Tag Archives: cost of living

Jubilee at 1; Kenya at 50 1/4

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Half a Crossing

Africa Confidential‘s free article this month gives the best overall summary of the state of the Kenya government a year after Uhuru and Ruto took office, “A Year of Living Precariously”

Crime, inflation and grand corruption have risen sharply in the last year. Expectations of an economic take-off have dimmed since the cheers that greeted Kenyatta’s disputed election victory. The government has incurred new debt and inflated the public wage bill against a background of falling tourism revenue – the result of the Westgate terrorist attack and Islamist activity on the coast. Beside concern about loans from China and elsewhere, mostly for infrastructure expansion, there are worries about the growing cost of the new, devolved counties.

As for the environment in which to address these challenges, AC says “the politics of sycophancy reminiscent of President Daniel arap Moi’s era [are] now in full flow”.

Of course the most immediate critical issue on the referenced infrastructure projects involving Chinese loans is the construction of a new, “from scratch”, Standard Gauge Railroad. Renowned Kenyan economist David Ndii here explains why the project is far too expensive to make economic sense in lieu of renovating the existing railroad:

Part of the other side of corruption and maladministration in Kenya’s fiscal crisis is exposed in a gutsy report from The Standard this week, “Revealed: How Karuturi got away with denying Kenya millions in taxes“.

And from the National Endowment for Democracy’s Democracy Digest: “Kenya Declares Human Rights ‘Subversive'”.

New Ipsos Kenya poll: Major loss of confidence in institutions; cost of living remains dominant concern

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Today’s release of the latest quarterly “barometer” poll of public opinion from Ipsos Kenya indicates two cross-cutting themes in how Kenyans see public affairs.

First, since November, public confidence has declined in essentially all major institutions, from already generally low levels. Conspicuously, in a measure of progress of reforms under the new constitution, only 12% of Kenyans expressed “a lot” of confidence in the judiciary versus 19% who had “none”.  For the police, 11% had “a lot” of confidence versus 29% who had “none”.

Second, the cost of living remains the most important issue to far and away the largest percentage (50%) of Kenyans. This has been the case for years, and the lack of focus on this issue in the Kenyan and international media, in Kenyan politics and government, and in international policy discussions may well give insight into why Kenyans have little confidence in their institutions. Unemployment (19%) and corruption (9%) are second and third in the “most important issue” question.

See the Ipsos Kenya summary statement and the entire detailed poll presentation.

Worth noting:  Oxford’s Dr. Nicholas Cheeseman offers a critique of ODM’s slide to it’s current low ebb. The latest poll indicates a wide field for a strong opposition party, with continued economic stress facing most Kenyans and little satisfaction with the institutions in power, but ODM will need to find a coherent message and credible voice to rebuild its stature.  The Standard editorializes that “Chaos in ODM is a matter of national concern.”  The Star says “Time for ODM to Re-Invent Itself.”

Also of interest: Andrew Sullivan asks “Why Doesn’t USAID Win Any Friends?”.  Sullivan cites a Reuters piece by Paul A. Brinkley entitled “How to fix foreign aid”:

.  .  .  .

The first step is to end the State Department’s management of foreign assistance, and return to an earlier organizational system in Washington.

The Foreign Service plays a crucial role in the establishment and implementation of U.S. foreign policy. But diplomats are not program executors. The culture of diplomacy, so crucial to negotiation and resolution of conflict, is completely wrong for managing economic development programs. Much less the tactical business development necessary for economic growth.

The primary instrument for implementing foreign assistance, the United States Agency for International Development (USAID), was moved into the State Department in 2005 — in a misguided effort to better align its programs with security and counterterrorism policies. The verdict is now in on this transition. USAID is not effective in carrying out its principal mission: delivering cost-effective outcomes that advance U.S. foreign policy goals.

.  .  .  .

The priority of the State Department — from staffing, to allocation of resources, to a forbidding security posture that inhibits local engagement of war-torn populations — is to fulfill a diplomatic mission. Not to run foreign assistance programs. Realigning organizations, like this move of USAID into State’s sphere, is a poor means of carrying out presidential policy.

Kenya shilling continues to fall after hitting record low; food prices continue to rise

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Economic conditions remain far more challenging in Kenya in the pre-election period than they were in 2006-2007, as policy makers struggle to respond to another 20 percent decline in the Kenya Shilling versus the dollar this year.  Business Daily reports “Kenya shilling falls to 97.20 against dollar”:

At an emergency meeting last week, the Central Bank of Kenya said it would defend the shilling. But some traders said its
absence from the market on Tuesday when the shilling fell through 96.0 for the first time showed its resolve was weak.

“The central bank needs to back up its words,” said another trader. “The trend has been talk big, don’t act.”

Some market players said, however, that if the bank simply offloaded hard currency the reprieve could be short.

“If central bank comes in (to sell hard currency), you may see a reprieve, the shilling may come off its all-time low, but
it’s not sustainable. The shilling will just slip back,” the trader said. “The shilling is on its own.”

Double-digit inflation, deteriorating balance of payments and a crisis of confidence in Kenya’s monetary policy-making
have battered the shilling this year.

Kennedy Butiko, deputy Treasurer at Bank of Africa, said the central bank might not intervene because the shilling’s demise was driven by strong demand for the dollar both at home and abroad.

Another example of the bite of food inflation, also from the Business Daily:

Kenyan households are paying the highest price for breakfast in two years after this week’s double digits rise in the cost of milk.

Leading processors of fresh milk on Monday announced a 10 per cent increase in prices, adding weight to last month’s doubling in the price of sugar and a steep rise in the cost of energy needed to prepare breakfast – the day’s most important meal.

KCC, Brookside and Limuru effected the price changes citing acute supply shortages, and the steep rise in the cost of transportation and packaging.

A half-litre packet of KCC Fresh milk, Ilara and Fresha now sells at Sh33, adding pressure to household budgets – especially at the bottom end of the income bracket.

“In Southern Sudan, for the money”

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“In Southern Sudan for the Money”

JUBA, Sudan, April 9 (Reuters) by Ed Cropley – The only thing that’s cheap in southern Sudan is life.

One of the world’s poorest regions, where four out of five people are illiterate and one in five children fails to make it to their fifth birthday, the south’s economy has been turned on its head since the end of a 22-year civil war in 2005.

A flood of foreign aid workers and more than $2 billion a year in oil revenues under a peace deal with the central government in Khartoum has transformed the south into one of the most expensive corners of Africa.
. . . .

Nobody knows how many people live in the city, although some say its population has trebled in the last five years under the weight of tens of thousands Kenyans and Ugandans out to make a quick buck.

“Earning $100 is difficult in Kenya. Here it’s easy,” said Amos Njay, a Nairobi taxi driver hoping a year in Juba will set him up in a trucking business.

Africans are not the only ones with an eye on the cash.

Foreign aid workers, holed up behind barbed-wire fences and armed guards in semi-permanent tented camps on the banks of the Nile, boast of earning $10,000 a month tax-free and with all their living expenses taken care of.

“You know what they say: in places like this you only get missionaries, mercenaries and misfits. Me? Sure, I’m just here for the money,” said one U.S. aid contractor knocking back a cold beer in a bar on the banks of the Nile.

Other drinkers ranged from dapper pro-democracy activists from the U.S. International Republican Institute to former soldiers whose lives are spent treading in the heels of conflict across the globe, cleaning up mines and unexploded bombs.
. . . .