The Kenya Shilling Vs The US Dollar...The battle begins

A wise man once said that, one man's meat is another man's poison. I believe the vice versa is also true. As we noted last week, when it comes to business, many people tend to shy away. Specifically when those long economic terminologies are advanced and you wonder how as a layman you are supposed to figure them out and interpret their meanings. That is why Thika Live has adopted a simplistic direction in breaking down complex business jargon for the common Wanjiku to understand. Last week on such a day, we analyzed how interest rates affect you as a common mwananchi and we noted that there is a direct relationship between interest rates and consumer prices for those basic commodities.

Today we are shifting the focus to another aspect of the economy that many of us always ignore since we don't understand its basics. In the business news you will always hear of the performance of the Kenyan shilling against the dollar, the shilling was sold at 84 and sold at 83 in relation to the dollar and etc. You wonder how this affects you since literally you have never traded using the dollar. As long as the Kenyan shilling can be accepted over the counter in your local supermarket and as long as your employer pays you at the end of the month, then you have no business knowing how the shilling performed. But do you know that as a consumer this affects you directly. Quick reverse of gears to late 2011 when there were reports of the Kenyan shilling sliding to its historical lows. That was felt in all aspects of the economy. Let me start with a brief introduction on the Kenyan shilling.
After the abolition of the East African shilling in 1966, the Kenya shilling was adopted as the legal tender meaning that it was the legal unit of exchange in the country. The shilling's value is determined in relationship with other currencies mainly the Dollar,Euro,the Sterling pound, the Chinese Yen and others. Since1995, the Kenyan shilling has been a fair performer. In the early 1990s when the Anglo Leasing scandal hit the economy, the Kenyan shilling hit its lowest levels. The Anglo Leasing scandal caused the government to fork out billions in paying out non existent transactions. The effects of this massive economic rip out are still felt decades later.

Since the ascent of the Narc administration, the shilling gradually improved, coupled with positive growth of the economy to single digits figures. By late 2010 and early 2011, the shillings performance was at its best until hell broke loose in mid 2011. The shilling surpassed the psychological rate of 100 and plummeted to its historical lowest level. Economical tension gripped all the major spheres of the economy and a bout of blame game arose between the CBK, commercial banks, the NSE, importers and basically all the key players in the economy. CBK introduced policies aimed at curtailing this slide while Parliament started investigations to bring back the shilling to a common ground. Well, nearly 10 months after, the shilling is a bit stable.
As a consumer, what is the big issue about the shilling, Forex exchange and the slide of the shilling?
The relationship between the Kenyan shilling and other currencies is the exchange rate. This is the number of units that person A can get if his currency is converted into person B's currency. If you are buying an ex-UK vehicle you will need to convert your money into the selling currency. This conversion is governed by a rate: the conversion rate. The higher the rate to your disadvantage, the higher the price you will need to pay.  This rate is the link that our economy has with the global economy. The trade-ins between different currencies is called Forex exchange. So the Forex table that the News presenters read during business news is how the currencies interacted on that particular day.

