Many businesses across all the sectors of our economy experienced challenges in 2023. With the Kenyan shilling on a free fall, high inflation and tightening of the fiscal policy by the government, 2023 was not a walk in the park for businesses – both big and small. They had to tighten their belts in order to remain profitable.This included making strategic moves like downsizing and putting their expansion plans on hold. But despite encountering these challenges, the resilient businesses still managed to grow in profitability – key players in the financial sector like commercial banks and Saccos are good examples in that respect.
Happily, the recent strong rally of the Kenyan shilling against the dollar has rekindled hope for our businesses. As a result of this development, the prices of petrol and diesel have dropped. Diesel in particular is a major of source of energy in many local industries. With the drop in its price, the cost of producing goods in these industries and transporting them to their respective markets will go down, followed by a drop in their prices. This will not only benefit consumers, but it will lower inflation and the cost of living in the country. The cost of transport for both private and public vehicles will also go down, hence increasing the disposable income of many households in the country.
The heavy rains currently being experienced in the country, coupled with the drop in the fuel prices has also led to the reduction in the prices of electricity. By and large, this will also lower the cost of living since electricity is a major source of energy in many businesses and households.
But we are not yet out of the woods. Kenya is a net importer of many essential goods that are widely used by her citizens. We need to re-examine our balance of trade with various countries globally – especially the developed ones like China and US. These countries should make it friendly and possible for us to export goods to them since we also import a lot from them.
In the same vein, the government through its policies should make it possible for local entrepreneurs to set up and run industries so that we can stop over relying on imports. A good case in point is the clinker plant worth Kshs. 45 billion set up in West Pokot county by Devki Group and recently inaugurated by President William Ruto. The mega plant is a shot in the arm for cement manufacturers in the country. It will help in significantly reducing the price of cement – a key product in the construction industry and real estate.
