Syndicate content

Public Sector and Governance

Why has the Kenyan Shilling declined so sharply?

Wolfgang Fengler's picture

How would you feel if, after a normal take-off, you noticed one of the engines on your plane wasn’t working properly? What if you then found out the other engine was overheating? Now suppose the captain announces that you should buckle-up because the plane is about to meet an approaching hurricane?

This is what Kenya’s economy is currently going through. The country is in the middle of a perfect storm, and the declining Shilling is the most visible manifestation of Kenya’s economic woes. Why has the Shilling been falling so much and so unpredictably?

The main reason is that Kenya’s economy is increasingly imbalanced: the country is importing too much and exporting too little.

Taxing the poor… through inflation

Wolfgang Fengler's picture

Imagine you are spending half of your income on something whose price suddenly increases by a quarter. Seems impossible? This is how in fact inflation has hit the poor in many developing countries, especially Kenya.

This September, overall inflation reached a record high of 17.3 percent. One year ago it was just above 3 percent. Why has it increased so sharply even though Kenya has followed prudent macro policies? The short answer is: food and fuel. In Kenya, food accounts for 36 percent of the average person’s expenditures; energy and transport another 27 percent. The urban poor spend more than 43 percent on food. Since January, food prices have increased by almost 25 percent (see figure), partly as a result of international trends but also due to Kenya’s- agriculture policies. Maize prices tripled between January and June until they retreated a little once the government waived import duties and the 2011 harvest started trickling in. 

Protecting the Minnow - Lesotho Economic Update

As uncertainty increases about where the global economy is headed and whispers grow about a “double-dip,” spare a thought for Lesotho.

A small developing country (population less than 2 million), Lesotho is located in one of the most resource-poor parts of Southern Africa.  Around 37% of households live on less than $1/day and about half are below the national poverty line. As a small and relatively undiversified economy, heavily dependent on foreign markets, Lesotho is very vulnerable to shocks. It is also ill-equipped to deal with them.

Cameroon: Towards better service delivery

Raju Jan Singh's picture

The quality of service delivery is fundamental for people's wellbeing, especially for the poor. This is why the situation in Cameroon is worrisome.

Indicators for service delivery in Cameroon tend to trail behind those observed in countries at similar income levels; and for indicators such as primary school completion or child mortality, the country does even worse than the average for Sub-Saharan Africa.

Pour qu’un Etat fonctionne il lui faut de bonnes institutions et des dirigeants de qualité.

Jacques Morisset's picture

Or, à Madagascar, seule 1/5 de la population déclare faire entièrement confiance à la Présidence et les taux sont encore plus faibles pour des institutions comme l’Assemblée nationale (6%) et les Tribunaux (4%).Comment s’attendre à ce que le Gouvernement puisse être performant, à travers sa politique budgétaire, si la vaste majorité des Malgaches ne font confiance ni à leurs institutions, ni à leurs dirigeants ? 

Kenya's quiet revolution

Johannes Zutt's picture

Kenya is in the midst of a quiet revolution—but many people, even in Kenya, seem to be unaware of it, or the enormous governance improvements that it is likely to bring.

We saw a new Kenya emerging last Friday when President Kibaki presided over an historic event that was hard to imagine in the old Kenya:   the launch of a government website, www.opendata.go.ke , that makes enormous volumes of government data available to the public in user-friendly formats. 

For the first time in Kenya’s history, core government data on population, the budget, education, health care and other public services are available to policy-makers, researchers, ICT developers, and citizens in an easily-accessible format.  This portal is one of the first and largest government portals with reusable data in sub-Saharan Africa, making Kenya one of the world’s leading exemplars of open data (see Time magazine's "Silicon Savanna").

But many observers of Kenya are unimpressed.  Why is that? 

Transfer mineral revenues directly to citizens—and avoid the resource curse

Shanta Devarajan's picture

My colleague Marcelo Giugale and I have an Op-Ed in today’s Guardian online advocating the direct transfer of mineral revenues to citizens. 

Mineral revenues typically go from the extracting company to the government without passing through the hands of citizens.  As a result, citizens do not scrutinize the expenditure out of these revenues as much as they would if it were financed by tax revenues.  The net result is misallocation of public spending, slower growth and even slower poverty reduction in many of these mineral-rich countries, such as Cameroon or Nigeria. 

After the long walk to freedom, an affordable bus ride to work

Sandeep Mahajan's picture

Almost two decades after Nelson Mandela's globally-inspiring long walk to freedom, millions of his compatriots find it prohibitively expensive and time-consuming to simply get to work. Millions more have no work, and the geographical separation of the poor from centers of economic activity has a lot to do with it.

Take the case of Lydia (pictured here), who is a soft-spoken, gentle mother of two boys -- a one-year old baby and a fifteen-year old teenager. Each in his own way needs his single mother's attention and time. Time that she has very little of, because she has to spend close to five hours commuting to and from her place of work, the World Bank office, where she is one of the housekeeping and cleaning ladies.

Pages