So, when is the shilling weaker or stronger??
When the shilling is maintaining stable rates in relation to other key currencies,then its said to be strong and the vice versa is true. This means that when the shilling reached lows of 106 in 2011, then it was treading on weak grounds. Currently its trading at levels of 83 in relation to the dollar which means that its a bit strong. When its treading weakly, then the currency is considered devalued. Which means that if you have 1 dollar, after conversion you have around 106 shillings. This means that a Kenyan businessman who wants to buy a machine whose price is quoted in US dollars, will have to fork more when then the shilling is weak than when its strong.
So during the Forex meltdown last year, what the hell took place???
To answer this question, we have to first understand the type of economy that Kenya operates. The Kenyan economy is mostly consumer based. That explains why at mid month most of our bank accounts are very empty. Relatively the Kenyan economy is a heavy reliant of the manufacturing and agricultural sectors. Of all the countries in the East African Community, Kenya is the most vibrant as far as agriculture,manufacturing, technology and service sectors are concerned.
Lets narrow down to the manufacturing sector,
Most of the inputs into the manufacturing sector are mostly imports. Most of the heavy machinery and raw materials for most of Kenyan manufacturing firms come from Asia and Europe. This means that they are always valued in foreign currencies specifically the US Dollars. On the other hand, until recently Kenyan had no oil reserves. Even if we discovered oil in Turkana, that is more than 7 years from being viable. These oil imports from the Middle East, North Africa and Europe are globally priced in US Dollars. This means that our manufacturing sector is a heavy user of imported goods.
For the Kenyan manufacturer, he needs to purchase these imports using the US Dollars. If for one US Dollar he is expected to fork out 106 shillings, what if the cost of heavy industrial machinery is fixed at $45,000..that's is a cool Kshs 4.77M. What if the exchange rate is at 83.00, that translates to Kshs 3.735M
The more than 1 million difference is unfortunately settled by the manufacturer. You can then imagine for an economy that has daily imports worth billions.

If we shift to the agricultural sector which is Kenya's main sector, its worth noting that importation of fertilizers is inevitable. The fertilizer prices always quoted in foreign currencies will tend to be higher when the shilling is weaker, meaning that the Kenyan farmer will incur more when buying the fertilizers. Most of the agricultural products are either produced for the local market or export, meaning that to recover these higher importation costs then the farmers will have to raise the commodity prices for these agricultural products.
In the last two paragraphs we have talked of imports; these we acquire from other countries either because we don't have them or they are not enough. After production, Kenya will either use the generated products locally or export them.
But what happens to our exports with a weak shilling??
After importing fertilizers which was charged at a lower shilling in relation to the strong dollar, then the farmer incurs more..However after production of ,lets say coffee, he goes to the international export market where he is supposed to price the coffee in dollars. Then he will have a 500g packet of coffee valued at 600/= priced at only $ 5.66 when the shilling is weak at the rate of 106.00. However if the rate is at 83.00 it will fetch $7.22, a difference of $1.56 or Kshs165.36. The Kshs 165.36 is the Forex loss that the farmer undergoes as a result of the weak Shilling. Just imagine if he had a container of coffee for export, that would be millions of undeserved losses.
Basically, in international trade, when the import bill of any country is larger than its export bill, then the strain is felt on the country's currency. To bridge economic scarcities in any economy, its imperative that the export bill should be able to fully finance a country's import bill. No one loves the scenario where you buy a lot from someone while at the same time he is buying less from you. This, in economic terms is the current deficit, which is a key component of measuring a country's economic growth. This is where the latest discovery of oil comes as a relief, since all major economic components directly or indirectly are subject to oil prices.

So what brought the crisis?
When the Kenyan shilling hit low bottom, its volatility increased and as an investor you will tend to choose the least volatile currency. A volatile currency is not reliable for any investor. This volatility sent cold shrills down the spines of investors in Kenya. So what did they do..when it hit psychological levels of 100,speculators mainly banks and other investors held their investments in dollar currency accounts which in economic terms is known as hoarding dollars. This was in preparation for the big kill that lay ahead. It was obvious with such a historical drop,it was more likely that the shilling would still depreciate to lower levels before CBK counter action took full effect. When the shilling hit the 102.00 mark, the offloading started meaning that if you had bought dollars at 85.00 and you were now selling at 105.00, then that was a cool 20 dollars. What if you had bought reserves of like $ 500,000 or Kshs 42.5M when the Kshs was trading at 85.00 ..Then that was around $ 5M, then convert back to Kshs at the rate of 105..Just do the calculation and you get to know how Millionaires are made in minutes.

