Mismatch between supply and demand cause of high prices

Demand in Kenya has rarely kept pace with supply.  We seem to think it’s only houses that are in short supply. [iStockphoto]

An early morning visit to the Lions Eye Hospital in Loresho, Nairobi finds a long queue with mostly elderly men and women. They are clearly from rural areas. 

The other well-known eye hospital is at Kikuyu, not far from Loresho. 

The same applies to orthopaedic surgery where Kijabe and Wamba hospitals are well known. How specialised are our hospitals? 

Think of clubs around the city centre. We have Nairobi, Parklands and closer to CBD public service club.

Whether looking at leisure or services, demand in Kenya has rarely kept pace with supply.  We seem to think it’s only houses that are in short supply.

Good schools, good hospitals or good clubs are rare - some may even add good wives and husbands.

The mismatch between supply and demand has led to a rise in prices. 

Membership club joining fees have gone up, and so have medical fees. Some are happy that there is more exclusion! 

We take a census every 10 years. Do we put that into planning for the provision of services?

The government can argue it has no money because tax revenues are low. Should the market not have come in to take care of public sector failures?

Should we not have more hospitals and clubs and money thereof?

Some could argue more hospitals, and schools, have come up but quality and standards are wanting. Noted the gyms?

The argument has been, we are not willing to pay for quality. There is a widely held belief that quality must be expensive!

The bigger issue is that our level of income is low. Entrepreneurs are not going to take risks; they must be assured of a critical mass of patients or customers to invest.

Remember the empty malls? 

With low levels of income, fakes and substandard goods and services rule the day.

It’s not always the purchasing power, sometimes lack of information on where services or goods are available can lead to a mismatch of supply and demand. The market is never perfect. That is why regulation comes in. 

Bringing in the visible hand of the regulation, the invisible hand of the market and information can match supply and demand. 

Incidentally, hustlers make their money through mastery of market information, that’s what street smartness is all about. How have you handled this mismatch as a hustler? Talk to us.