The Kenyan Shilling has been shedding against the dollar over the last year with one greenbuck trading for 160 units of the local currency at specific moments on January 16.
However, despite growing concerns over the further depreciation of the Shilling and its impact on the cost of living, some Kenyan businesses have not felt the economic pinch; infact, the situation seems to favour them.
Some of these businesses in question cut across real estate, export business and the services industry as explained below;
Real Estate
With the dollar becoming more dominant against the Shilling, select landlords in Nairobi and major towns are among the biggest beneficiaries.
This is because they charge rent in dollars as opposed to Shillings.
The charging of rent in dollars became a popular trend in 2022 when the Shilling began to drop in value. Most property owners who charged in dollars are those with rental and commercial space within posh estates.
Posh estates within Nairobi mostly host multinational companies hence the move by landlords to charge rent in dollars.
According to Knight Frank's Africa Offices Market Dashboard report covering the July to December 2023 period, landlords were renting office space at USD13 per square metre.
For instance, with the USD13 rate, tenants are currently paying Ksh2,102 (when the dollar is trading at Ksh160) in comparison with January last year when they paid Ksh1,599 (when the dollar averagely traded at Ksh123).
"The continued depreciation of the Kenyan shilling, driven partly by the increased demand for the US dollar, has increased landlords’ preference for rent payments in US dollars," read the Africa Office Market Dashboard 2022 report in part.
In real estate, short-term accommodation unit owners renting in dollars are also making more money due to the Shilling's depreciation.
Export
On the other hand, Kenyans exporting products to America and Europe are also making a tidy sum. This is because international trade is done in dollars.
Already, some of the exporters in the country have recorded increased earnings owing to the depreciation. Some of the big beneficiaries have been tea and avocado exporters.
For instance, Kenya earned Ksh29.7 billion between February -March 2023 in comparison with the corresponding period in 2022 (Ksh 26.9 billion) despite producing less tea for exports.
This is because the dollar traded at Ksh127 between February to March 2023 as compared to Ksh113 ( February to March 2022).
Some of Kenya's main exports include coffee, flowers, and avocado.
Private businesses in the fashion and textile industry have also benefitted in some ways from the Shilling's depreciation.
Workforce
Kenyans working for international organisations who are paid in dollars have also ridden on the wave, by virtue of being able to convert and get more Kenyan Shillings for the same salaries that they got before the local currency started shedding.
For instance, if an employee is paid USD 1,000 per month, they are currently taking home Ksh161,750 per month in comparison with Ksh123,000 in January 2023 (when the dollar averagely traded at Ksh123).
Biggest Losers
Some of the biggest losers have been importers. With the dollar gaining, importers have had to fork out more money to ship products into the country.
Therefore, with the high costs of importation, importers have been forced to pass down the extra costs to Kenyans, making the costs of products shoot up.
Some of the products that have been affected include fuel and motor vehicles.
