Treasury CS Ndung’u Warns of Tough Measures to Curb Rising Living Costs
While external factors, such as the Ukraine-Russia conflict, have been linked to the escalating cost of living, Ndungu stressed that past policy mistakes have had a more substantial impact on the economy.
NAIROBI, Kenya – Nov 7 – Treasury Cabinet Secretary, Njuguna Ndungu, has cautioned the public to prepare for challenging times ahead as the government enforces strict policies to alleviate the high cost of living. He attributed the current economic difficulties to the previous administration’s inadequate monetary policies.
CS Ndungu explained that a combination of internal and external shocks had significantly impacted the country, leading to elevated inflation and economic recession. The government is now working on robust measures to reverse this trend.
While external factors, such as the Ukraine-Russia conflict, have been linked to the escalating cost of living, Ndungu stressed that past policy mistakes have had a more substantial impact on the economy. He called on Kenyans to acknowledge these errors to avoid repeating them.
He noted that the rising cost of living is due to insufficient policy interventions, including the previous subsidization of consumption rather than production and the overvaluation of the Kenyan shilling.
According to the Treasury Cabinet Secretary, the subsidies for fuel and maize were unsustainable, and while intended to protect the poor, they had negative implications on the country’s finances.
The Kenyan economy currently grapples with high levels of debt, inflation, unemployment, and an unstable currency, all of which hinder recovery efforts. The situation has been further exacerbated by the effects of the COVID-19 pandemic in 2020 and 2021, as well as disruptions in the global food supply chain due to the Ukraine-Russian War.
As a result, the number of vulnerable households in Kenya has significantly increased, and the cost of basic food items has become unaffordable for many families.
CS Ndungu expressed confidence in the policy interventions implemented by President William Ruto’s administration, which aim to rejuvenate the economy, generate employment, and reduce the cost of living.
He noted that while monetary policies aimed at controlling inflation had proven insufficient, experts argue that they should be accompanied by fiscal policies, such as reducing value-added taxes and import duties, to achieve the desired economic stability.
