10 March 2017

Kenyans Hit Hard By Inflation As Prices Jump

The cost of living in Kenya increased for the third consecutive month, as food and fuel continued to rise.

The month-on-month inflation surpassed the government's upper limit of 7.5 per cent for the first time in 14 months, as a rise in the general price level of goods and services hit a record high of 9.04 per cent in February.

The cost of food, water, electricity, fuel, gas and housing constrained consumers' incomes.

The last time inflation surpassed the government's upper limit was in December 2015, when prices rose by 8.01 per cent. The Central Bank is expected to write to the National Treasury Cabinet Secretary and the parliamentary Finance, Planning and Trade Committee explaining why inflation has deviated from the 5 per cent target by more than 2.5 percentage points, the measures the Bank is taking and when the rate is expected to return to the preferred range.

The Kenya National Bureau of Statistics has attributed the spike in the cost of living to increases in the prices of sukuma wiki, maize flour, milk, cabbages, spinach, potatoes and maize grain due to the drought. During February, house rent, the cost of water, electricity and gas, and pump prices of petrol, diesel and kerosene increased, according to the statistics body.

Inflation averaged 6.32 per cent for the 12 months to December 2016, attributed to a drop in food and fuel prices, but in January 2017 the growth in the general level of prices of goods and services jumped to 6.99 per cent, the highest in 12 months.

Mercy Mwatha, a casual labourer in Nairobi's Mathare slum, said life has become unbearable. The mother of three earns Ksh200 ($2) per day by performing chores such as gardening, watering flowers and cleaning homes in the city. She says the price of sugar has risen from around Ksh80 ($0.8) to between Ksh140 ($1.4) and Ksh150 ($1.5) per kilogramme.

A 2kg packet of maize flour has jumped from Ksh90 ($0.9) to between Ksh120 ($1.2) and Ksh130 ($1.3) while the cost of 20 litres of water has gone up to Ksh10 ($0.1), from Ksh3 ($0.03).

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