The Kenyan shilling has been rated as the world’s worst performing currency by International Monetary Fund data, after having lost 20% of its value since January. Caasi Sagalai reports on how Kenyans are coping.

As recently as January Jackie Buyanzi, a young mother of two, could walk into a supermarket with 1000 Kenyan shillings (KES) - the highest Kenyan currency denomination, equivalent to eight euros - and buy enough provisions like maize flour, cooking fat, sugar, meat supplies and vegetables to last an entire week.

Today that amount of money would not sustain her family for more than two days.

‘The price of sugar and maize flour have doubled, two kilos of maize flour cost KES 75 (€0.60) in January, now it’s KES 130 (€1). Surely KES 1000 is nothing, look at what I’ve just bought, two kilos of both sugar and cooking oil at over KES 800 (€7) and the money is gone it’s ridiculous. In January I would have spent half of what I’m spending now. Where are we headed? ’ Buyanzi moans as she carts a trolley with the two items to the super market counter.

World`s worst
The Kenyan currency has lost its value by up to 20 per cent against major world currencies since January this year.

‘I understand the world is experiencing hard times, but surely how can the shilling be the world’s worst performing currency?’ wonders Ponders Buyanzi.

The majority of Kenyans live on less than a euro a day. In January this year the exchange rate averaged at KES 75 against USD $1. In the last couple of weeks, this has gone up to as high as KES 107 against the dollar, raising prices of essentials, especially imports. Meaning Kenyans have to dig deeper into their pockets than their African counterparts.

Attempts by civil society organizations to organize protests like in neighbouring Uganda have been largely unsuccessful.

Full of regrets
Luke Makori a taxi operator, who had envisioned buying another car to boost his business, is full of regrets.

‘ I had intended to buy the Toyota IST( car model ), it’s unfortunate, I didn’t see this coming; it was retailing at KES 600,000 (€5000) in January this year, now it costs KES 800,000 (€7000 ). It’s unbelievable! I wish I would have bought in January. This reminds me of what happened in Zimbabwe some years back, we are headed there,’ Luke moans resignedly, throwing his hands in the air.

Kenya’s central bank blames commercial banks for the situation, accusing them of holding onto the foreign exchange the central body has been directly selling to them. This hoarding holds importers at ransom since they need the foreign exchange to facilitate business, and the commercial banks sell it to them at exorbitant rates to rake in profits, exacerbating the situation.

Boost food production
Ordinary Kenyans are not familiar with the intricacies of currency economics. Some blame upcoming elections in 2012 for the wobbling currency, indicating this may be a scheme by politicians to raise campaign money.

Everything has gone up in price. Severely hit is also the health sector, only last year the cost of treating breast cancer at the national referral hospital for example was KES 500,000 (€4000), now it is approximately KES 650,000 (€5500).

The president has assured Kenyans that government agencies will implement measures to stabilize the shilling. The central bank governor has said the process of stabilization may take up to six months.

The government has announced plans to boost food production as an intervention, in order to reduce imports and the demand for foreign currency to pay for them.