The drop in the inflation rate and stabilizing exchange rate seen at the turn of the New Year may not be indicative of easier times for the business community if external factors persist.
Kenya Private Sector Alliance (Kepsa) Chairman Patrick Obath said the looming Eurozone crisis, US elections, energy costs and union wrangles are factors that will affect business in the year ahead.
“Being an election year in Kenya we’re going to have a lot of buffeting crosswinds in from all sorts of directions. The political class is going to try and influence what is going on in the country, obviously the external economies; inflows of financial assistance are going to be pegged onto the election. So as a country we need to tighten our belts seriously this year,” he said.
As less dollar inflows are expected with the volatile western markets, Obath noted that boosting the manufacturing sector by producing consumption goods locally will help alleviate pressure on the Shilling moving forward.
“If we were able to transform our consumption patterns so we’re not spending dollars for consumption goods to come in, but to spending dollars to strengthen out manufacturing sector then effectively we’re going to improve the balance of payments,” he said.
The business community is bracing for the elections this year with the launch of a campaign to engage political leaders and the public on issues surrounding the process in the next few months.
Obath said Kepsa has taken a proactive role to prevent the events of the 2008 post election violence from recurring through the initiative.