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Ingenious ways businesses are coping with high living cost

Enterprise

By XN Iraki | Jun 29, 2022

The ingenuity of the Kenyan people is their greatest asset. [iStockphoto]

How are ordinary men and women reacting to economic hard times as prices of commodities rise because of the Covid-19 pandemic and war in Ukraine? We hope that the sixth wave will be milder. I had even forgotten how to wear a mask.

The tragedy of inflation or rising prices is that wages and salaries do not rise commensurately. At times, workers have to withdraw their services to get a pay rise. Railway workers are doing that in the UK.

As the great economist John Maynard Keynes said, wages are sticky. Governments fear a wage increase will raise inflation further.

The price of basic commodities keeps rising while our wages and salaries stagnate. Entrepreneurs - read businessmen - can easily raise the price of services or goods if the cost of raw materials goes up. But they know a rise in prices will keep buyers away. They become creative.

A few examples. The last time I took beef stew I noted there is now more stew than beef. But the price remains the same.

Keep Reading business

Mandazi looks the same but they seem more puffed with “air” inside unlike those of Muthaiga Golf Club that are really “solid.” It’s also possible to dilute wheat flour with maize flour! How will you know?

I have noted the use of smaller cups or plates in serving food. For packaged foods, simply get smaller packages which are affordable. I have noted one yoghurt brand at 400ml instead of 500ml.

One ingenious method used by retailers is to increase the price of “small items” like sweets or apples. You may not think much of such an increase. For example, if the price of a sweet sells Sh5 to Sh6 that’s an increase of 20 per cent and inflation is reported as about seven per cent.

A shilling may be small but to an entrepreneur, with large volumes, it‘s quite big. An apple went up by Sh5 from Sh35 to Sh40, an increase of about 14 per cent. If you earn a five-figure salary, you may not notice the rising costs. But the casual workers have to work longer hours or more jobs. That creates stress and can have health implications.

Unlike in the West where safety nets are the norm, we are often on our own in Kenya, until age 70. Luckily, the ingenuity of the Kenyan people is their greatest asset.

We never take things lying down, we adapt to changing circumstances with great hope that hard times are not forever. How have you adapted to rising prices? Share your experience please.