Come up with policies to stimulate economy
That this Christmas will for many Kenyans be devoid of the usual hype is not in doubt, thanks to the biting cash crunch caused by a slowing economy.
The year 2019 will be remembered for the phrase “hakuna pesa” (there is no money) a feeling which cut across all sectors including small traders, corporations and even the government as velocity of money caught up with the country’s economic ambition.
The Central Bank of Kenya report summed this performance as the lowest in more than five years – during which there was less money outside banks.
The ripple effect of a struggling economy is a reduction in disposable income, leading to budget cuts at all levels including in households, with a knock-on effect on purchase of goods and services.
As we get into the festive season, we must learn not to perch on the same spot twice. All stakeholders, including the government, private sector and citizens must be actively engaged in speeding up circulation of money to spur the economy.
It is instructive that policy makers look back in retrospect and find out where the rain started beating us and stop the steep fall in disposable income.
For one, the National and County governments must stop holding billions of shillings in pending bills, which has been cited as one of the contributors to fall in circulation of money.
The government must also come up with other stimulus programmes to energise vital sectors of the economy such as agriculture and manufacturing.
The repeal of the interest rate cap law is expected to improve availability of credit, particularly to small businesses, but this can only happen if there is a lower appetite for government borrowing.
Those with the mandate of driving the economy must ensure sound policies are implemented devoid of political shenanigans. Only then can the economy heal itself— and rejuvenate.
There is need to deliberately steer the economy away from politics and focus on service delivery.
Only then can the nation move forward in one accord. This must be the spirit in 2020.
We, at the People Daily wish all our esteemed readers and advertisers a Merry Christmas.