Sunday, December 1, 2024 - Treasury Cabinet Secretary John Mbadi has admitted that the cost of living is still too high for ordinary Kenyans.
In a statement, Mbadi
outlined high interest rates, low liquidity, and the government’s failure
to clear pending bills as the key factors contributing to the high cost of
living.
This comes barely a month after
an Infotrack survey indicated that 73 per cent of Kenyans are
either in severe financial distress or struggling to make ends
meet, pointing to the urgent need to correct the country’s economic
situation before things go further south.
Mbadi asserted that the high
cost of living has largely affected middle-class Kenyans.
According to Mbadi, at the
moment, Kenyans do not have a lot of disposable income and this can be
attributed to the increase in taxes last year.
Mbadi argued that the taxes
introduced by the Finance Bill 2023, which among other things introduced new
employment income tax bands, introducing 32.5 per cent and 35 per cent PAYE
rates for high-income earners, is one of the policies taking money from
Kenyans.
The CS noted that the second
factor affecting the high cost of living is the high interest rates. This is
despite the Central Bank of Kenya (CBK) lowering the lending rate to 12 per
cent in October.
High interest rates make it
difficult for SMEs as well as ordinary Kenyans to access loans, thus hindering
investments and business expansions. This in turn reduces the liquidity in the
market.
The Kenyan DAILY POST
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