Rising cost of living: Who will save Kenyans?

Mwangi Wa Iria

Usawa Kwa Wote party leader and Murang'a County Governor Mwangi Wa Iria leads citizens through city streets of Nairobi on a peaceful demonstration on June 28, 2022 while calling on the government to reduce the price of maize flour.

Photo credit: Francis Nderitu | Nation Media Group

For four years, residents of Solio Settlement Scheme in Laikipia County have not realised a harvest due to lack of rainfall and water shortage.

And now, with the searing drought, they are surviving on one meal a day.

While food and water are hard to come by, the drought is also ravaging their animals and has additionally led to increased theft of haystacks from those who can afford it.

The elderly and schoolchildren are the most affected as they cannot feed themselves.

In schools, children are either sharing meals with those who cannot afford to bring some to the learning institution or stealing from each other.

“We are in despair especially for the elderly who cannot do menial jobs like [the able-bodied] and children who rely on us to eat,” said Ms Miriam Wambui, a resident.

Residents of the settlement scheme were relocated from different parts of Nyeri County and given land donated to them during former President Mwai Kibaki’s tenure.

There are about seven villages at the settlement scheme, where locals grow different crops for sale such as beans and potatoes.

Menial jobs

But with no rains and water, agricultural activities have reduced and so are the menial jobs.

“We have resolved to ensure there is food at night, however little, which we share and sleep,” Ms Wambui told Nation.

Ms Josephine Wanjiku, 79, has been relying on well-wishers to feed her four grandchildren — a situation that has been exacerbated by the high cost of living.

“I cannot support myself with menial jobs but, through the help of Good Samaritans and generous neighbours, I am making sure we eat a meal at night and drink milk-less tea,” she said.

According to economists and public policy experts, the first half of the 2022 has been tough, and the second half, with elections in August, set to get worse.

This is bad news for most Kenyans, pushed to the brink by the rising cost of living, which has now left millions struggling to put food on the table.

According to the World Bank, the rising energy prices, the Russia-Ukraine war that has interrupted global food and energy supplies, as well as the resurgence of Covid-19 infections will see most countries near the brink of, if not enter, recessions.

For Kenya, the odds are highly stacked against it.

Just like every election cycle, the rains have failed and a biting drought has compounded the problems for ordinary citizens.

Hard pressed to provide food for millions amid an unreliable global supply chain, the warning signs are on for the government.

The ride is now bound to get bumpier.

On May 1, during Labour Day celebrations, President Uhuru Kenyatta asked politicians including his deputy William Ruto to stop blaming him for the high cost of living in the country.

“The current rise in cost of living are compounded by issues beyond my control like the coronavirus pandemic and the Russia-Ukraine conflict,” he said.

And, two months after his statement, things have gotten worse. A vast majority of Kenyans, unable to afford the higher prices, are starting to forgo some purchases, luxuries and the basic three meals a day.

“It has gotten to a point that we hide from our children when they come home from school because we are embarrassed when they ask for food and we have nothing to give them,” Ms Leah Wachera, a Nyeri resident said.

In June, Kenya’s inflation hit a 58-month high on soaring prices of food items, breaching the government’s upper limit target for the first time since August 2017.

Inflation — a measure of annual changes in the cost of living — hit 7.9 per cent in June from 7.1 per cent in May, the Kenya National Bureau of Statistics (KNBS) reported last Thursday.

This is the first-time that year-on-year inflation crossed the upper limit of 7.5 per cent since August 2017, when it climbed to 8.04 per cent in a biting drought at the time. The General Election was also around the corner at the time.

“The rise in inflation was mainly due to increase in prices of commodities [especially] food and non-alcoholic beverages. Relative to May 2022, prices of wheat flour-white, carrots and cooking oil (salad) increased 12.7, 4.7 and 4.7 per cent in June 2022, respectively,” KNBS Managing Director Macdonald Obudho said in a statement.

On May 31, Central Bank of Kenya Governor Patrick Njoroge warned of a “clear and present danger” of inflation punching above the upper limit of 7.5 per cent in coming months.

“We will take all measures necessary to deal with inflation. But it is clear that, on supply side-driven inflation [growth in cost of commodities], there’s virtually nothing that monetary policy can do. What monetary policy does is to deal with second-round effects,” Dr Njoroge said.

But is there anything the government could have done to arrest this?

In May 2017, just three months before the elections, President Kenyatta’s administration invoked the Price Control (Essential Goods) Act, 2011 as a weapon to control the cost of living.

The National Treasury capped the price of the two kilogramme packet maize flour at Sh90, with those in breach risking a fine of Sh1 million or a five-year jail term.

At the time, the price of the 2kg packet of flour had risen to Sh140 and presented a political headache for Mr Kenyatta as he sought r-election for a second term.

This time around, the price has now breached the Sh200 mark for the first time in history, up from an average of Sh148.57 in May, amid simmering public anger over the high cost of living.

Sadly, there is no law to save Kenyans from the rising prices.

Last week, the Treasury said it will not invoke the law in reaction to the surge in inflation.

“Restricting prices is [old-fashioned], we have gone to a competitive economy where we want freedom, we want suppliers to be able to compete so price control is not something that is encouraged nowadays in the current way of doing business anywhere in the world,” Treasury Principal Secretary Julius Muia told the Business Daily on Wednesday.

The Act, which was enacted during the tenure of former President Mwai Kibaki, allows the Finance minister to set maximum prices of gazetted essential commodities upon consultation with the relevant industry.

With the Russia-Ukraine conflict showing no signs of de-escalating, and the resurgence of Covid-19, it is bad news for the second half of 2022.

As top world exporters of food staples, Russia — which is also the world’s largest exporter of fertiliser — and Ukraine account for a substantial share of wheat, corn and seed oil exports, all of which may be halted if the conflict persists. And it is these three items that now cost an arm and a leg for many Kenyans.

 “High fuel and food prices will translate into higher inflation across African countries, hurting poor and vulnerable citizens, especially those living in urban areas,” World Bank said in its African Pulse report in April this year.

 “Amid limited fiscal space, policymakers must look to innovative solutions such as reducing or waiving import duties on staple foods temporarily to provide relief to their citizens,” World Bank Chief Economist for Africa Albert Zeufack said.

Last week, Agriculture Cabinet Secretary Peter Munya took this advice and gazetted the suspension of fees and levies on maize. The suspension, which lasts 90 days, comes just three days after the CS promised to issue a notice lifting fees and levies on the grain “to ease the pain on Kenyans”.

“It is notified for the information of the general public that the Cabinet Secretary responsible for Agriculture, Livestock, Fisheries and Co-operatives has suspended the payment of fees and levies charged on imported maize for... 90 days with effect from July 1,” Mr Munya said in the notice.

Millers said the decision by the CS is a relief to them and consumers. Grain Belt Millers Association Chairman Kipng’etich Mutai said the announcement by the CS would bring relief to consumers, even though it may still be too early to tell by how much the flour prices would fall.

“The biting maize shortage has pushed the cost of flour up. Flour prices would reduce since millers would get the grains at lower costs,” Mr Mutai said.

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