Government needs to address high cost of living urgently

Shoppers at a supermarket in Nakuru City soon after the release of subsidised maize flour, July 2022. [Harun Wathari Standard]

Prices of goods and services in Kenya are skyrocketing at an alarming rate. In August, official data shows that prices of basic commodities rose by 8.5 per cent, year-on-year. This was the highest jump since June 2017.

Most of the products whose prices have gone up are basic to ordinary mwananchi, which makes it critical for those in government to act with speed. They are mostly food and fuel, two items that affect every household.

They include maize flour, maize grain, white rice, carrots, laundry soap, paraffin, diesel, and petrol. There is an urgent need for the Government to address this crisis. Yet, Kenyans are not only grappling with a high cost of living they are also gripped by a spasm of anxiety on the impending change of guard at State House.  

The outgoing administration of President Uhuru Kenyatta has dangled a number of incentives aimed at bringing down the cost of living. Some of them need to go, others can serve Kenyans better through this economic crisis.

A smooth transition will not only guarantee political, but also economic stability at a time when Kenyans are grappling with a high cost of living. But it will also offer a new regime an opportunity to craft, with sobriety, new policies that will offer long-term solutions to perennial problems like drought and famine.

Kenyans might just need to continue enjoying relatively cheaper fuel compared to their neighbours in the region due to the fuel subsidy programme. And farmers might want more of cheap fertilizer owing to the fertilizer subsidy programme. But they may wonder whether they need the maize subsidy programme. Most of them will not find the Sh100 two-kilogramme maize flour in their retail stores.

Indeed, the maize subsidy programme needs to be revisited and reworked. This should take into consideration the prevailing conditions including the availability of the grain both locally and in the region. However, it is also time for the county governments to play an active role in boosting agricultural productivity. After all, agriculture is a devolved function.  

Counties can achieve this by employing more extension officers. Farmers do not only need cheap inputs such as seeds, fertilizer and pesticides, they also need cheap knowledge. They need extension services which were disrupted by the 1990s structural adjustment programmes.

Despite being a cereals production leader in the 1980s and 1990s, Kenya now has the lowest grain yields in East Africa, according to a 2019 World Bank bi-annual report that looks at the country’s economic condition in a given year.

This, the World Bank noted, is because Kenya’s total factor productivity- or yields from such inputs as technology and extension services - dropped by 10 percentage points to lag behind Rwanda, Ethiopia and Tanzania as well as its low-middle income peers in South Asia and South East Asia. 

“For Kenya to raise its agricultural productivity levels, increased use of inputs must be coupled with knowledge dissemination,” said the report.