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A Story AYA

What Was Mentioned This Week?

—Stagflation

What’s that?

Stagflation is a mash-up term combining the words stagnation and inflation. Stagflation is an economic slowdown—stagnation—while inflation persists. The inflation rate is high. The economic growth rate slows. Unemployment remains steadily high.

What is Inflation?

If it feels like your ‘moolah’ doesn’t go quite as far as it used to - or it goes faster for the same products - you aren’t imagining it. That’s because of Inflation. Inflation describes the gradual rise in prices and slow decline in purchasing power of your money over time.

For instance, imagine going into your supermarket with a KES 1,000 note - and buying the same things you used to buy. Less or more? Now, that’s inflation.

What’s Kenya’s Inflation Like?

Practically, inflation occurs when prices rise across the economy, decreasing the purchasing power of your money. Kenya’s inflation hit a 27-month high in May on the back of a jump in the price of essential items like cooking oil, food, fuel and soap, squeezing household budgets and demand for goods and services. The cost of living measure rose to 7.1 per cent in May from 6.5 per cent the prior month, KNBS reported.

“This has forced many households, especially in the low-income segment, to reduce their shopping basket in an environment where firms have frozen salaries as they recover from Covid-19 economic hardships.” ~Business Daily

Back to… Stag-what?

Stagflation. Let’s say the economy is malfunctioning - Prices keep soaring while economic growth — the rate of increase in the output of goods and services — slumps. The lack of economic growth over time can lead to higher unemployment. Overall, stagflation defines “a macro economy that’s not working very well.”

What’s My Life Got to Do With This?

As of June 2022, most of the world is not in stagflation, but it’s likely coming, alarmists, warn. People are generally happier when the economy is booming and prices are low. Usually, when inflation exceeds some level, the central bank will raise interest rates, making it more expensive for households and businesses to borrow money, which discourages spending and tamps down price increases.

People are generally happier when the economy is booming and prices are low.

That all becomes harder when the population is convinced that inflation is here to stay, which then forces the central bank to raise interest rates more aggressively to try to bring inflation under control, which can slow growth even more dramatically.

You said Alarming?…

YES. Covid. Russia. Global Supply Chains. Global Challenges… Name them. The global economy is experiencing inflation rates not seen in decades.

Why is Stagnation Hurting?

Inflation and weakening growth could trap the global economy in a years-long slump. Persistent challenges could harm consumers and employers alike, settling world markets into a downturn that they largely avoided when the pandemic first struck.

So, What’s the Solution?

The conventional wisdom on solving stagflation is to deal with inflation by raising rates and sacrificing economic growth and higher unemployment.

“The rise in inflation was mainly due to increase in prices of commodities under food and non-alcoholic beverages (12.4 per cent); furnishings, household equipment and routine household maintenance (7.9 per cent); transport (6.4 per cent) and housing, water, electricity, gas and other fuels (6.0 per cent) between May 2021 and May 2022,” KNBS managing director Macdonald Obudho said in a statement.

But the bottom line is that stagflation is coming. Globally!

Tiny AYAs

• 14,460 jobs are up for grabs as TSC fills staffing gaps. ~Nation Digital

• Dennis Wahome moves to court to block Sakaja from governor race

• Uganda has made an about-turn and relaxed the tough import conditions it has set for vehicles aged over nine years entering Kenya.

• WASH-WASH PARADISE. Where fraudsters thrive, roam freely. Read the Nation Report on why Kilimani, Kileleshwa, Riverside Drive and Westlands — home to upper-middle-class Kenyans — have now turned into safe havens for the purveyors of dirty money.

• Lloyd's reinsurance broker MNK Re has set up a Kenyan subsidiary

• KUCCPS To Fund 123,963 2021 KCSE Candidates In Universities, 5,278 To Join TVETs By Choice

• Kenya seals deal for cheaper Saudi fuel...

• Meta Wants Case Filed in Kenyan Court by Former Employee Dropped

• BITCOIN wallets having from 10 bitcoins (BTC) to 10,000 bitcoins have seen significant growth in the last couple of weeks.

