Kenya is facing significant development challenges due to incoherent policies and unintended consequences of certain political agendas. The high cost of living in the country is a direct result of these issues [cc972b3c] [7190dd7a]. Incoherent policies and the failure to implement viable strategies have led to predatory behavior by public servants and cartels, adding pressure to the economy. This behavior has also been adopted by the private sector [cc972b3c]. Additionally, agricultural policies have failed to support local production, leading to import dependence for products like wheat, rice, maize, and others. Subsidies meant for small-scale farmers do not effectively reach them, and local cartels hinder access to subsidized fertilizers. The import of products that could be produced locally is dominated by vested interests. Insufficient policy reflection and lack of incentives contribute to high production costs [cc972b3c]. The unintended consequences of certain policies, such as the implementation of the Kenya Kwanza manifesto and the Bottom-Up Economic Transformation Agenda, have also contributed to Kenya's development woes. These policies have faced hurdles in achieving priority targets like bringing down the cost of living, eradicating hunger, creating jobs, expanding the tax base, and improving foreign exchange balance [7190dd7a]. Interventions like introducing a mandatory housing levy and doubling Value Added Tax on fuel have resulted in high fuel prices and a decline in fuel consumption. Kenya's debt has also grown significantly, with increased borrowing and spending. The plan to lower the cost of living through importing duty-free goods has not worked as intended, and the switch from the Open Tender System to direct procurement for importing fuel has caused job losses and revenue reduction. The Hustler Fund, aimed at supporting micro, small, and medium-sized enterprises, is facing a high default rate, and the promised reduction in the cost of electricity has not been realized. Economists suggest that reducing taxes and interest rates could have a significant impact on the economy [7190dd7a]. Addressing these challenges requires political commitment and determination [cc972b3c].
Despite these challenges, Kenya has seen a surprising surge in vehicle registrations amidst price hikes. Despite inflation and rising production costs, vehicle registrations in the country have increased in the first nine months of 2023. The production cost of cars has risen, leading consumers to sell their old vehicles to developing nations. Kenya's weakening currency has also driven up the cost of imported vehicles. Trailers saw the largest increase in registrations, followed by minibuses and pickups. Rising fuel costs have been an additional challenge for Kenyans, leading some to cross the border to Tanzania for cheaper gasoline [541ae02e].
According to recent reports, despite Kenya's inflation, the number of registered vehicles in the country has increased in the first nine months of 2023. Kenyans registered 72,982 vehicles, up from 57,978 in the same period last year. The rise in vehicle acquisitions is attributed to financing arrangements by banks and other financial institutions. The cost of imported vehicles has increased due to the production cost and the weakening currency. Trailers saw the main increase, followed by minibuses and pickups. Kenyans have also had to deal with rising fuel costs, leading some to seek cheaper fuel from Tanzania [88398cc7].