From the day the shilling hit 100, it was official that the economy was short of dollars. If you visited any bank wishing to exchange shillings into dollars, you were told, 'we do not have any dollars'. So where did the dollars disappear to. Answer, they were in peoples dollar current accounts just waiting for the shilling to go down and they would make millions. In foreign exchange, its called speculation and its legal until it creates shortages in the economy like it did in 2011.
At this point this meltdown of the Kenya shilling had reached the retail prices and bank interest rates,  electricity bills were coming in thousands of shillings, while prices of commodities had shot up.

Gladly, Central Bank intervened, although many fiscal experts argue that it was too late..First it restricted online and automatic trading by banks. All Forex exchanges, would only take place over the phone and only through Central Bank. This means that for the above case, where one is selling $500,000, then you had to go through Central Bank who would decide how much you will get. Additionally with no dollars in the economy and with dollar import prices hitting sky levels, something had to be done. The Central Bank therefore upped the Base Lending Rates for commercial banks.You remember the post about interest rates ?. Bretton Woods aka IMF also proposed a bail-out package. With time the Kenya shilling performance improved and it's surprising and pleasing to note its now trading at  margins of 84.00
So who were the winners in this fluctuations and devaluations of the shilling..Reminds me of the saying, one mans meat is another mans poison..That is food for next Tuesday!
Images courtesy of Google

The flame trees of Thika : Who was Elspeth Huxley

In one of the first posts done about Thika, we traced the root of the name Thika to the wars that the Maasai and Kikuyu had centuries ago. When the early settlers came to Kenya in the 1880s and the early 1900s, they fell in love with the central highlands and its magnificent mountains and rivers. They "acquired"  acres of land where they established either ranches or coffee plantations. Thika was home to numerous settlers who in some areas like Mangu and Gatanga still own acres of land filled with coffee plantations.
Thika has always been a darling to European settlers since in their passage to either Mt Kenya or the Aberdares, they would always pass through the then rugged town of Thika. That explains the emergence of the Blue Post Hotel along the Thika-Nyeri Highway which was the ideal place for the travelers to rest as they watched the cascading waters of the Thika and Chania Rivers falls.
Of all the white settlers that ever graced Thika none is more famous than one Elspeth Joscelin Huxley. Elspeth was a British woman whose family settled in Thika around 1912 with an aim of delving into large scale coffee farming.

At that time, Elspeth was 5 years old. The family, together with some other few settler families established farms in Thika while at the same time trying to adapt to the life in the wilderness with constant attacks from lions and elephants.  Well,the story goes on and on until when the World War broke and the lovely status quo of safari adventure and romance was broken. Huxley went to Britain for studies and later came back to Africa to be employed by the Kenyan colonial government. Later in life, she became a celebrated writer,administrator,journalist,,environmentalist and farmer.

You may be wondering where am heading with such a tale, but later in Life, Elspeth Huxley would share her experiences about Thika with the rest of the world through her best selling novel: The Flame Trees of Thika. The book would later become serialized into a television series. The Flame Trees of Thika was her most famous book of the more than 30 pieces that she penned.

It shares her life as young girl growing alongside the Maasai and the Kikuyu while experiencing the wilderness, terror and the romance that it brought with it. Many events that took place around the time were never or  fully documented thus Huxley's life as documented from her words, builds a visual image of the unique Thika wilderness then. In the 1980s the book was serialized into a television series ,The flames Trees of Thika with seven,50 minute episodes. It starred actress Hayley Mills and was filmed in Central province and Thika in particular. The series was nominated for various awards including the British Academy Television Awards.

 

The episodes start with the promised land, when Elspeth and her parents settled in Thika to the drums of war when the lords of the World War come knocking. Elspeth was a great friend of Joy Adamson the famous writer who penned Born free. The book about the experiences of rearing Elsa the famous lion is one of the most popular African wildlife and classical novel . The book was made into an Academy Award winning movie under the same name. Matter of fact, on Joy Adamson autobiography, Elspeth Huxley did the foreword, highlighting the close friendship between the two environmentalists and writers. Elspeth died aged 89 in January 1997 in England.
Twenty years after, we have the Thika Flame Tree apartments along Garissa Road. The gated community which is 5 min drive from Thika Town consists of 3 bedroom affordable units.


