EDITORIAL: Struggling economy needs urgent action

Things are tough is a standard opening statement for any small talk in matatus, churches, weddings or even the lobby of a five-star hotel.

A number of surveys indicate millions of households are lucky to place a decent meal on the table as businesses struggle to stay afloat, rendering thousands jobless.

The power of Sh1,000 continues to drop, and can hardly buy four items in the food basket, down from pre-Covid seven.

To say Kenyans have no money in their pockets is an understatement. Indeed, the National Treasury data shows the metric also known as M3 money supply — the broadest measure of liquidity in the monetary system — fell to Sh5.48 trillion from Sh5.49 trillion a year earlier, leaving almost a Sh10 billion hole.

Whereas the macroeconomic stability might have been realised, the economic reality is completely different. Families and businesses are economically devastated.

Their incomes are constrained and destroyed. The economy has contracted and economic activities have significantly declined with a high unemployment rate and job losses.

The latest move by the Central Bank of Kenya to cut the base lending rate and promise to do a follow-up with lenders to ensure that they reciprocate to borrowers is commendable.

More forward-looking economic policies and actions are needed like yesterday to save the sinking ship that is Kenya’s economy.

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Quote of the day: “I believe that thrift is essential to well ordered living and that economy is a prime requisite of a sound financial structure, whether in government, business or personal affairs.”

—John D Rockefeller Jr announced his retirement from managing his businesses to devote his time to being a philanthropist on March 3, 1910.