The Jubilee Government continues to come under sharp criticism over the rising cost of living. The country’s annual inflation rate accelerated for a fourth consecutive month, hitting five years high of 11.5 percent in April 2017, from 10.3 percent in March 2017. This, without a doubt, explains why the rising cost of living remains a serious problem facing Kenyans today.
Before we apportion blame, let’s first look at the factors that influence the rising cost of living in Kenya.
Kenya currently faces a severe drought that has curtailed food production. The rains currently experienced are less than normal. In a country, like Kenya, whose economy is largely dependent on rain-fed agriculture, drought remains a significant risk to its inflation outlook. The problem is further compounded by the armyworm outbreak in Kenya. The deadly armyworms have been detected in parts of the Rift Valley, Western and Coast regions, destroying food crops, such as cereals, and worsening the food situation in the country.
In such an environment, the cost of producing food automatically increases resulting in an increase in the price of food items. On the brighter side, the Government has attempted to cushion Kenyans from the rising cost of food by introducing VAT exemption on maize and wheat flour. More though needs to be done. There is need to hold the Government accountable to its election pledge to create a food-secure Kenya that has a vibrant agricultural sector that produces food in excess of the needs of the country by encouraging mechanisation, irrigation reviving cooperatives and farmers’ unions and subsidies for inputs. There is need to find the root cause of the continued failure of the million-acre Galana-Kalalu Irrigation scheme to meet its ambitious targets.
The second factor we should look at is lifestyle inflation, i.e. the escalating cost of the country’s changing lifestyle. Those privileged grew up on toughees Bata shoes that doubled as school shoes and church-going shoes. These shoes were relatively affordable and could last for up to two years. Today, our children insist on wearing expensive designer shoes, partly on account of peer pressure. Electronic gadgets like microwaves, that were previously a reserve of the wealthy, can now be found in most urban kitchens, doubling or tripling our electricity bills. Very few households incurred telephone bills back in the day, today most urban homes have broadband and almost all members of the household own a mobile phone or two, introducing a new expense that was previously unknown.
Lifestyle inflation has brought with it increased cost of living. As we adapt to the small comforts of life such as household cooling appliances like air-conditioners, refrigerators and chillers and electric gadgets such as electric rice makers and microwaves, our electricity bills double or triple. While Uber fares appear cheap at face value, they have in the long run increased our transport expenses as more urban dwellers opt for taxis as opposed to buses and matatus. The hard truth is our increased expenses have increased our cost of living. It is no wonder Kenyans consumed 102 percent of their income in 2013, 103 percent in 2014 and 102 percent in 2005. Statistics further reveal that 45 percent of our income goes to food and drink, meaning not much is left for other critical needs like shelter, health, clothing and transport. Most Kenyans are forced to survive by depleting their savings or falling dipper into debt.
The rising cost of living and lifestyle inflation directly threatens a life a dignity for all Kenyans. There is need to manage our household expenditures.