As a wave of Christmas fairs threatens to break over us Nairobi residents in the coming weeks, where (having been charged entrance) we will be bowled over by rafts of handmade sheepskin boots, chunky recycled wood furniture and quilts, jams, soft furnishings from Bali, oil paintings by expats, pricey jewellery, imported swimming costumes, Masai Christmas decorations and countless creative gift ideas using locally sourced materials, I wonder where we are left in light of the global economic crisis and the credit crunch here in Kenya?
The answer is - for now at least; we are doing pretty nicely thank you very much! The main reason for this, as far as I can see, is that ‘credit’ is not a facility that we have ever really enjoyed in East Africa. As a self confessed shopaholic I feel that by living in Africa I have had a narrow escape. Apart from annual visits to England where I shop like an absolute demon (sorry again to UK friends and family for my totally obsessive behaviour when I am home!), living here in Kenya we are positively restrained. It is true that there are ever more shops offering us a greater choice of things to buy locally but most of the time we resist because we know that the goods are twice the price of those available home (due to import taxes) and most of the time we simply can’t bear to pay over the odds.
Here we work with cash, old fashioned cheques and an overdraft limit of exactly 0.00. Go one pound/one hundred shillings into the red and you will be informed by your bank via text message to correct your balance the same day. We also pay the bank a monthly service charge for the pleasure of handling our money. Debts are not allowed except with prior approval and in those cases vast interest rates are charged (for example, mortgage rates are 12.5%). Of course it is possible to get a local credit card with very strict limits, but most keep these only for corporate use. When booking a holiday, the cash must be right there in your account before you even contemplate it. People here live within their financial limitations because there is little choice to do otherwise. The end of the month usually means cooking more pasta and surviving on store cupboard staples. As fuel and food prices rise we must adjust our budgets accordingly. You learn to stop writing cheques when your account gets dangerously low and everyone I know has been in a situation where they have had to put things back on supermarket shelves due to a shortage of cash in their wallet. There is no shame in this.
For now, the property market here is booming; apartment complexes and shopping centres are still popping up as if by magic. New roads are being built, businesses are expanding. (Oh, and I don’t want to rub it in but the sun is shining too now that the rains have passed!) I know that the economy here is regularly hammered; most recently by post election turmoil in January which put the country back a few years in terms of economic growth, but also by frequent foreign office travel advisories warning tourists to stay away for fear of terrorist attacks. Doing business in East Africa is fraught due to the lack of infrastructure, specialist skills and an unhealthy abundance of corruption but for now, being in an ‘emerging market’ seems for once, very much the place to be.