By Jackson Okoth
Most people find it ironic that while monthly inflation figures have been dropping since January 2012, the decline in the general price levels does not appear to be reflected in the pockets of many individuals, households and businesses.
For instance, inflation rate slowed for the ninth consecutive month in August, to 6.1 per cent from 7.7 per cent in July.
However, the price of fuel has begun its upward climb, effective from last Friday midnight, pushing up cost of goods and services produced locally.
“Most people spend a lot of their money on food. Therefore, their perception around inflation is on those prices which whilst lower, have not slumped enough to make a compelling impression,” said Aly Khan Satchu, an independent financial analyst.
Figures from the Kenya National Bureau of Statistics show that prices fell by 0.3 per cent in August, a margin considered too small to have any impact on the wallet of average man on the streets.
“I used to spend Sh4,000 to cater for my household shopping expenses. This figure has now moved to Sh8,000 despite the fact that I am still a bachelor. I do not therefore feel any impact of this drop in inflation numbers,” said Antony Githendu, a marketing executive at the Kenya Institute of Management.
He added that while the price of fuel has been dropping, this trend is not been reflected in the cost of public transport. Moreover, rent is also on the rise as landlords react to Nairobi City Council’s aggressive efforts to collect, and pursuit, land rates defaulters.
There must be something wrong with this free enterprise economics. While inflation figures are dropping, we are yet to feel any big drops in food prices or transport costs,” said Tom Rongo, a tax consultant.
Figures from the statistics agency shows decreases in the prices of tomatoes, milk, potatoes, maize flour, cabbages, carrots, spinach and onions between the months of July and August. However, there was an upsurge in electricity prices pushed up by fuel cost adjustment and foreign exchange charges.
Housing, water, electricity, gas and other fuels’ index went up by 0.80 per cent between July and August. The increase resulted from significantly higher costs of electricity, house rents and some cooking fuels, despite the fall in the average prices of kerosene and cooking gas.