This makes me wonder, does every story about Thika end with real estate development.
In brief,that is the story behind the famous Flame Trees of Thika....the novel,writer,series..and the apartments.

Images courtesy of Google

childhood memories : blast from the past

Just imagine living a day a piece..You wake up in the morning and you cant even remember whatever happened yesterday. Its like you are formatted daily and the moment you wake up, you are just empty and virtually deleted. In short, just imagine life with no memories. Memories of your childhood, college time or the many relationships you have had over time. Go back to the first two words i began with...Just Imagine

I wouldn't want that to happen to me. Reasons being it would erase something that is very close to me..my memories. Over the past weeks we have talked a lot about business, the market in Thika, Real estate, interviews but we cant forget we are humans, beings with feelings and memories.

Personally, my roots are in Thika, born and enjoyed my early childhood in Majengo and later Biafra estates. Those were the best times. The tallest building was the December Hotel while the best rave place was Club Vybster. Biafra Estate is just few metres from Delmonte and I remember as a kid enjoying cans of pineapples every time a train transporting pineapples from Delmonte derailed..And yes the swimming sessions in River Chania although in most cases, i never ventured into the deep waters. Then, there were no residents around the landless area and those were the perfect places to go hunting. So you would find us with our pack of dogs trekking more 15 kilometers to hunt rabbits. Many of the expeditions took place on Saturdays and Sundays.
I would really enjoy the daily laps to General Kago where I was a primary school kid. Tow in tow with my sisters and cousins we would make the daily to and fro treks. Mount Kenya University was still a dream then, so the areas that MKU now sits, had acres of swamps and bushes which were the perfect place for our children games during break times.

Did I mention this big nite..It all happened in the community park in Starehe estate or the garden near the Bible Fellowship Church commonly known as Butu. This was the monthly 'watoto kaeni chini' brought by Factual Films. This would be a night of pure entertainment since we would enjoy movies the whole night. Not to mention the daily spanking the next morning. I was willing to undergo the spanking but missing the free movies..Not me.
On the same grounds we had the Unilever road shows. I don't know where the hell they disappeared to but this was the perfect catalyst to miss afternoon classes. Unilever would give free t shirts, packets of Omo, Blueband and bars soaps to different winners. Well the contest involved dancing on the dais while the public would choose the best dancers. And well, you would never miss me there. I particularly remember this day, that I missed school but went for the show. When I returned home, mum was really waiting for me with dads giant slipper ready for a bashing..But whoa!! That day I never got the bashing,reason being; earlier in the day I had won a big packet of Omo during the kids dance challenge on the road show..Talk of villain turning into hero..I never escaped the beating after all, as a few days later we stole mangoes from Joytown School (boys will always be boys). That night, I received two beatings for the price of one.
Thika has been a great place to nurture soccer. Those days there were no Thika United and Medisca came just a few years later. KTM (Kenya Textile Mills) was the real deal. Thika stadium was the place to be on Sundays. Most of the times we could not afford the 5 bob gate fee so we always headed for the tall walls.
 
Honestly there were some broken limbs here and there after jumping over the walls from the Bus stage stalls but at the end of the day we were town boys and this was the perfect adventure.
Kids from Majengo, Biafra, Starehe and Ofafa were treated with awe and fear especially by those from Kimathi and Section 9. Reason being we were the bad boys and bullies. Many are the times we would walk to section 9 to....you guessed right.. steal mangoes and mabuyuss from Hindu homesteads. A dog bite here and there but we would be back to our normal mischievous ways.

