President William Ruto is in a race against time to fulfil his campaign promise to lower the cost of living within 100 days as prices of basic commodities continue to rise in his first month in office.
Maize flour prices went up 8.4 per cent between August and September, electricity prices rose 20.9 per cent, petrol prices went up 17.7 per cent, while the cost of transport shot up 25 per cent.
A litre of cooking oil is retailing at between Sh350 and Sh480 depending on the brand, a sharp increase from last year, amid restricted imports of crude palm oil from the key source markets of Malaysia and Indonesia. Rice prices have gone up 20.9 per cent during the period, with a 2kg packet of aromatic pishori rice that was selling at Sh442 in September last year going for Sh519 last month.
Sugar prices have also continued to go up, with ex-factory prices averaging Sh5,308 for a 50kg bag in August compared to Sh4,464 in July, a 19 per cent increase, according to data from the Sugar Directorate.
Inflation hit a 63-month high of 9.2 per cent in September after fuel prices jumped to a record high, driving up the cost of essential goods and services. September’s year-on-year inflation rate is the highest in five years, matching that of June 2017, according to data from the Kenya National Bureau of Statistics (KNBS).
The rise in inflation was largely driven by increase in prices of commodities under food and non-alcoholic beverages (15.5 per cent), transport (10.2 per cent) and housing, water, electricity, gas and other fuels (7.3 per cent).
“These three divisions account for over 57 per cent of the weights of the 13 broad categories,” said KNBS.
President Ruto is finding it increasingly hard to fulfil his promise to lower commodity costs in his first 100 days in office as the reality check of a broke Treasury, rising debt accumulation, a huge wage bill and a low revenues force him to take a U-turn on his priorities.
The President is now prioritising cutting government expenditure and raising revenue collection. His government has started to roll back subsidies that were dished out by former President Uhuru Kenyatta in the months before the August polls.
During the campaigns, President Ruto had dismissed the Russia-Ukraine war as the major cause of the increase in prices of key commodities, but now faces a hard time convincing Kenyans to be patient as he works to fulfil his pledges.
“The challenge of high cost of living can be dealt with by investing in agriculture, period. Explanations about Ukraine, I don’t know what, are tall tales,” Dr Ruto said in July.
Last month, however, he gave an indication that things could get worse before they get better.
On his first full day in office, Dr Ruto was forced to make a tough choice on the fuel subsidy, forcing him to partially apply the subsidy to prevent a sharper increase in the cost. The subsidies have been helping to alleviate further upward price pressures, and their removal on fuel and electricity has already seen the prices of the goods shoot-up.
Petrol prices hit a historic high of Sh179.3 per litre while diesel hit a high of Sh165 per litre. Meanwhile, the cost of kerosene jumped to Sh147.94 per litre. The sharp fuel increases saw travel and transportation costs shoot up by 25 per cent. The energy regulator also raised the fuel cost component of the power bill by 46.6 per cent, leading to the sharp increase in what consumers are paying.
Central Bank of Kenya recently raised its base lending rate by 75 basis points to 8.25 per cent to stem rising inflation and stabilise the shilling.
