President William Ruto’s administration has said it will take at least two years for the economy to emerge from current challenges, pointing to continued hardships in the near term.
Prime Cabinet secretary Musalia Mudavadi told Parliament on Wednesday that current economic woes, which include sky-high inflation, rising debt service costs, and a weakened Kenya shilling, took much longer to precipitate than was presumed.
Inflation breached the upper target of 7.5 percent last June and has remained above the threshold for the past nine months, settling at 9.2 percent at the end of March.
Debt service costs have meanwhile spiked off the back of a rising interest rates environment, which has seen spending on debt surpass recurrent spending for the first time.
Additionally, the shilling has continued to slip against the US dollar and has, in the year to date, shed nearly 10 percent of its value against the US dollar to change hands at a mean of Sh135.72 as of yesterday.
The multifaceted challenges have served to dampen the optimism for growth as both households and firms tighten their belts to navigate the tough times.
“I want to be very honest, as a former Minister for Finance, that we are in this for a long haul.
The hole, the circumstances we are in cannot be wished away like instant coffee. We need to be prepared to have about two years of challenges. But there is hope.
We are working to turn the economy around,” he said.
Mr Mudavadi was tasked by MPs with explaining reasons for the escalation of basic commodity prices despite recent government-backed interventions to cut the cost of food commodities including through duty waiver.
So far, Mr Mudavadi said, the government has approved duty waivers supporting the imports of food commodities valued at more than Sh10 billion.
President Ruto’s administration has been facing political pressure from the opposition over its failure to deliver on campaign promises to lower the cost of living and create employment opportunities.
The opposition, which has announced a second wave of protests from next week, has accused President Ruto of reneging on his pledge to lower the cost of living within 100 days of taking office.