Those days there was no BIDCO and the air was relatively clean apart from the occasional stinking smell from the skin tannery along River Chania.
Many are the times when our mischievous ways ended tragically..I once lost a desk mate in class 2 who died after consuming contaminated sukari nguru that we got from those cargo trains in the railway station near today's Engen. Had this other friend who drowned when we were sharing a swim in the Chania River. But we never learnt..what mattered was the action and adventure.
Let me just stop at that tragic juncture today..
When I met this former primary school buddy when heading to work this morning, the memories about those times resurrected..call it fate but it had been more than 17 years since I saw this dude and I really felt nice reconnecting with him while sharing those childhood adventures.
I guess those are the emotions that cripple you, when you meet such a friend after those many years..since you shared and survived the same childhood and what you have to share today are only memories..plain memories.

pictures courtesy of Google

Move Out of Your Parent's House: Utahama lini???

When I was in campus, I was always so envious of those people who rented their own rooms outside the campus. I would often go to visit my friends who lived outside campus and I would admire their ability to organize their finances in such a way that they could maintain their own house. Let me just say it here before we go any further, it is not easy living on your own. However, it is a necessary step that most if not all of us have to take at some point.
There is no set age whereby you are supposed to move out of your parents home. Without over-thinking it, if you have finished college and have secured a job (even a temporary one), it is time for you to move out. It is as simple as that. Other notions that one must be 25 or some other age to move out is inapplicable. How many times, did you see the advert of NTV asking 'utahama lini?' and felt as if the producers were attacking you??

 If you felt this way, this step by step guide is meant to help you prepare and eventually (read asap) move out of your parents house.
1. Make the decision
This is the most important of all steps. By this I do not mean that you start telling people that you are moving, because I know many out there have perfected this habit. By making a decision, I mean you declare to yourself that you need to move out and make a commitment to this decision.

2. Create a timeline
At the beginning of each year, many of us make resolutions to achieve certain goals by the end of the year. However, we do not set measurable and specific timelines that guide our achievement of these goals. This is the main reason, people find themselves in November, having accomplished none of their new year resolutions. In moving out,set a particular date by which you should be in your own house. For example, a measurable goal would be: 'In 3 months time, more specifically by 1st Oct, 2012, I will be out of my parent's house and in my own house". That's achievable and measurable at the same time.
3. Make living arrangements
Where and how do you want to live? Do you want to rent a house? If so, how big will it be? This will depend with where you want to live and how much you are willing to pay. For example, if you decide to live in Thika town, you might pay 10,000 for a one bedroom while if you choose to live in the outskirts of Thika, you might pay 8,000 for the same sized apartment. This is a key decision and it must be addressed with careful consideration. Additionally, you might decide to live with a roommate and split the costs. This is a good idea for younger first time tenants.
4. Make a list of the things you will need in the new house
In order to make a house livable, there are certain basic necessities that one must buy depending on personal needs. Make a list of things such as mattresses, beds, beddings, kitchen items, Gas, stove or jiko depending on the budget etc. Please note that you do not have to start with everything. For example, you could forego a bed and spread a mattress on the floor if the finances are a little tight. After a few months, you will find that it gets easier and you can buy the rest of the stuff.

5. Work within a budget
One of the commonest financial mistakes that people make when preparing to move out is the lack of a proper budget. Know that a successful move requires money and you can only work with what you have. Moving on a loan is not advisable unless you have a clear-cut plan on how you will pay back. A budget guides you on how much you are willing to spend on specific items.
6. Start gathering items for you house.
You should start gathering the items mentioned in 4 above at least a month before the move. Buy the items you absolutely need and cannot live without. You can also ask for help from parents, sisters, cousins, grandparents, etc. and they can pitch in where possible. You will be amazed at how many items people have in their houses and never use. Don't worry if some of the items are a little old, you can replace later when you are settled.
7. Move
One important thing to note here is that in renting houses in Kenya and mostly around the world, you have to pay a deposit together with the first month's rent. For example, if a house's rent is 6, 000, you will have to pay 12, 000 as deposit and first month's rent. In addition, you might also be asked to pay 2,500 electricity deposit and water deposit too.

