Struggling Kenyans feel the pinch as food prices soar

Traders at Eldoret Market, Uasin Gishu County, January 8, 2022. [Peter Ochieng, Standard]

Kenyans struggled to put food on the table last month as food prices rose by 8.89 per cent compared to the same month in 2021. 

The latest data from the Kenya National Bureau of Statistics (KNBS) shows that the retail price of a kilo of cabbages, onions, spinach, and sukuma wiki (kales) increased by 27.6 per cent, 21.9 per cent, 20.5 per cent and 17 per cent respectively. 

Other food items whose retail prices increased include wheat flour, Irish potatoes, carrots, mangoes, and maize flour as the country grappled with adverse weather conditions that have left close to two million Kenyans at risk of starvation. 

“Prices of food items in January 2022 were relatively high compared with prices of food items recorded in January 2021,” said KNBS in a statement yesterday.

Food takes up a huge chunk of Kenyans’ income at 33 per cent. It is even higher for the poor who spend close to two-fifths of their income on food. 

However, the implementation of President Uhuru Kenyatta’s directive to reduce the cost of electricity and the fuel subsidy programme helped bring down the cost of living, with prices of goods and services increasing at a slower pace of 5.39 per cent. 

This is the lowest inflation rate in 11 months. As a result, 50 kilowatts of electricity (units) cost an average of Sh796.8 in January, a drop of 15.73 per cent from Sh945.6 in December.  There were no changes in the prices of petrol and kerosene.

A survey of CEOs by the Monetary Policy Committee found that rising input prices continue to constrain production volumes, especially for firms in the agriculture and manufacturing sectors, where supply chain constraints and the cost of freight remain a big concern. 

“The prices of goods and services sold will remain elevated as supply chain bottlenecks and high input costs persist. This is likely to be passed on to consumers in the form of higher prices of goods and services sold,” reads part of the report. 

There are also fears that business performance will be affected by increased political activity ahead of the August 9 elections as investors adopt a wait-and-see approach to investments.

“On the brighter side, most firms expect business activity to quickly pick up shortly after the conclusion of the elections,” says the report. The increased cost of living in the recent past has also been due to the introduction of a litany of taxes. 

Due to the introduction of the 16 per cent value-added tax (VAT) on cooking gas, for instance, the retail price of a 13kg cylinder jumped by more than a fifth to an average of Sh2,611 by end of November 2021, according to official data.

In some areas, cooking gas is retailing at a high of Sh3,000, defeating the State’s bid to reduce the number of households using dirty fuels like charcoal and kerosene. There is no respite for poor households in major urban areas as prices of kerosene and charcoal - their substitutes for gas - have also been going up.

The government has also increased excise duty on telephone and internet services from 15 per cent to 20 per cent as it moves to squeeze money from taxpayers to finance a hefty budget, including heavy debt repayment.

As a result, the price of calling and browsing has gone up.