A government think tank has asked the Ruto administration to beef up social security for Kenyans who are confronting a high cost of living.
The policy recommendation is contained in a report by the Kenya Institute for Public Policy Research and Analysis (Kippra).
The Kenya Economic Report 2023 whose theme is ‘Cost of Living and the Role of Markets’ reviews the performance of the economy during the preceding year and provides medium-term prospects for the next three years.
"Provide a comprehensive social protection system to complement the minimum wage so that workers and their families can maintain a reasonable level of income through decent work," says Kippra.
"This can be done through provision of reliable and affordable public transport for workers, housing, universal health care and universal education to cushion the minimum wage earners against the high cost of living."
The Ruto administration, which took over last September, has been under pressure to bring down the cost of living and create jobs. But some of its proposed tax and policy measures have been questioned by various interest groups, which has stoked social tensions.
Families hammered by a high cost of living face even more pain from a twin blow of soaring fuel prices and a crippling hike in interest rates.
"Enhance targeted social safety net programmes to protect the poor and vulnerable groups such as orphans, elderly and people with disabilities from food inflation shocks," says Kippra.
"Early warning systems on weather shocks could be utilised to ensure that social safety nets are in place before a crisis occurs."
The rising cost of living is further burdening the already economically strained Kenyans and stoking social tensions at a time President William Ruto’s government is facing mounting pressure to address the cost of living in response to his campaign promises.
The prices of key food items have increased significantly over the past couple of months, adding pressure on cash-starved households still reeling from the economic hit of the Covid-19 pandemic.
High cost of living in a high-inflation environment has huge implications on social welfare, experts say.
It erodes the purchasing power of consumers, depriving them of opportunity to access necessities like food and healthcare.
The International Monetary Fund (IMF) and the World Bank, which have disbursed billions of shillings in financing to the new administration, have been against subsidies.
Rather than targeting assistance to consumers, President Ruto has said his government, would seek to reduce food production costs and increase output by subsidising inputs such as fertiliser and quality seeds.