Editorial

COST OF LIVING

Kenyan shilling at lows, where tourism gains

Differences in opportunities and dangers after only one year

22-01-2024 by Freddie del Curatolo

For many years, starting before the pandemic, for tourists or those who visit Kenya for several months, or on several occasions, the value of the local currency for convenience was 100/1, i.e. one euro equals one hundred Kenyan shillings. During the year and a half of seclusion, market crisis, and especially for a country like Kenya that is commercially dependent on the US dollar and the inflow of fresh cash from tourism and business travellers, the shilling depreciated until it reached, in January 2023, the then record-breaking figure of 120 against the euro and 110 against the dollar.

However, even in the last season, we went ahead and considered the ratio 100 to 1, for convenience of counting but also with slight satisfaction, on the part of those arriving from Italy, in knowing that the prices of everything, in the end, were still lower than calculated.
After only a year, the devaluation of the African currency is so visible and its progressive vertical fall seems so unstoppable that today, with the exchange rate at 176 and destined still to rise, the prices of everything have to be completely recalculated and, in the face of the country's inevitable inflation, if for those who live there it is half a drama with the fear of a future default, for the tourist who plans a holiday not of the all-inclusive resort kind and for those who come to get away for a few months from the cold and the boilers of the Italian winter, everything becomes cheaper.

This is why many facilities that are sold online, as well as safaris and other services, have little by little replaced their rates in shillings and are charged directly in dollars or euros, and as far as the European currency is concerned, even the rentals of villas and flats in Malindi and Watamu, for example, are expressed in euros. In the latter case, the increases do not always correspond to the increase in the cost of living in Kenya, but are in fact an adjustment to the exchange rate, which, however, for those who reason in shillings, should not be the case (unless one exports earnings abroad).

But here we are not trying to pick anyone's pocket, because Kenya also carries other ballasts, such as those of the tax burden which, while still far from the Italian peaks, is becoming more aggressive and diversified every year, considering also the price of bureaucracy (read 'corruption').
The fact remains that when one goes to the market, for example, one finds relief in no longer recalculating prices 100 to 1, but almost half.

Imagine a holidaymaker returning to Kenya after a year, at the same time, mid-January then.
Last year with 1 euro he bought a kilo of tomatoes (which in Italy he paid 1.5 euro), while today they cost him 60 cents. This is the case for almost all vegetables, as can be verified on Ismea markets.
Not to mention fish, a food for which there is already an incredible discrepancy in price between Italy and Kenya. Today a snapper (which here is the red snapper) in Italy costs 24 euro per kg, on the Kenyan coast a tenth (kes 400). The same is true for yellow fin tuna, while sole costs as much as one fifteenth. The average shrimp in Italy costs 22 euro per kilo, in Kenya 6 euro, squid 22 euro, in Kenya 5, octopus 24 and in Kenya 4 (data from pesceonline).

All in all, life in Kenya and for Kenyans is more expensive, and this may also lead to internal problems that need to be solved, because although it is a worldwide trend to widen the 'fork' between the rich(ss) and the poor(ss), Kenya had recently embarked on a development towards a levelling off of first wealth and the creation of a middle class that now risks being compromised, and it is always difficult and dangerous to have to give up the minimum needs and comforts one had acquired, including real estate purchased with loans that cannot be continued and work and investment projects that cannot be honoured, except by adding more debt.

At this point, tourism, which is definitely worthwhile for those who choose Kenya this year, also becomes a boon for the country and its people, especially for those who visit this country responsibly.
For example: go to the market to buy fruit and vegetables, and not to the supermarkets of the big chains or the already wealthy traders, try to skip as much as possible the steps between the seller and the buyer, and above all give credit to those who work and not to the many 'beach' profiteers of the moment.
Because for them, who have always lived by the day, the shilling is always worth the same: it is what they manage to scrape together without either resilience or respect for those who get up every morning and go to work for themselves and their families.

TAGS: prezzicostoinflazionesvalutazionescellinovacanzeturismo

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