As taxpayers brace themselves for the new burden that will come with the passing of the Finance Bill 2023, economists have shared their insights on some of the adjustments Kenyans will have to make.
Speaking to Kenyans.co.ke, Economist Vincent Kimosop highlighted three ways Kenyans could adapt and survive amid the high cost of living.
He observed that the economy is managed using two tools. First, are fiscal instruments like the Finance Bill which are used to control government spending.
The second set of tools, he observed, are used by the Central Bank of Kenya to manage the supply of money in the country.
However, Kimosop stated that at a personal level, Kenyans still have the power to make decisions that can help them manage their finances.
“To manage the economy, you can use two tools, the fiscal tool which the government uses or the monetary tools that the Central Bank does.
“However at a personal level, within the economy, there are things you can also do because economics has several principles,” he stated.
Do Away With a Luxury Lifestyle
The first thing he noted Kenyans had to do was to do away with luxury living. He stressed the focus ought to be on basic necessities and cautioned against spending arbitrarily. According to him, saving money comes in handy further down the line.
“The lifestyle should also change and people can stop consuming high-end products and priority going for primary goods,” stated Kimosop.
His sentiments were reiterated by Bornventure Nyangor, an economist, who warned that going forward Kenyans will be earning much less due to the new taxes fronted by the government.
In light of the latest developments, he warned that Kenyans would not have much wiggle room to stock up on their favourite luxury brands.
“You are going to receive less salary than you used to and it has nothing to do with your employer because the government will be taking more. You are going to have less money,’ he noted.
Find Alternatives to Foods
The experts explained that it was important for Kenyans to explore ways that would enable them to save more including adjusting to alternative foods.
Kimosop advised that one of the options available to Kenyans is to go for less expensive meals that give the same nutritional value. For instance, choosing a different type of protein that will be more cost-effective.
“You should switch the consumption of certain goods. People can go for substitutes, for example, if you were used to eating meat, you can look for a substitute protein,” he stated.
This according to Nyangor was a sacrifice that taxpayers would be forced to make in order to maximise their reduced income.
Businesses Managing Their Costs
Further, Kimosop predicted that if Kenyans spend prudently and avoid buying luxury brands, businesses will also be forced to adjust and manage their costs.
“The other thing you will see is, because businesses will be affected, it will be important for them to manage their costs because of the shift in the operational environment,” he noted.
In a brief ceremony held at State House on Monday, June 26, President William Ruto signed the Finance Bill 2023 into law. Other senior government officials present at the event included; Deputy President Rigathi Gachagua, and Prime Cabinet Secretary Musalia Mudavadi.
National Assembly Majority Leader Kimani Ichung'wah — the bill's chief campaigner in parliament— also witnessed the president assent the bill into law.
