•Kenyans are also struggling with high taxation and reduced disposable income.
•CBK governor Kamau Thugge recently noted the global economic outlook remains uncertain, amid geopolitical tension and monetary policy tightening to tame inflation.
Image: FILE
Kenyan households should remain patient and give the government time to fix the economy and address the high cost of living, the Consumer Federation of Kenya (Cofek) now says.
This, even as high fuel prices and the weakening shilling threaten to trigger inflation, amid increased taxation and reduced disposable income for the majority of Kenyans.
Fuel prices hit an all-time high this month crossing the 200-mark for the first time, a move that has hit motorists hard.
A litre of super petrol is retailing at Sh211.64, in Nairobi, with motorists paying more in some other parts of the country.
Manufacturing, transport and agriculture sectors, huge consumers of diesel, have also been hit with increased costs being passed to consumers.
A litre of diesel is doing for Sh200.99 in the capital.
Poor households who use kerosene for cooking and lighting have also not been spared as a litre of kerosene now costs Sh202.61.
The Kenyan shilling has also been on a losing streak to the US dollar, pushing up the cost of imports with consumers paying more for goods.
Year-to-date, the shilling has shed more than 18 per cent of its value from the Sh124.49 it averaged against the dollar in January, to yesterday’s Sh147.35.
Kenya remains a net importer with a widening trade deficit, which hit Sh1.62 trillion last year, the Economic Survey 2023 shows.
The country’s import bill rose by 17.5 per cent to Sh2.5 trillion against Sh873.1 billion in export earnings.
“ Yes, it is the most difficult time: High fuel prices, high cost of credit and surging inflation. A pervading sense of hopelessness is emerging.It may be global. But we feel its' pain, locally,” Cofek Secretary General Stephen Mutoro said.
However, he noted that “no magic”, condemnation, weaponisation and name-calling will lower the cost of living crisis.
“Fellow Kenyans, I urge for patience and calm even as we look up to President William Ruto to steady the ship,” Mutoro noted, saying the President knows the expectations of Kenyans and he is working on a sustainable solution to the economic challenges.
“ He is not in for a quick fix, Mutoro said.
The consumer lobby has in the past raised concerns over the consistent rise in the cost of living and taxation, calling on the government to put in place measures to cushion households.
CBK governor Kamau Thugge recently noted the global economic outlook remains uncertain, amid continuing geopolitical tension particularly the war in Ukraine and monetary policy tightening to tame inflation.
While Kenya’s inflation dropped for the third straight months to 6.7 per cent in August, from 7.3 per cent and 7.9 per cent in the preceding months, respectively, the commodity prices have remained high.
“It is baffling how lower figures of inflation, as announced by KNBS, do not reflect the reduced cost of living on the ground,” Mutoro had earlier told the Star.
According to the Kenya National Bureau of Statistics data, a wide range of food prices went down in August save for sugar, which increased.
Electricity costs and fuel prices however remained high.
“Prices of most food products dropped during the period. In particular, the prices of maize grain-loose, maize flour-loose, fortified maize flour, potatoes and tomatoes decreased by 8.2, 7.3, 6.1 and 3.5 per cent, respectively, between July 2023 and August 2023,” KNBS director general Macdonald Obudho said.
However, the alcoholic beverages, tobacco and narcotics index rose by 0.7 per cent.
This was mainly on account of a 0.7 per cent increase in prices of spirits during the period.
Whereas the prices of petrol and diesel remained unchanged between July and August, the transport index went up by 0.3 per cent, mainly due to an increase in the prices of country bus fares for some routes.
Ruto is banking on a number of initiatives to help bring down the cost of living, among them increasing farmers’ crop output, supported by a government fertiliser subsidy programme.
Last month, he said his administration had spent up to Sh12 billion in fertiliser subsidies and has dealt away with cartels who were acting as third parties in distributions.
A 50kg bag of subsidised fertiliser, he said, had gone down to Sh2,500 from Sh3,500.
"Last year, we harvested 44 million bags for the whole year, this year we are expecting 61 million bags of grain because of the correct use of fertiliser," he said.
While fuel prices, high taxation and costly imports remain major contributors to inflation, lower food prices in the country are likely to balance the act for the government in addressing the high cost of living.