Tourism is the only horse left standing as Kenya shilling falls

On Tuesday, the Kenyan shilling hit around 0.007 of a US dollar per unit. The fall seems inexorable in a continuous four-year decline that has knocked down 29 percent of the value of the shilling, since 2019.

It’s a drop that is hurting everyone. Of course, it makes oil 29 percent more expensive, even when oil is at the same price as it was three or four years ago.

But oil prices are also higher, currently running at more than 40 percent above their levels of early 2020.

And this cocktail is even more potent still. The currency fall has made the government’s foreign-denominated debt repayments more expensive, pushing up the share of the country’s tax revenues needed for debt servicing.

That leaves less for paying teachers and for oil subsidies. And with such a tiny base of direct taxpayers, it also puts ever more pressure on the indirect taxes taken on each car, or litre of petrol.

Not that anyone needs my column to be told how bad it is.

But my question is, where do we see it going from here? Which is the way out of this financial clamp?

As long as we have so much sovereign debt, our currency can only soar back upwards when our exports climb in leaps, bounds and exponential jumps, and that in a way that generates very rapid growth in our tax base.

As it is, our horticultural and soft commodity exports are under attack from our main market, the European Union, which has a new delightful shot it wants to take at our sovereign independence through what it calls mirror measures.

These are being created now as a framework of environmental laws and policies it wants us to adopt in order to trade with us, including stopping the pest control on our harvests and livestock that adds, according to the FAO, about 40 percent to our output.

So, with our food security targeted to be thrown under this new and devastating bus in order to keep some outwards-bound trade, our equation will be: feed ourselves OR sell our exports to the EU.

It’s not hard to see which must eventually give. There are few regimes that can sacrifice over half the population to starvation to keep selling food to another continent.

This leaves our tourism, made accessible by the very same exchange rate nosedive, cheaper to all, and including all those old niches like medical tourism and conference tourism too.

And so Brand Kenya: your hour is nigh. You are the only horse we will have left standing in this race, and it’s time now to win and keep winning, and save us all.

The writer is a development communication specialist.