6 Changes MPs Want Implemented to Save Shilling From Depreciation Against the Dollar


The National Assembly Public Debt and Privatisation Committee has proposed six initiatives it wants the government to implement to prevent further depreciation of the Shilling.

In its Report on the Expenditures of the Consolidated Fund Services Under Supplementary Estimates I for FY 2023/24, it was observed that the Shilling depreciated against the USD and the Euro by 24 per cent and 32 per cent respectively between January and October.

As a remedy, the committee proposed for the government to focus on export-driven manufacturing, the mining sector and the financial and insurance sectors. 

MPs noted that the move would enhance their performance and boost the country’s overall Gross Domestic Product (GDP).

The CBK Pension Towers in the Nairobi Central Business District, located along Harambee Avenue.

PSCU

“These sectors are key in the generation of foreign earnings and ordinary revenues, required to meet public debt servicing expenditures,” the MPs proposed.

On the other hand, lawmakers are pushing the government to review its policies in the tourism sector to make the country more attractive for visitors.

The Committee also proposed to have the government develop better policies that will encourage Kenyans in the diaspora to increase their remittances.

“Undertake economic reforms and establish a domestic environment to attract Foreign Direct Investment and international investors.

“Increase the efficiency of absorption of loan financing and increase the share of grant financing of the national budget and safeguard the usage of the same,” read the report in part.

Currently, the shilling against the dollar is retailing at Ksh153.25. In January, the exchange rate was at Ksh123.52

The depreciation of the Shilling has been counterproductive to the economy and Kenyans and this has been witnessed in the high fuel prices and the increase in the public debt portfolio by Ksh1 trillion.

According to the Central Bank of Kenya (CBK) Governor Kamau Thugge, the Shilling had been overvalued by the previous regime stating that the currency, at the moment is settling at its true value. 

He noted that the shilling would stabilise in due course owing to the measures introduced by the government.

CBK Governor Kamau Thugge addressing a Monetary Policy Committee (MPC) meeting on June 27, 2023.

Photo

CBK





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