Browsing: Kenya Economic Survey

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Kenyan Shilling falls to all-time low as Fed rates take toll

Countries
  • The Kenyan shilling has fallen to a new low of 140.04 against the US dollar.
  • Central Bank of Kenya data shows the unit is also losing to other major currencies including British Pound and Euro.
  • Last year, the Kenyan shilling depreciated by about 7.5 per cent against the US dollar, the UAE dirham (7.5%), Saudi Riyal (7.4%) and the Chinese Yuan (3.1%), the Kenya Economic Survey 2023 shows.

As developing market currencies continue to suffer from the worldwide increase in interest rates, which is being spearheaded by the US Federal Reserve, the Kenyan Shilling has dropped to a historic low in relation to the US Dollar.

The Fed has increased the benchmark rate ten times in a row, or a total of five percentage points, since March of last year. In the last 40 years, these increases are the most abrupt. In an effort to combat US inflation, interest rates …

Kenya set for revival with President Ruto's bottom-up economic model.

Is Kenya’s Economic Revival around the corner?

Countries

The new administration under President William Ruto, is striving to set the economy in the right tempo having inherited a heavily indebted government.

Through debt restructuring among other key economic reforms, Ruto’s administration is committed to quell inflation and create a thriving economy for all Kenyans.

The recently published East Africa Economic Outlook report, indicates that Kenya is among the countries in the region that could face rising risks of debt distress, thus widening fiscal and current account deficits, largely due to structural weaknesses exacerbated by the pandemic and the Russia-Ukraine war.

According to the 2022 African Economic Outlook (AEO), by AfDB inflation is projected to edge up to 7 per cent, close to the upper end of the target band at 7.5 per cent, caused by greater energy and food inflation. The Kenya National Bureau of Statistics (KNBS), reported that the country’s inflation rate as of October 2022 stood …

Over 50 per cent of Kenyan manufacturers feel the sector is struggling to compete with developed countries with equal pressure coming from regional states, a study has revealed. This is in the wake of continued high costs of doing business in Kenya with the local market further being infiltrated by cheap imports mainly from China. The study has been unveiled by SYSPRO, a global provider of industry-built Enterprise Resource Planning (ERP) software for manufacturers and distributors, together with Strathmore University. The cost of energy in Kenya leads as the top factor affecting businesses.

What is hurting manufacturing in Kenya

Manufacturing

33% of manufacturers in the country plan to reduce the number of full time employees

Only 48 per cent of manufacturers in Kenya have expressed optimism that the sector would grow this year, a latest survey has revealed, as investments in the country continue to face headwinds.

According to the Q1 ‘Manufacturing Barometer’ by the Kenya Association of Manufacturers (KAM),  the biggest worry by industry players over the next six months (61 per cent) is the high cost of  raw materials, which is making their products uncompetitive both locally, regional and in the  international markets.

About 57 per cent are worried about pressure from increased wages, 54 per cent are concerned over decreasing profitability while 48 per cent fear that taxation policies in the country will affect their businesses.

Oil and energy prices which have remained high worries 43 per cent of the surveyed manufacturers in the country, the study …