NYANDARUA, Kenya, Mar 23 – Trade minister Amos Kimunya says there is little the government can do to cushion Kenyans from the impact of the global financial crisis which is already being felt here.
Mr Kimunya told Capital Business that while the government must cut down on unnecessary expenditure it could hardly afford to scale back on crucial development projects.
“Major exports of tea, coffee, horticulture, cut flowers, tourism and others are on a downward trend. As a result, most of them are reducing their staff to enable them cope up with the emerging trend,” he said highlighting the major areas of decline.
Speaking from his Kipipiri Constituency, Mr Kimunya pointed out that Kenya cannot risk reversing spending on development projects such as road infrastructure, water, agriculture and information and communications networks.
He classified the areas to be worst hit by a worldwide financial meltdown as “sectors that are the most dynamic (and) typically urban-based” such as the export market, construction, mining and manufacturing.
The former Finance Minister said his government colleagues must be prepared to do what they can and make tough choices to help mitigate against the impact of the financial crisis.
The situation is bleak, he said, and added that worsening economic conditions have seen Kenya revise downwards growth projections for this year from 5.8 percent to three percent.
He said the world’s financial system would post its worst performance since the 1930’s Great Depression with “developing countries bearing much of the economic pain.”
To address the challenge Mr Kimunya urged Kenyans – particularly in rural areas – to initiate small-scale enterprises to support themselves.
He said young people should seek financial support from lending institutions to fund their own financial recovery and become self reliant.