Whoever wins Kenya’s presidential election in August will have to immediately manage the country’s skyrocketing debt and growing food insecurity. Officials at the Treasury have already sounded the alarm on the huge debt burden in Kenya. Last month, Treasury officials announced that the cost of servicing the national debt has surpassed the government’s recurrent expenditure for the first time in the country’s history.
Treasury figures show that Kenya will spend 1.36 trillion Kenya shillings ($11.8 billion) in debt repayments annually starting in...
AfterShocks: Economics
In the past few years, millions of dollars held in secret accounts abroad have been sent back to some African countries, thanks to tighter international money laundering laws and calls for repatriation of money stolen from public coffers. In 2020, for example, the United States and the self-governing island of Jersey in the English Channel agreed to repatriate more than $300 million to Nigeria, which Nigeria’s military dictator Sani Abacha allegedly stole in the 1990s. Although Abacha, who died in 1998, was...
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Hunger emergency: Amidst a historic drought threatening 13 million people in East Africa with severe hunger, the rise in grain, fertilizer, and fuel prices resulting from Russia’s war in Ukraine is exacerbating an already dire problem. A gas shortage persists in some parts of Kenya despite government interventions. The cost of wheat has risen 80% over the past six months, causing the price of bread in Sudan to roughly double. Median food inflation across Africa is 10.6%. Fertilizer...
Nearly 4 out of 10 Kenyans have been unable to pay rent since the outbreak of the COVID-19 pandemic, according to a new report by the Kenya Institute of Public Policy Research and Analysis (KIPPRA). This is a more than five-fold increase from pre-pandemic figures, which showed that less than 1 in 10 Kenyans could not afford to pay rent on time.
A majority (60.8%) of households struggled with rent because of reduced incomes. One-quarter blame layoffs and business closures. More than one-third...
Last year, Njeri, a hawker in Nairobi, was paying 90 shillings (roughly $0.8) for a packet of maizemeal. Today the same packet goes for 120 shillings, a 30% increase. She is also paying more for non-food items, such as rent and electricity. Njeri’s rent for a single room in Kangemi, an informal settlement, increased by more than 10%, from 4,500 Kenya shillings to 5,000 Kenya shillings (roughly $44) a month, which is nearly a third of her income.
As a...
The International Monetary Fund (IMF) allocated $650 billion worth of Special Drawing Rights (SDRs) to its members in August, and activists are pressuring rich nations to channel, or recycle, their SDRs to low- and middle-income countries to help them recover faster from the COVID-19 pandemic. Advocates for the recycling of SDRs argue that low- and middle-income countries, especially in Africa, should benefit more from the new SDR allocation as their economies have been badly battered by the pandemic. As a result...
In August, the International Monetary Fund announced the largest allocation of Special Drawing Rights (SDRs) in its history. IMF Managing Director Kristalina Georgieva said the allocation, worth about $650 billion, would be “a significant shot in the arm for the world” and, if used wisely, could help economies to quickly recover from COVID-19’s negative economic impacts.
“The SDR allocation will provide additional liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more...
In July, Kenyans were dismayed to learn that a cash transfer programme intended to help low-income people deal with COVID-19’s economic impact did not actually benefit those recepients, due to corruption and other irregularities. A study by Human Rights Watch found that officials in charge of disbursing the funds frequently ignored eligibility criteria for beneficiaries, and in some cases, directed the funds to relatives or friends.
Moreover, not all those who were enrolled in the programme received the cash. Many...
COVID-19 has shown the fault lines in healthcare systems around the world, particularly in fragile states where access to public health services has been disrupted or is extremely limited. In Somalia – which has experienced decades of conflict and political instability since the collapse of the state in 1991 – the lack of a robust health system has impacted the country’s ability to deal with the pandemic.
Amnesty International found that only one hospital in the entire country – the...
In May, the Driftwood Club, a popular beach hotel in Malindi, closed its doors to the public, becoming one of the many hotels in the Kenyan seaside to shut down permanently. Earlier this year, Old Man and the Sea, one of the oldest and most iconic fish restaurants in this coastal town, also closed.
Tourism is the economic backbone of Kenya’s coastal region. Foreign, mainly Italian, tourists usually start trickling into Malindi in July, at the start of the summer...