Cotu report reveals why most Kenyans are now struggling

The fall of the shilling is one of the reasons Kenyans are weighed down by harsh economic times, a new report by workers’ umbrella body reveals.

The report by Central Organisation of Trade Unions (Cotu) also lists high interest rates, high rates of redundancy and persistent unemployment as other factors why Kenyans are struggling to eke out a living.

The report to be tabled today during a meeting of affiliated general secretaries also cites the dwindling international trade, ballooning public debt, runaway corruption and high levels of taxation as other reasons sinking Kenyans to depression.

The report says that the Kenya Shilling has seriously depreciated against major currencies, especially the US Dollar, draining the purchasing power of workers as well as their savings.

According to the report, the cost of living has been on the increase over the past year thereby reducing the purchasing power.

“The other factor contributing to high cost of living is the inflation rate. Inflation robs workers of their hard-earned money. It is a hidden tax on each shilling that a Kenyan worker earns. The higher the inflation, the lower the real value of the shilling, and the lower the transactions in the economy, leading to poor performance,” reads the report in part.

Cotu report also says interest rates have been on the increase in Kenya, making loans expensive thereby starving workers and businesses of the much-needed capital.

“Kenya’s international trade balance continues to be negative further weakening the
shilling as more foreign currency is needed for imports,” reads the report.

Report also says that unemployment has persisted over the past year and continues to rise with several companies closing shop in Kenya and moving to neighbouring countries.

“Kenya’s public debt continues to grow due to rampant borrowing by the government especially from the IMF and the World Bank that are accompanied with strict conditions that starve the economy of the much needed growth,” Cotu report says.

The document states that workers have been devastated by the breaking news on corruption in Kenya.

“Workers say that corruption draws too much from the economy perhaps more than the annual national budget and deny the country so much in tax revenues given that proceeds of corruption are not subjected to taxation,”  the document reads.

Little income

The report, which Cotu Secretary General Francis Atwoli said has already been presented to the president for consideration, also notes that the current levels of taxation drain workers’ income leaving them with very little disposable income.

To achieve recovery and future prosperity in the challenges facing the country, Cotu propose a five-point strategy.

They include, embracing effective and efficient stakeholder engagement in the entire development process, building, restoring and sustaining strong investor confidence in Kenya.

Other strategies Cotu believes will get the country out of the mess are building and supporting strong, effective, accountable and inclusive institutions, embracing research in the entire development process and a zero tolerance to corruption.