Kenya Making Strides Towards Economic Recovery, says Mudavadi

December 22, 2023

Prime Cabinet Secretary Musalia Mudavadi insists that the government is implementing strategies to reduce the cost of living in the near future.

While key indicators for economic recovery and sustainability may vary, Mudavadi encourages Kenyans to remain optimistic that the country is on the right path.

He urged Kenyans to refrain from misinterpreting the government’s stance, emphasizing that the revitalization of the economy is not akin to instant coffee but involves gradual steps to set it on the right trajectory.

“We need to admit as Kenyans that there is some relief as some indicators have started showing, the economy is recovering gradually. We subsidized fertilizer and focused on production and now it is evident the cost of Unga has gone down as one of the indicators within the cost of food bracket,” said Mudavadi.

“What Kenyans should desist from is misconceptualization of information being shared by key government officials and entities on where we are now, since different aspects of economic revitalization play out differently.” The PCS warned.

According to Mudavadi, Kenyans have misunderstood President William Ruto because they have not been attentive to the fact that he has been primarily focusing on addressing debt distress.

He highlighted that the country is gradually recovering from the burden of debt due to the strategies implemented by the government.

“The President’s message simply means we are on the right track, slowly by slowly, steadily and with the right measures being put in place, we will win over the debt issue and other economic recovery indicators will begin to manifest positive progress,” Mudavadi said.

Govt Relationship with IMF and World Bank

Speaking in a joint radio and television interview on Thursday, Mudavadi emphasized that the positive relationship maintained by President Ruto’s administration with key financial institutions such as the International Monetary Fund (IMF) and the World Bank has played a crucial role in keeping Kenya on track in its efforts to stabilize the economy.

He urged Kenyans to reflect on the challenges the country faced in the early 1990s when its relationship with the IMF and World Bank was strained, resulting in more than two years of negotiations to restore normalcy in the country’s economic sector.

Kenyans should remember that we are members within the Bretton Woods agreement and keeping good financial relationships with the IMF and World Bank gives us an upper hand in accessing financial credit at much lower interest rates through the concessionary loans arrangements,” he stated.

Adding: “If we could maintain the trend that our predecessors adopted of going for commercial loans that accrue high interest rates with a shorter repayment period, Kenya could be on its knees now economically.”

Mudavadi commended the collaborative approaches employed in working with the IMF and World Bank to achieve a shared goal. He stated that these efforts have brought relief to certain sectors, indicating a positive trajectory for the recovery and growth of Kenya’s economy.

Mudavadi Urges Patriotism and Optimism

Mudavadi urged Kenyans to be patriotic and optimistic, emphasizing that the ongoing efforts are aimed at stabilization to ensure that key indicators driving the economy are functioning. He encouraged a shift in focus towards areas of interest such as manufacturing, production, business, trade, and industry, which directly contribute to job creation.

“We need to appreciate that disruption of supply chain globally as a result of what is happening in places like Gaza and the Russia-Ukraine war, leads to delay and shortages in the supply of commodities like oil and fertilizer to regions like ours thus this also affects the growth of the economy,” he explained.

The Foreign Affairs Cabinet Secretary highlighted strategies such as the recently signed European Union Economic Partnership Agreement as one of the avenues the government is exploring to secure markets for exports and to facilitate business opportunities with countries that will contribute to injecting foreign exchange into the economy.

“This is a good example since now we have an agreement with 27 countries across Europe. We will be able to do business with them tariff-free and with no quotas. Opportunities that will in the long run benefit our people, since more jobs will also be created locally and this is how we shall achieve economic stability,” said Mudavadi.

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