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We need to have an honest conversation on the state of the economy

A woman at work at an iron ore mining quarry in Jaribuni,  Kilifi County. [Maureen Ongala, Standard]

There is just something wrong with the country right now. Particularly its economy.

For Kenyans, it seems everything that could go wrong is going wrong. At every turn, they are being hit by increase in prices of essentials and it appears things might get worse in the coming months before they get better, if ever they will ever get better.

Prices of basic commodities have spiked, pushing up the cost of living beyond the reach of millions of ordinary Kenyans.

Some of the items that have left shoppers with a sticker shock include wheat flour, cooking oil, bar soap, detergents, petrol, sukuma wiki and spinach.

We understand that some of this is not of our making. A restless global market that has been aggravated by, first, the Covid-19 pandemic and, second, the war in Ukraine, has pushed up the prices of cooking oil, wheat flour, fertiliser and oil.

It has not helped that the country is still reeling from the aftershocks of a biting drought that depressed harvests.

Nonetheless, with some foresight, some of this could have been avoided.

Take, for example, the brinkmanship that has resulted in the shortage of petroleum products. All that oil marketing companies (OMCs) are asking for is the government to pay them their dues. Unfortunately, the government, in its elements, has delayed with payments, leaving OMCs to continue operating.

At some point, they will be left with no products to sell because in an agreement they struck with the government, oil marketers have been foregoing their margins and selling petroleum at lower prices awaiting to be compensated by the State.

All that the government needed to do is pay up. Prompt payment is the only way to keep the wheels of the economy rolling.

It is encouraging that the government has decided to come up with a fertiliser subsidy, a situation that will see the prices of this critical input slashed by more than half. However, the government needs to know that this subsidy has not taken effect in most outlets across the country. As at yesterday, farmers reported that most farm input shops were still selling a 50kg of DAP fertiliser at Sh6,000, instead of the Sh2,800 announced by Agriculture Cabinet Secretary Peter Munya four days ago. Some follow-up is needed to ensure the full implementation of the directive. This would have been done long ago.

While to its credit the government has been subsidising retail cost of fuel, it is also one of the biggest contributors to the high costs owing to its tax regime on petroleum products. And such is the story on a number of the products whose price has been on the rise, including cooking gas.

Perhaps it is time for the country, led by the lawmakers, to relook our tax regime.