According to National Treasury Cabinet Secretary Ukur Yatani the current high cost of living in Kenya could worsen.
Attributing this to global issues such as rising oil prices and disruptions in the global supply chain, which have resulted in commodity shortages, Yatani, added that the war between Russia and Ukraine has exacerbated the problem.
Freight costs have remained high, with the weak shilling against the US dollar having an even greater influence on import expenses, pushing traders and producers to pass on the additional costs to consumers.
His remarks came as inflation touched a seven-month high in April, owing primarily to soaring food and fuel prices. Inflation in the country reached a high of 6.47 percent in April, up from 5.56 percent in March and 5.08 percent in February.
Cooking oil, which has more than doubled in price in the last two months, is one of the commodities that has seen major price increases.
While the Kenya National Bureau of Statistics (KNBS) reports that the price of a litre of cooking oil (salad) grew to Sh351.99 in April from Sh332.4 in March, current retail prices are far higher, with a litre going for up to Sh500 for some brands.
Both petrol and diesel pump prices increased by Sh5 per litre last month.
Wheat, maize, and fertilizer costs have remained high on international markets, with Kenya importing more than 60% of its wheat from Russia and Ukraine.
This has been reflected in local market shelf pricing, where prices of bread, for example, have increased by Sh5, with a 400g loaf now costing Sh60.
About two months after the war began, the high cost of fertiliser imports began to be felt locally.
DAP fertiliser costs have risen by more than 25% globally, with a bag now costing Sh5,700, up from Sh2,500 a year earlier.
The recent bad rains also harmed food production, particularly in the dairy industry, resulting in a milk shortage and a retail price hike of up to Sh5 on the commodity.
“The situation may become even more difficult for us and the world,” CS Yatani warned Tuesday, saying that sanctions (on Russia) had hampered trade.
Economic Survey 2022
Yatani highlighted these as he unveiled the Economic Survey 2022, an annual publication that examines the economy’s socio-economic highlights over the previous five years
The report is a valuable source of information for national development policy and investment decisions, including budgeting, planning, monitoring, and policy formulation.
According to the Economic Survey(2022), the country’s growth rose to 7.5 percent last year after a 0.3 percent contraction as the economy recovered.
However, the survey shows that inflation in the country reached a four-year high of 6.1 percent last year, up from 4.7 percent in 2018.
It was 5.4 percent in 2020 and 5.2 percent in 2019, a decrease from eight percent in 2017.
On account of higher petrol and diesel costs, the transport index registered the highest inflation rate of 12.3% in 2021.
Oil and fats, ready-made meals, seafood, vegetables, fruits, meat, milk, wheat and maize flour, and sugar are all key food commodities to keep an eye on.