Ok, having said this, it is time for you to move. You need transport to move all your items. You may ask your parents for help on this or you can hire a moving truck.
8. Settle 
One last step: yeah  I know you thought that was it. Settle down in your house. There are people who move out and within two months are back to their parent's house.

Please refer to step 1: Make a decision. Do not be the kind of person who goes home every evening for supper or takes their laundry home for cleaning. If possible, cook your own meals and wash your own clothes. This will help you avoid constant trips home and eventual moving back.

Above all, take it easy and have fun. Many have done it and you can do it too. It just takes a little commitment and determination.
Email us at thikalive@gmail.com or post on our Facebook page if you have any question!!
Images courtesy of Google

Interest Rates In Kenya: What you need to know as a consumer.

Many are times that we take things for granted, or to be specific, how many times do you wish there was no Business News segment in our 9.00 PM news. You will find yourself running to the shower,or to the chicken when NTV,Citizen or KTN hit the business segment. You the appear when Wahiga Mwaura is about to present the sports segment. Occasionally from your kitchen you will hear the presenter go on about the Kenya shilling performance against the Dollar, how Bamburi, Kakuzi and others performed on the Stock market..Then he will talk of bank interest rates and you just wonder,who gives a damn about the interest rates.

Wait a minute, from today you should start giving a damn about whatever the presenter is screaming about on interest rates. Why? Because at the end of the end it directly affects you. The Kenyan public is more of a consumer nation and that explains why we are always waiting for the end month or worse off for that MPESA message to pop so as to hit the mall for that new dress or electronic.. If you are in Thika and you form part of this group, stand up, go to the shop and buy that product called Damn..because you should start giving a damn.
The consumer Federation of Kenya is the umbrella body that acts as a check on all matters pertaining to the Kenyan consumers. It organizes seminars and talks that are aimed at empowering the consumer and making them aware of their rights as consumers. It helps cushion Kenyan consumers from exploitative prices, low quality goods and general exploitation by the public and the corporate sector.
Well recently it conducted a survey that aimed at examining the effects of bank interest rates on the general Kenyan consumers.

It was found that majority of Kenyan find interest rates charges by banks to be too high for our economy. This was among other findings that we will forecast in coming articles. Today lets just have a general look at interest and the general hullabaloo about their increases, decreases and well..who cares. After reading this,please start caring. Its the the basic lesson that we should learn since many corporates just take advantage of the general ignorance exhibited by Kenyan consumers.
Basically, what is an interest rate (Thika Live Finance 101)
There exists numerous explanations depending on where you are standing but the most basic is:  Its the amount (usually expressed a %) that is charged for use of an asset( read money). More simply, if I lend you some money, you will return the same money (principal) plus an additional amount (interest) which is a certain percentage of the principal. This percentage is the interest rate. It means that,  if am charging you 10% and Joseph is charging you 15% interest, then you will return more to Njoroge than to me (Reader Beware,am not lending at 10%, its just an example). The principal + interest are payable within varied amount of time and this will always depend on the agreement between the lender and the borrower. I cant think of a much simpler definition..

Lets just go straight to the interest rates in Kenya and their effects on the Kenyan consumer.
In an economy there are those who have and those who do not have..The Kenyan economy is not an Ujamaa economy therefore there exists a line between the haves and have nots. The haves can include your local Shylock, that rich uncle, your Sacco, the local commercial bank, the Central Bank of Kenya (haiya) and on top of the ladder the international donors. We are just talking about the local scene so lets narrow down on the banks. On the other side sits the young entrepreneur who has an elaborate business plan, a local producer in need of funds to expand his biashara etc..Different Banks have different bank rates so its advised that you shop around for the Bank with the most affordable interest rate.
But who determines the Banks interest rates
In Kenya, Interest rate decisions are consultatively taken by the Monetary Policy Committee which is within the Central Bank Of Kenya. In August 2005, the 91 day Treasury Bill (TB) rate was replaced by the Central Bank Rate (CBR) which is the the key ingredient to interest rates charged by banks to lenders.  In Business studies and Commerce, we all learnt of the steps that the Central Bank can take to reduce inflation. Matter of fact interest rates was among the first steps. With the power to set the CBR, the MPC can either raise it or lower depending on the general state of the economy.  Recently the CBR was lowered to 16.5% from 18%. This was after the Central Bank recorded a positive growth in key economic growth indicators.

