BY NANIS KIRUGARA
After years of financial strain, Kenyans are beginning to feel the impact of bold economic reforms designed to ease the cost of living.
Under the Bottom-Up Economic Transformation Agenda (BETA), President William Ruto’s administration has made significant strides in lowering inflation and stabilising the economy.
Fuel and food prices have fallen, the shilling has strengthened, and inflation has reached a historic low of 2.7%.
As essential commodities become more affordable, the government’s focus on economic resilience is transforming everyday life for millions nationwide.
The government announced recent successes in managing inflation, which has dropped to 3.6%, the lowest rate since 2012, from 9% earlier this year.
The reduction was supported by a series of strategic sectoral initiatives led by President William Ruto.
“The government is pleased to announce substantial progress in reducing the cost of living for Ken- yans,” stated Government Spokesperson, Hon. Sen. Dr. Isaac Mwaura, CBS, during a press briefing on November 4, 2024.
Through coordinated efforts across multiple sectors, the government is making tangible strides to improve the affordability and economic resilience of all Kenyans.
Key to the reduced cost of living has been a drop in fuel prices, achieved without subsidies, which has allowed Kenyans to save on transport and energy costs.
This change has been particularly beneficial for small businesses and the transport sector.
John Odongo, a boda boda operator in Kisumu, reports saving up to Sh200 per day on fuel, which he can now allocate towards his children’s education.
“These savings enable me to offer more affordable rides, which helps the community and brings more customers to my business,” Odongo shared.
Food prices have also dropped thanks to the government’s fertiliser subsidy program.
By boosting farm productivity, especially in major agricultural regions like Rift Valley and Central Kenya, this initiative has increased yields and brought down the prices of staple foods.
“Basic household commodities, which had previously experienced steep price increases, have become more affordable,” Mwaura emphasised.
As per today, unga now retails for around Sh100, sugar for KSh120, cooking gas for approximately Sh1,000, and cooking oil for Sh200 per liter.
The government’s focus on stabilising the shilling has also paid off, with the currency now standing at Sh130 to the dollar, compared to Sh162 at the start of the year.
The stable shilling is enabling businesses to plan more effectively, with fewer unexpected costs affecting imports. This currency stability is a major advantage. It has led to greater predictability for import costs, benefiting sectors dependent on imported goods, like fuel, pharmaceuticals, and industrial machinery.
The strengthened shilling, paired with other economic reforms, has also rejuvenated corporations that were struggling.
For example, Kenya Power and Lighting Company reported a profit of Sh30 billion, bolstered by increased electricity sales and lower financing costs. Similarly, Kenya Airways turned a profit of Sh513 million in the first half of 2024, a significant recovery from last year’s Sh21.7 billion loss.
KenGen also saw a 35% increase in profits, reaching Sh6.8 billion due to robust performance from geothermal and hydroelectric power.
“Kenya’s inflation rate has shown a marked and steady reduction as a result of targeted economic reforms in key sectors, particularly in energy and agriculture,” Hon. Mwaura highlighted, celebrating a noteworthy achievement for the government and citizens alike.
The International Monetary Fund (IMF) has taken note, approving $606 million (Ksh. 78 billion) in development funding as a nod to Kenya’s prudent economic management and commitment to early repayment of the Eurobond debt.
This endorsement highlights confidence in Kenya’s economic trajectory, supported by early repayment of the country’s $2 billion Eurobond debt.
Meanwhile, Kenya’s foreign exchange reserves have increased to $8.5 billion, boosting investor confidence and solidifying Kenya as an attractive destination for internation- al investments.
“The decline in inflation allows households to manage budgets as they experience more predictable pricing on everyday goods,” Mwau- ra explained.
He added that “this in-cease not only enhances the nation’s financial security but also boosts investor confidence.”
The government is making tangible strides to improve affordability and economic resilience for all Kenyans, giving Kenya a promising path toward sustainable growth.
The BETA Plan’s long-term vision, aligned with Kenya’s Vision 2030, aims to position Kenya as a competitive and prosperous country.
The focus on agriculture, health- care, housing, and digital and creative industries has fostered a resilient economy that benefits Kenyans at every level.
The future looks promising as Ken- ya’s growth is projected to average 5.1% over the next two years.
Businesses, citizens, and investors alike are hopeful for what lies ahead, as the government’s focus on enhancing economic resilience continues to bring tangible benefits to the people of Kenya.
The writer works in the office of the Government
Spokesperson
