Introduction
Unit currency in Kenya is shillings (KSH) which consists of 100 cents. Coins comprise of: 5, 10, 50cents and 1 to 5 shillings. However, bank notes are in domination of: 5,10,20,50,100,200,500 and 1000 shillings. It is illegal to import or export Kenyan currency but foreign currency is unlimited and does not have to undergo checking or confirmation upon arrival in the country. (Classic Escapes)
Banking system is facilitated by various foreign exchange bureaus (Forex) and ATMs which are available in most areas in urban centers with business operations from 9.00am to 3.30pm during days of the week and 9.00am to 12am on the first Saturday of the month. There are also normal banking services at various airports which operate 24hrs Forex Bureaus Services. (Kenyan currency)
Main body
The recent rate of inflation has increased from 28.4% in October 2008 up indexing to 29.4% in November 2008.This is according to the research conducted by Kenya Bureau of statistics which also show a decrease from 13.0% in October 2008 to 12.3 % per cent in November 2008 on food items from consumer price indexing (CIP) basket. The rise in rate of inflation is due to increase on food costs, and petroleum products among other basic commodities. (Afrique en ligne)
In conjunction to that, there is indexing project in Kenya which is conducted through a computer based index since the year 1980 which entails the cultural affairs including the country’s music, dance and literature. The recent indexing began in the year 2001 and includes: looking for information and identifying articles from various sources and listing important articles. It also entails relevant copies of articles and archives with four indexes studying the article, with one organization responsible for administrative issues. (The Kenya indexing project as of sat Dec 13 2008)
Price control in Kenya is done by the ministry of finance under monopolies and price Commission of Kenya which is responsible for enforcing competition principles and guidelines in reliance to respective of restrictive trade practices, monopolies and price control act contained in the constitution. The commission is also allowed to provide advice information to the government regarding trade competition and legal act implementation. In order to achieve its objective, it takes the responsibility of: ensuring that the market structure is regulated, ensuring that the markets meet the required conduct, and compliance enforcement. (Ministry of finance Kenya)
Kenya is a sovereign republic government where democracy representatives and their deputies are elected by the citizens based on legislation.It is headed by the president with his appointed deputy vice president (Oindex mundi). The president shares powers with the executive Prime Minister after broking power at the height of post election violence. However, the powers of the government are composed of executive, the legislature and the judiciary. The legislatures as an arm of government are responsible in making the law and involve President and the cabinet minister with various responsibilities. The judiciary is composed of the high court of Kenya with various junior courts being created in various towns to facilitate justice.
Kenya government budget deficits was approximated to 5.3% percent of gross domestic product (GDP) in 2007 to 2008 which is high but appropriate because it contributes to economy growth when channeled to development of projects.
Personal income tax are levied in Kenya under the income tax act which was amended and came into use on 1st January in the year 1974 when the east African community management act was dissolved. Its structure entails personal income tax and pay as you earn (PAYE) which are charged at the same scale since 2005/2006 and include:10% 0n KSH 121,986,15 % on amount 114,912, 20 % on the following KSH114, 912,25 % on amount Ksh114,912 and 30 % on income above KSH 466,704 per annum.(Bernadette Wanjala)
Gross domestic product (GDP) in the year 2006 stood at US$ 17.39 billion per capita of which when adjusted in accordance to purchasing power parity (PP) terms the new gross domestic product was US$ 1, 200.However, in the year 2004 gross domestic product GDP increased up to 2.3% percent and towards 2005 to 2006 the major increase was experienced at 6%.With the expansion of tourism, transport, and recovery in Agriculture which is in the due process , the gross domestic product per capita is expected to increase with high percentage. (Economy of Kenya)
