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Wednesday, November 28, 2007

Why The Sharp Appreciation Of Kenyan Shilling Is Not Good News For Christmas

Kenyans in the Diasporas will have to dig deeper into their pockets for Christmas presents, but there is a possible solution.

There are conflicting reasons as to why the Kenyan shilling has appreciated so dramatically over the last few days. There are those who believe that this latest development cannot be de-linked from the forthcoming mother of all general elections scheduled for 27th December, and that some of our politicians are bringing in huge sums of money from secret accounts abroad to finance the last push of the political campaigns.

Whatever the reasons, a strong shilling has so far not benefited the vast majority of Kenyans because rather than prices going down, they have been going up. Not to mention the fact that thousands of jobs have been lost in the horticultural industry and other sectors that heavily relies on exports for their earnings.

Now there is further concern amongst Kenyans in the Diaspora as they contemplate sending gifts home to their loved ones this Christmas. The painful thing is that they will have to dig deeper into their pockets. Estimates show that for every $100 in gifts sent home, the recipients will be losing up to Kshs 400 when compared to the rate just last week.

Fortunately there are certain options currently in the market that will help a great deal to cushion Kenyans on both sides of this Christmas equation—namely those receiving gifts and those sending them.

This is the rather innovative service offered by Mama Mikes that allows for secure and timely delivery of gifts to any remote corner of Kenya. The fee charged for the service is reasonable o that it beats other much more expensive and less reliable options that Kenyans have been using to send Christmas cheer home (like sending friends who are returning home to vote.)

The truth is that times are hard for most Kenyans at home and those who have not been to Kenya for the last couple of years will not be in a position to appreciate just how bad things really are for so many of their previously prosperous Kenyans.

Mercifully during this season of goodwill and gift-giving, there is a chance to bring a smile of remembrance and good cheer to somebody back home.

The Mama Mikes site makes it possible to accomplish this very securely.


Alex said...

Yes the ksh has been exhibiting quite some funny trend the last few days. Only Yesterday, it hit a 10 year low of 60 to the USD. I will not comment on if this is because of campaign 'dollars' being brougt back because I do not have enough facts about that. what I do know is that there is also anticipation of bigger supply of the green money in the market especially with the conslusion of the Telkom sale to France Telkom, the looming Safaricom IPO where there are all indications that Kenyans in the diaspora and will send money to participate in.

On an aggregate basis however, I think a strong shilling is good for Kenyans because we are a net importing economy. (You in the dispora would want it the other way for the sake of the 'gifts and handouts you send home' to have a bigger percieved value.)

I agree that the strengthening of the shilling is not reflected on the prices on shelves of the supermarkets, at the fuel pumps, kiosks etc. I hope it will soon. but that would not me wish for a weaker currency.

Something to note is that the USD is basically loosing ground on almost all major currencies. infact several countries, especially in the middle east, have long discarded the dollar as their reserve currency. Economic explanations to this are many, up to and including the emergence of the far east economies in the recent past to almost eclipsing the one of the USA one.

And Chris, life is not as terrible as you put here in Kenya. such statements like "The truth is that times are hard for most Kenyans at home and those who have not been to Kenya for the last couple of years will not be in a position to appreciate just how bad things really are for so many of their previously prosperous Kenyans." are unfounded.The truth is that there has been improvements in the life of Kenya in the last few years. However, alot remains to be done and we can achieve more. we should not overlook that potential by concentrating to much on the what we have already achieved. we need to take a quantum leap.

Additionally, I would like to assure you that no job losses have happened in the horticultural industry that are attributable to the strong shilling... I am deep into this industry and yes there is a very big dilution of earnings and profits due to the strong currency but we are more concerned big campaign to abondon our products by the EU and American markets on pretext of the air miles covered hence contribution to global warming due to carbon emmission.

Anonymous said...

Thanks for mentioning this issue.

Nwiri at Nation wrote about the shilling.
While we take into account what he wrote- and you can pull it here, there is a very important area not being mentioned. That an Odinga Administration, which looks certain is forcing the looters to call back funds back to Kenya. Odinga, strong and brave as he is will go after those who still stash their ill gotten wealth out of the country.The arguement is that "bwana, cant you see that I brought it back?"
Very interesting.
The general elections are the main explanation for the appreciating shilling. Too much inflow, including that related to observors, Equity Bank, Telcom, and as mentioned above, frightened looters

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