00:00 Kenyan furniture maker, Jared Omondi, now has to walk several miles to work every day.
00:07 Public transport in Nairobi became unaffordable for Omondi after the government doubled the
00:13 tax on petroleum products last June. Like millions of Kenyans, he's facing spiraling
00:19 living costs caused by government measures to tame surging public debt.
00:26 "It's been difficult having a good meal. You cannot afford to buy a half kilogram of
00:33 meat and if you have children, they have to eat kale the whole month. If you are to change,
00:40 it can only be sardines."
00:44 Higher taxes are hitting business too. A survey by the Federation of Kenyan Employers of its
00:51 4,500 organizations, which employ 1.2 million workers, found 40% had cut jobs in the past
00:58 year. Some said they were considering relocating to neighboring countries. Jacqueline Mugo
01:05 is the executive director of the FKE.
01:08 "If I look at the last year or so, I would summarize that employers are in distress.
01:16 It's a very tough economic environment. The business operating environment is fluid, it's
01:23 unpredictable. And we see this reflected in various ways. That distress is reflected in
01:30 employees making very many demands on employers. And employers also having to look at the cost
01:36 of doing business and making tough decisions about what to cut off."
01:41 On top of consumers reining in their spending, the Kenyan shilling also suffered. Last year,
01:47 it fell 20% against the dollar. And markets questioned whether a 2 billion euro bond maturing
01:54 this June could be repaid.
01:58 This week provided much needed fiscal breathing space for the government after it succeeded
02:03 in swapping out of that bond. Positive sentiment around the repayment of the bond and offshore
02:08 investor demand helped push the shilling up more than 7% this year. Yet analysts said
02:15 higher interest payments on the new 2031 bond and structural economic weaknesses are still
02:21 an issue. And something that would likely keep the currency weak and taxes high, providing
02:27 no relief for household budgets.
02:29 [BLANK_AUDIO]
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