There has been poverty drop down for the past ten years at the rate of 10% from 56% in 1997 with urban areas recording a major decrease from 51.5% to33.7%percent according to information disseminated by central Bureau of statistics (CBS). However, the country still stands at risk of regression if it does not maintain economic growth of 6% every year. On top of that, Kenya’s economy increased at 6% in the year 2006 from 5.8% percent in the previous year. (April 27, 2007 Economy of Kenya)
Since independence the economic growth in Kenya has been uplifted through public investment, encouragement of smallholder agricultural production and incentives for industrial investment of which annual average of 6.6% from 1963 to 1973 leads to gross domestic growth.However, the Kenyan economy in 1980s and 1990s has been very low where the growth was estimated at an average of 1.5%in 1997 and 2002.This was below the population which stood at 2.5 % every year resulting to decrease in per capita incomes. The economy had a recovery from 2002 recording 2.8% increase in 2003, 4.3% in 2004.5.8% in 2005, 6.1% in 2006 and 7.0% in the following year. The economy has currently decreased at high rate due to the post election violence that rocked the country at the beginning of the year 2008 leading to the high rate of inflation and increase in poverty among other social and economic issues. (Bureau of African Affairs June 2008)
Industry in Kenya helps to increase gross domestic product (GDP) at an average of 18% of which the industrial sector being composed of major industries including: Small-scale consumer goods producers which may combine plastic, furniture, textiles soaps, cigarettes and flour.)In addition to that, Agricultural processing industry, oil refining and cement industry form part of small-scale industries. However, most of the industries are allocated in urban centers. (Encyclopedia of the Nation: Africa: Kenya)
Kenya has expanded her economic business environment in East Africa becoming one of the countries to advance economies in the region but poor leadership in the past 15 years which had poor policies on economy has greatly contributed to the decline in development and unfavorable business environment.In an effort to provide attractive and improve business environment for foreign investors, the government of Kenya is amending its investment policy and in the near future a private sector development strategy will be introduced where United Nations conference on Trade and Development (UNCTAD) forms part of the reform. Kenya government also allows investment in sectors that help to introduce new employment opportunities, generate foreign exchange with the aim of forward and backward connection in rural areas. (U.S. department of state)
Kenya majorly exports various commodities which include: tea coffee, petroleum products, fish, cement, and horticultural products. (Kenya export –commodities)Agricultural products such as tea and coffee are grown by large scale farmers in various regions in Kenya where the environment and climate is favorable for the crop production.This makes Kenya to be among the key countries in the world that produces the highest quantity of tea for export. For the recent years, Flower has also become a major agricultural product for export in Kenya and it helps the country to increase its economy.
In addition to that, Kenya also imports commodities like machinery and transportation equipment, motor vehicle, iron, petroleum products, resins, steel, and plastics from other trading countries partner (Kenya Imports-commodities)
Presently, Kenya deficit has increased by 97%percent according to the information extracted in the year ended August 2008.The percentage figure which increased to $1.7 billion from the previous figure $ 867 million in 2007.This actual percentage reflects the increase in merchandise that contributed to the increase of Kenya exports of goods and services. At the same duration, there has been trade deficit increase by 22.3% amounting to $ 5.5 billion at the same duration from $ 4.5 billion in the previous year august 2007.Increse on demand for merchandised imports contributed to this with merchandised exports during the period recording a margin of $ 845 million to $ 4.7 billion. (Reuters Africa)
Tariffs in Kenya are being charged through various banks with the aim of increasing the value to a larger range of products and services through tariffs and interest rates.Numerous number of pricing list depending on the package or the products one has, there are applicable tariffs rate which include: lending base rates, intrest rates on overdraft decreased from 20 % to 19 % every year and saving account deposit of 0.5 % to 5 % with fixed deposit of 1.5 %-4.75 %.
References
- Classic Escapes “Money Matters” (2008)
- Kenya Currency “How far will your money go in Kenyan Shilling?” (2008)
- Ministry of Finance- Kenya “Monopolies and Prices Commission” (2008)
- Index Mundi “Kenya Government type” (2008) Web.