the government’s fertiliser subsidy program.

By boosting
farm productivity, especially in major
agricultural regions like Rift Valley
and Central Kenya, this initiative has
increased yields and brought down
the prices of staple foods.

“Basic household commodities,
which had previously experienced
steep price increases, have become
more affordable,” Mwaura emphasised.

As per today, unga now retails for
around Sh100, sugar for KSh120,
cooking gas for approximately Sh1,000, and cooking oil for Sh200 per liter.

The government’s focus on stabilising the shilling has also paid off, with
the currency now standing at Sh130 to the dollar, compared to Sh162 at
the start of the year.

The stable shilling is enabling businesses to plan more effectively, with
fewer unexpected costs affecting
imports.
This currency stability is a major
advantage. It has led to greater predictability for import costs, benefiting sectors dependent on imported
goods, like fuel, pharmaceuticals, and
industrial machinery.

The strengthened shilling, paired
with other economic reforms, has
also rejuvenated corporations that
were struggling.

For example, Kenya Power and
Lighting Company reported a profit
of Sh30 billion, bolstered by increased electricity sales and lower
financing costs.
Similarly, Kenya Airways turned a
profit of Sh513 million in the first
half of 2024, a significant recovery
from last year’s Sh21.7 billion loss.

KenGen also saw a 35% increase in
profits, reaching Sh6.8 billion due
to robust performance from geothermal and hydroelectric power.

“Kenya’s inflation rate has shown
a marked and steady reduction as a
result of targeted economic reforms in key sectors, particularly in energy and agriculture,” Hon. Mwaura
highlighted, celebrating a noteworthy
achievement for the government and
citizens alike.

The International Monetary Fund (IMF) has taken note, approving $606 million (Ksh. 78 billion)
in development funding as a nod to
Kenya’s prudent economic management and commitment to early
repayment of the Eurobond debt.

This endorsement highlights confidence in Kenya’s economic trajectory,
supported by early repayment of the
country’s $2 billion Eurobond debt.

Meanwhile, Kenya’s foreign exchange reserves have increased to
$8.5 billion, boosting investor confidence and solidifying Kenya as an
attractive destination for internation-
al investments.

“The decline in inflation allows
households to manage budgets as
they experience more predictable
pricing on everyday goods,” Mwau-
ra explained.

He added that “this in-cease not only enhances the nation’s
financial security but also boosts investor confidence.”

The government is making tangible
strides to improve affordability and
economic resilience for all Kenyans,
giving Kenya a promising path toward
sustainable growth.

The BETA Plan’s long-term vision,
aligned with Kenya’s Vision 2030,
aims to position Kenya as a competitive and prosperous country.

The focus on agriculture, health-
care, housing, and digital and creative industries has fostered a resilient economy that benefits Kenyans
at every level.

The future looks promising as Ken-
ya’s growth is projected to average
5.1% over the next two years.

Businesses, citizens, and investors
alike are hopeful for what lies ahead,
as the government’s focus on enhancing economic resilience continues to
bring tangible benefits to the people
of Kenya.

The writer works in the office of the Government
Spokesperson