You are wondering about the relationship between Commercial Banks and the CBR.
Banks are allowed to borrow from one another whereby a bank may need to invest in some stocks, government bills and bonds.The bank could also be aiming to finance their own lending needs.Other banks may be in need of boosting their liquidity margins. Some of these investments mature overnight, others monthly and others may take months. This means that a bank may borrow from another bank to finance such investments. For that, Banks charge interests between themselves which is known as the inter bank Rate.You will find the interbank lending rates moving from one range to another depending on the deals that the banks strike between themselves on inter lending.
However, when Banks cant borrow between themselves, they turn to the big brother.This is why Central Bank is known as the lender of the last resort. When they turn to the Central Bank, commercial banks will be lent money but, at the Central Banks CBR..This means that if the CBR is high, then the commercial banks will pay a higher interest when paying back to CBK.
But how do commercial Banks cushion themselves from these CBR rates.
Its common knowledge that Banks rarely make losses especially after they release the annual statements where they constantly hit billions even when all major economic sectors are making losses. When they are charged high lending rates by the CBK, banks transfer this effect to their customer. That explains why Banks immediately raised their lending rates to margins of upto 25% last year. But the irony of the whole matter is why they wont be quick enough to lower the lending rates when the CBK lowers the CBR..less than 10 banks have done so. The commercial Banks will then price your loan from the CBR charged by CBK. However they never stop there,they will then factor their operational costs for facilitating the loans and their profit mark ups. The result is the interest rate at which the loan is charged .
So..in the long run how does this affects you as a consumer..
Whenever you purchase a commodity, on the other end of the chain( although invisible), there exists a producer. The local economy especially in Thika relies on Small and Middle Income Enterprises(SMEs) for many products.It could be that farmer in Gatanga, the Jua Kali artisan in Makongeni or the middle level industry along Garissa Road.

To finance large scale and quality production, these producers take up loans from local banks. However when they are charged high interest rates, the producers are affected in different ways. It will affect their direct costs since they wont be able to finance their daily operations. Secondly, it will reduce their affinity to borrow more since they already have expensive loans to service.
Kama ni wewe ungefanya NINI?
With an expensive loan to service, with high business operation costs to finance, with the ultimate objective of making a profit and remaining afloat, the business owner will do the obvious. He will increase the prices for his commodities in order to cover his margins. In short, he transfers the high costs of paying back the loans to the consumer through increases in prices. That day you will find your favorite product in the market has an extra 5 bob on top and just like me, you will start complaining. But in essence what is happening is simple, you are feeling the wave effects that started when CBK raised the CBR.

If you thought that the Business News talk about interest Rates and Central Bank stuff does not affect you, then you have a reason to think otherwise. It is your duty as a consumer to know what is going on,and remember ignorance is no defense.
Thika Live encourages all to exercise consumer awareness and for a start Consumer Federation of Kenya would be a nice place to visit.
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Good Day..

images courtesy of Google

Art pieces from BujuSanii: Have a Look.

As promised yesterday, we will showcase some of Buju Sanii artworks. They are just a few of the many pieces that this great artist has to offer.

 

 

 

 

 

 

 

 

There you have it, a one on one with Buju Sanii, this time, not the persona but his  expressions into art.
To book any of his work or if you need an art piece customized to your own personal liking,don't hesitate to get in touch with Buju. Thika Live can also facilitate on the same.
His art studio is in Thika Town, Thika Chemist House, 3rd Floor opposite Family Bank and behind Standard Chartered Bank.
Have a fruitful weekend