Cost of living: One year down the line, there's no agreeable way out

A customer samples maize flour at Mama Watoto Supermarket in Kakamega town on March 23, 2023.  [Mumo Munuve, Standard]

The rising cost of living has been a persistent migraine throughout the year for the government with recent sentiments from State officials flipping the coin back to Kenyans amidst the biting economic challenges.

Comments made by Agriculture Cabinet Secretary Mithika Linturi and Principal Secretary in the State Department for Industry Dr Juma Mukhwana in separate events recently suggest that they (Kenyans) are better placed to play a bigger role.

While CS Linturi sold the idea of Kenyans planting their own food crops, PS Mukhwana said the country’s cost of living is untameable because businesses are not producing enough.

As a result, Kenyans end up importing products and this exacerbates the cost of living.

Throughout the year, Kenyans have been tackling runaway inflation with the Kenya National Bureau of Statistics (KNBS) indicating that food prices are a major contributor.

Year-on-year inflation stood at 9.0 per cent at the beginning of the year in January, which was a slight drop from 9.1 per cent.

The transport index led with 13.1 per cent in the previous 12 months while the food and non-alcoholic beverages index shot by 12.8 per cent in the same period.

While the inflation rate might have dropped from 9.0 per cent in January to 6.8 per cent in November 2023, transport still had the highest index at 13.6 per cent due to the sustained higher fuel prices while food and non-alcoholic beverages stood at 7.6 per cent.

In January, the price of fuel stood at Sh177 per litre for petrol and Sh162 for diesel. But by November, the price of a litre of petrol stood at Sh217 in Nairobi.

During his first State of the National address, President William Ruto cited his policy of subsidising production, and not consumption like his predecessor, as the reason behind the drop of maize flour prices from Sh250 per two-kilogram packet when he took office in September last year to the current Sh145.

This was made possible, he said, by subsidising the cost of fertiliser from Sh6,500 to Sh2,500. He also noted public debt as a contributing factor to the country’s economic situation.

"Time has come to retire the false comforts and illusional benefits of wasted expenditure and counterproductive subsidies on consumption by which we dug ourselves deeper into the hole of avoidable debt," he said.

CS Linturi, while on the sidelines of a conference held by Kenya Tea Development Agency (KTDA) insisted how important the sector is to President Ruto’s Bottom-up Transformation Agenda (BETA).

He said Kenyans can manage the cost of living by engaging in farming as a side hustle, indicating that it is an area with the ‘greatest potential’ to increase revenue streams.

“What I mean is you may have a salary, of so much money as a teacher or a CS or an accountant somewhere; but if you were to spend that money in buying your milk, maize, vegetables and paying school fees, you will realise that money will not be enough,” he said.

“When I talk about diversification and increasing revenue streams, it means yes, I am an accountant in an office but at home, I can keep two or three cows I can be able to get an extra maybe 20 litres per cow that I can sell.”

These comments appear to throw the ball on the cost of living back to Kenyans. From promises that the situation will be fixed to defence and now throwing the ball back to Kenyans.

Deputy President Rigathi Gachagua, in November, while at a church function, came to the defence of the government over the country’s economic situation.

“The taxes we collect are not enough. When we took office, we found a country with so many debts. And it is not us who took them but we have to pay,” he said.

It is the same chorus that has been sung by leaders allied to the Kenya Kwanza with some asking for more time as the efforts employed by the government will soon pay up.

PS Mukhwana, while speaking during an event where 23 successful SMEs are set to benefit from performance-based grant funding under the Kenya Industry and Entrepreneurship Project (KIEP), said the blame for the cost of living partly lies on the country’s dependence on imports.

The PS said it is ironic for a country that imports 80 per cent and makes only 20 per cent to have a discourse on the cost of living.

“There is no country that can grow by importing. If you are consuming what you do not produce you cannot even discuss the cost of living,” he said. “The only way to reduce the cost of living is to produce. The work of production is not the government’s; it is the citizens’. Ours is to give you the environment to produce.”

PS Mukhwana said there is no way a country can grow by largely importing.

“If you are consuming what you do not produce you cannot even discuss cost of living,” he said. “The only way to reduce the cost of living is to produce. The work of production is not the government’s; it is the citizens’. Ours is to give you the environment to produce.”

The PS said the government has done what it needs to do –provide the necessary policies –to grow the manufacturing sector which he said if exploited by enterprises, would manage the runaway cost of living.

He cited agreements that Kenya has spearheaded among them the East African Community (EAC), Strategic Partnership Agreement (SPA) with the United States which he said is at the tail end, the Africa Growth and Opportunity Act (Agoa), and the pact with European Union that will be signed later this month by President William Ruto.

The PS said all these are markets that are ready and available for businesses to take advantage of but the country is not exploiting them.

The EU-Kenya Partnership Agreement which will be signed December 17 will allow Kenyan manufacturers to export products to 27 European Union markets free, quota-free for 25 years.

 “My worry is where are the goods?” he posed.

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