• Nyeri is the Mount-Kenya town with no mall or pizza shop. Lost its mojo?

• Tanzania's Taifa Gas Licenced to set up a plant in Kenya... At Dongo Kundu…

• Amber Heard is in serious trouble: Income from all her movies is not enough to cover her debt with Johnny Depp

• Roe v. Wade. The US Supreme Court has ended the nation’s constitutional protections for abortion that had been in place for nearly 50 years in a decision by its conservative majority to overturn Roe v. Wade.

And Also… These…

• Rare Earth

  UK company to buy 71pc of Homa Bay rare earth project.

  Kazera Global says it has signed an agreement to spend £750 000 (Sh108.16 million) in buying a 71 per cent stake in Great Lakes Graphite which has interests in rare metal mines in Nyanza.

• International Financial Center - The Silicon Savannah

  Slated to officially launch in June. Firms seeking to join the International Financial Center are required to pay a certification fee of Ksh. 1 million (around $8,620) and an annual fee of Ksh.500,000 (around $4,310).

  Startups still in the seed-funding stage will enjoy lower joining fees of Sh100,000 (around $862) and a similar annual fee, for a period of three years.

Hot on Business

Ornamental Birds.

"They are sold for between Sh6,000 and Sh12,000 a pair, whereas guinea fowls go for Sh4,000 to Sh8,000 per pair, depending also on the variety." ~Titus Kiptoo. He has been minting cash-rearing ornamental birds such as guinea fowls, turkeys and gees.

AYA Tiny Thought

The position you find yourself in determines the options available. Almost all the options available are positive when you put yourself in a good position. When your position is bad, however, almost all the options available are negative. That's not to say good outcomes can't come from a bad position, but there are no points for playing on hard mode.

There is always something you can do to improve your position;

• You can’t predict what will happen tomorrow, but you can improve your position by sleeping, eating healthy, and working out.

• You can’t predict what will happen in your job or life, but you can improve your position by always having a little bit of money on the side.

• You can't predict if you will get a promotion, but you can put yourself in a position to get it by acquiring the skills you need before it becomes available.

Good positioning lets you control your circumstances. Poor positioning lets your circumstances control you. When you are forced to act by circumstance, a chain reaction of increasingly poor choices follows.

Interior Logic → "You have to be content when a path that you’re pursuing turns out not to be rewarding. It’s a journey in that sense."

AYA Photo of the Week

FBV WP house in Porto Feliz, in the green expanses of the state of São Paulo, is one of Gabriel Garbin and his architecture studio’s most recently finished residential works.

And Lastly AYAs….

Here are 10 CHEAP (and pretty easy) Africa Business Ideas:

1. Become a REAL ESTATE agent anywhere in the world selling attractive real estate units in Africa to the Diaspora and other international investors (Watch this space!!)

2. Create a Medical Tourism Network - Medical Tourism within Africa is TRENDING!

3. Help successful business owners in Africa to create more FREEDOM through HR or sales processes & software.

4. Start a Mystery Shopping agency - test African tours, hotels, restaurants and banks (BIG GAP!). They depend on quality service delivery to stay competitive!

5. Write marketing and sales copy for the hospitality or financial industry (HUGE NEED!) or train a team. The lack of marketing & sales expertise in Africa is huge, and is a top hurdle for the tourism industry and brands.

6. Provide packaging advisory to manufacturers in Africa, so they can become globally competitive (HUGE NEED)!

7. Start an agency for mental health practitioners (GROWING DEMAND!)

8. Provide landscaping design and services to hotels, restaurants, corporations, and wedding venues (Big GAP!)

9. Start a cyber security training company and focus on the financial or infrastructure industries (HUGE NEED!)

10. Provide business processes outsourcing services to struggling companies worldwide. Africa has a cheap professional workforce (TRENDING!)

Oh and a bonus: 11. Provide farm management expertise to commercial farms already successfully producing for EXPORT.

~Africa Business Academy

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