Kenya’s economy is not doing well.
If there was a year that experienced massive job losses, it has to be 2019. From SportPesa to Bayer East Africa, everyone seems to be cutting jobs or closing shop.But it’s not just job losses.
In October, the inflation rate rose to 4.9% up from 3.83% in September. Treasury on its part has opted to borrow more as KRA is set to miss it’s revenue collection target due to job losses and reduced corporate profits.
Kenyans are borrowing more than they are saving, a clear indication that all is not well.
What’s The Current Situation?
Globally, the trade war between US and China has slowed growth though trade volumes have increased from last year. However, even with reduced trade between them, the countries have been able to add jobs and keep unemployment rate at about 3.6%.
In Africa, the case is different. Kenya’s unemployment rate stood at 9.31% as of December 2018 and the figures have gone up this year. Kenya for top firms have halted the hiring of new staff while others have resulted to firing to reduce the cost of operation.
Government borrowing has negatively affected Kenya’s economy as the borrowing has led to increased taxing to be able to pay the loans.
Even though Kenya’s ease of doing business has risen this year, more firms have had to deal with a hostile business environment.
Even with President Kenyatta’s promise of fighting corruption in his second term, it seems the devil is here to stay. This year has seen more corruption cases come to light even though the process of dealing with those guilty seems to be taking forever.
With all this, Kenyans have felt a pinch in their pockets and definitely in their daily lives.
Who Is Winning?
Even as the economy crashes, some are making it rain.
Banks seem to have found a way of making money where others have failed. According to The Business Daily, The Kenyattas and Ndegwas gained over sh.1 Billion each the last two weeks as bank share prices surged due to commercial lending cap removal. Equity Group CEO gained 1.6 Billion through his stake at the bank. This year has been a good year for the banks as all have made profits while at the same time several expanding regionally.
Safaricom is arguably the largest and most profitable company in East Africa. Just like the banks, Safaricom has continued to make profit when the economy is going down. Safaricom is also looking to extend to Ethiopia as it looks to conquer the region.
Kenya also ranked fourth in Africa in the number of billionaires. The country has about 356 billionaires even though its facing harsh economic times.According to ‘The Africa Wealth Report’ by AfriAsia Bank, most of these billionaires made their wealth from manufacturing, Real Estate and technologies.
So while you may be feeling the pinch in your pocket, someone is probably buying a new Bentley.
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