In summary

  • Retailers still suffering despite the dollar decline in the market.
  • Dollar fluctuation impact on Kenya’s Economy.

The dollar depreciation has led to a deficit in the foreign exchange reserves.

Businesses that are import oriented like the second-hand clothes market in Nairobi’s Gikomba region are severely affected.

Speaking to Ghetto radio news retailers say they are facing price increase despite the dollar decline in the market expected to create better conditions for importers.

Impact of dollar fluctuation on Importation.

Traders offloading imported secondhand clothes ‘mitumba’ in Gikomba market. Picture Courtesy of Ghetto Radio

 

The ability of local businesses to purchase items from other nations is implied by growth in the value of shillings.

The recent fluctuation of the dollar has greatly affected businesses in Kenya. The dollar went up against the Kenya shilling up to 163.99 and dropped drastically to Ksh 142.5188 within a one-month period.

As consumers feel the pinch, the deeper structural issues still exist, and experts say things might not get better in the near future.

Difficulty in sustaining profit.

The value of the dollar has depreciated, and it has become difficult for importers to maintain profit margins, hence there is need for them to do adjustments in their pricing strategies.

The adjustments, however, don’t necessarily translate into relief for consumers as retailers in Gikomba are experiencing high prices though they expected favorable outcomes due to the dollar depreciation.

Speaking to Ghetto Radio News a trader from Gikomba says they are currently selling at a loss since majority had ordered imports from Canada, China and the UK.

The Bigger Picture

These challenges underscore deeper structural issues within Kenya’s economy, indicating that the problem extends beyond short-term fluctuations in currency values. Experts suggest that addressing these structural problems will be crucial for providing long-term relief and stability to businesses and consumers alike.

However, finding solutions to these underlying issues may take time and concerted efforts from both the government and private sector stakeholders.

Deeper structural problems

This problem, however, highlights the deeper structural problems within Kenyan economy, which show that the problems are not only transient but rather structural.

As problem solvers, experts believe that to have a better situation, we need to start by tackling the structural problems that have been the main obstacle for businesses and consumers.

While it may be challenging to come up with solutions to those deeper problems, this may require a long-term effort from both the government and private sector stakeholders.

STORY BY JUDITH KANAIYA

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