David; I have struggled with this problem since the 2008 post election violence (PEV). My colleagues and I (three people) have been on the Governors case, but it seems there's a misguided policy at the CBK. He perpetually ignores our concerns, I even protested his reappointment. I think the CBK are looking at expanding the economy from the wrong perspective. Most of the people that sit in our government (policy makers) have businesses that trade in neighboring countries whose income is in DOLLARS, and I think over the last 5 years, the policy has been to make sure the shilling is as uncompetitive as possible, regardless of the imports that leak our economy. We are a net importer - meaning our balance of payments is perpetually negative, rather what they call net loser in a layman's language. We loose our wealth. Think of oil, cars, fertilizers, seeds, food, etc, they are bought from the world market in DOLLARS! We are now a net importer of all these products from neighboring countries (potatoes, onions etc come from Tanzania! Nkt!). With how many bags of tea will we be able to afford a barrel of oil? Or a rim for your car? There are people at the CBK that are directly or indirectly getting immersed in this scam, and its driving the poverty to crazy levels never seen before since independence. Visit the countryside away from Nairobi and give me the best scenario, i'll pay you. Disappointed. On 6/13/11, Erick Njenga <eriknjenga@gmail.com> wrote:
I read a very good explanation for this a while back. You can check it out here: http://futurecapitalkenya.blogspot.com/2011/05/benefiting-from-weak-shilling...