NAIROBI, Jan. 1 (Xinhua) -- Some Kenyans thronged entertainment spots, others places of worship and various concerts organized Sunday across the East African nation to usher in the New Year.
Regardless of where they chose to end the year 2023, two things were on their minds. The first is to bid farewell to a tough 2023, and second, to gladly welcome 2024 with hopes for better economic prospects.
The year 2023 was the one many Kenyans would not want to remember -- thanks to the many economic challenges during the period. They included the fall of the shilling, the local currency, by about 24 percent year on year against the U.S. dollar and other major world currencies, pushing up the cost of imports; inflation rising to a high of 9 percent due to a surge in costs of basic items such as fuel, food and electricity; and higher taxation as the government sought to shore up revenues.
Furthermore, the country witnessed the worst drought and El Nino rains a few months apart, experiencing deaths and destruction.
As many Kenyans sang, danced, cracked fireworks and prayed for the New Year, they were glad that 2023 was over.
"2023 was a bad one because many of us struggled to make ends meet," said Sylvia Muchemi, a businesswoman in Nairobi, Kenya's capital.
In 2023, Muchemi kept her clothes business open every day but still struggled to stay afloat, she said on New Year's Eve.
"I am lucky the business didn't collapse like many others," she said while admitting the sales "were too low because of the hard economic times which cut the spending power."
Similar sentiments were shared by commuter bus driver David Kyalo, who noted that business was bad in 2023 due to the high cost of fuel.
"The fuel kept on rising during the year, but we couldn't pass the cost to consumers, many who reduced travel in 2023," said Kyalo, who works for Rembo Shuttle, a Sacco that plies the Kitengela route, in southern Nairobi.
President William Ruto, in his New Year address to the nation, acknowledged that 2023 was a tough year for the country, but stressed that his government had instituted various policies to revive the economy.
"The choices we have made over the last year were neither easy, populist, nor convenient. They were however meaningful, appropriate and necessary... in the short term painful, but in the long term gainful," he said.
Ruto noted that Kenya's economy had also been impacted by the global economic dynamics that include the conflict in Europe, the hiking of interest rates in the developed world, as well as climate change that caused the most severe drought in 40 years.
The president, however, assured Kenyans that his government had embarked on a fiscal consolidation program that has seen it cut expenditure by up to 2.5 billion U.S. dollars to reduce borrowing and enhance tax revenues by 3.8 billion dollars to fund development.
Kenya's economy grew at an average of 5 percent in 2023, according to the World Bank. The global lender attributed the improved performance, from 4.8 percent in 2022, to a strong rebound in the agriculture sector.
The recovery of agriculture led to improved food supply which helped reduce inflationary pressures, with inflation nearing a two-year low of 6.6 percent at the close of 2023.
The World Bank also noted that the tourism sector continued to expand, credit to the private sector is improving and manufacturing activity is expected to rebound going forward.
These prospects for better times have given Kenyans hopes of improved economic conditions in 2024.
Sylvia Munyendo, a fashion designer, said that she was looking forward to lower inflation in 2024 so that people can have more spending power to drive up business.
Tony Watima, an economist, noted that the anticipated cutting of the benchmark rate by the U.S. Federal Reserve in 2024 would be a positive step for emerging markets, with the hikes in the last two years having been unprecedented.
Kenya's National Treasury projected that the country's economy would grow 5.5 percent in 2024, supported by the continued growth of the services sectors, the rebound in agriculture, and the ongoing implementation of measures to boost economic activities. ■
