The High cost of living is set to be on the decline, with the latest data from the Kenya National Bureau of Statistics (KBNS) indicating that the rate of inflation stood at 9% in January. Although this should indicate better times ahead, the expected tax and power cost increments could undo these gains.
According to the Bureau, transport, food, and fuel were major drivers of inflation in January, with the consumer price index increasing by 0.2% to ksh 129.29.
The high cost of living was occasioned by the hike in prices of essential commodities, some of which hit record highs within the past year. For instance, cooking oil prices are said to have risen by 4.3%, sugar by 15.4%, electricity by 20.65%, and petrol by 11.3%.
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This has strained the pockets of ordinary Kenyans, leaving them struggling to meet necessities like rent, food, clothing, and medicine.
The current and previous administrations have repeatedly blamed the high cost of living on the ripple effect of the war in Ukraine, which has contributed to a global energy and food crisis.
Uhuru’s administration sought to address the high cost of living by introducing subsidies in the food and energy sectors, the removal of which resulted in a predictable rise in the cost of living.
Food
According to the Kenya Bureau of Statistics, maize supply in the country is set to go up with the long rain season expected to boost high harvests and reduce the cost of agricultural produce. Also, Imports of maize, rice, and sugar, which have already been gazetted as to be imported duty-free between the 1st of February to the 6th of August, are expected to assert a downward pressure on food prices.
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In his last interview on Citizen tv, the president revealed that food is the biggest contributor to the cost of living. Consequently, he said his administration plans to lower the cost of living by increasing food production in the country.
After swearing in, Ruto’s administration hit the ground rolling by ordering 1.5M bags of fertilizer supply to farmers in the short rains category. They also lowered the cost of fertilizer from ksh 6000 to ksh 3500. Future government plans include the utilization of government land to produce agricultural inputs such as seeds and increasing agricultural mechanization.
Fuel
The housing, water, electricity, gas, and other fuel indexes are said to have increased by 0.3% between December 2022 and January 2023 due to an increase in electricity prices. On a larger scale, power uptake by industries has marginally risen after dipping during the election season of August 2022.
“Power consumption is a good indicator of what is happening in the manufacturing sector. After the dip in August, the sector is marginally recovering,” said the Kenya National Bureau of Statistics.
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Despite the projected inflation easing in 2023, Kenya Power’s proposal to increase retail electricity tariffs by 40% is set to put a further strain on Kenyans’ wallets, hitting them through household and business consumptions and the pass-through – the cost of manufactured goods.
EPRA’s director general, Daniel Kiptoo, said they would look at Kenya Power’s proposal after determining whether the price increase is viable. Once the public participation process is complete, EPRA will deliberate on the next steps to be taken, after which they will announce new power prices on the 1st of April.
He had earlier announced that the current maximum fuel prices would remain unchanged until February 14th.
