The rise in fuel prices is more bad news for Kenyans. Despite claims to the contrary, it is bound to have an effect on the cost of living because the cost of energy is bound to go up, and with it the cost of manufacturing.
Power utility Kenya Power has already warned consumers that its bills will go up from this month due to the fuel levy component.
It is also worrying that despite the Central Bank reducing its key rate, most commercial banks are yet to follow suit and lower the cost of borrowing.
The two means businesses will continue to struggle. Even worse, the cost of the Government’s recurrent expenditure is on the rise with the increased pay for teachers and lecturers as well as doctors.
Meanwhile, growth in the key telecommunications sector is likely to be hit by the new value added tax targeting mobile money transfers.
The 10 per cent VAT will be shouldered by consumers as mobile phone companies are already struggling to lower their debt portfolio.
The value of mobile money is so huge it was inevitable that Treasury would eventually be unable to keep its hands off it.
The economy is also gearing up for the wasteful spending by politicians that accompanies every General Election.
However, much of this cash is of no value to the economy as it is immediately consumed
