The emerging preference for dollar payments in real estate will hurt Kenyans who have barely recovered from the Covid-19 pandemic and the economic uncertainties caused by the geopolitical tensions like the Russia-Ukraine war.
The cost of living is already beyond many households’ reach and the dollarisation of the economy will trigger a sharp increase in prices of goods and services.
Data from the Central Bank of Kenya show the shilling has lost ground on the dollar by nine percentage points since February 2022 and is currently trading at 124.80 as per the official exchange rate.
Landlords and traders have been adjusting prices upwards regularly to cover the movement of exchange rates, contributing to the rising inflation.
This has made life unbearable to many families especially living in major urban areas.
In a country already struggling with youth unemployment is high, continued dollarisation will make the cost of business high, pushing employers to freeze hiring and salary increases.
Widespread dollarisation will also be a major constraint to the country's monetary policy as it will reflect reduced confidence in the shilling.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
