Business Daily Kenya:
The ongoing dry spell inside country has spiked the cost of living to a high of 9.04 per cent following a sharp increase inside prices of food including sukuma wiki, milk, potatoes in addition to maize flour.
Most families will not be able to afford the same quantities of food enjoyed last month as inflation starts to bite, according to Kenya National Bureau of Statistics (KNBS) data by February.
A kilo of sukuma wiki will right now cost Sh54.10 compared to Sh48.70 in January, while sifted maize flour will cost Sh126.80 by Sh119.6. KNBS’ national average retail cost estimates show in which the cost of a kilogramme of potatoes also went up to Sh85.80 by Sh82.30 in January, affecting delicacies such as chips in addition to crips.
This particular drastic increase in inflation, which has right now busted the government’s target range of between 2.5 per cent in addition to 7.5 per cent, was also caused by an increase inside cost of fuel in February.
The Energy Regulatory Commission (ERC) announced an increase inside fuel retail prices as the petrol increased by Sh4.26 per litre, diesel by Sh5.03 per litre in addition to kerosene an extra Sh3.75 countrywide.
This particular comes as the Central Bank’s Monetary Policy Committee (MPC) estimated in January in which inflation could remain within the government target range inside short term. however the committee also noted increased uncertainties with regard to the prevailing drought conditions, coupled with risks inside global markets, as major economic concerns.
The MPC retained the Central Bank Rate (CBR) at 10 per cent to anchor inflation expectations as in which continued to monitor developments inside domestic in addition to global economies, in addition to assured to take additional measures as necessary. Economists warned last month in which the drought could exert pressure on prices.
Britam Asset Managers analysts Brian Chege said unfavourable climatic conditions in addition to drought are likely to affect agricultural productivity, increase electricity costs in addition to reduce the water availability.
“We expect the above factors to culminate in upward pressure on overall inflation in 2017. Inflation will, therefore, trend towards the upper range of CBK’s target of 7.5 per cent,” he said during the launch of an economic outlook on February 3.
In January last year, a two-kilogramme packet of maize (sifted) flour was retailing at around Sh98 however the commodity can be right now going at about Sh120. A one-litre can of cooking oil has increased to an average cost of Sh200 in January by an average of Sh192 in 2016.
The cost of a two-kilogramme packet of sugar was Sh270 during the period, however has since risen to Sh300 in most retail outlets, while a packet of milk (500ml) has somewhat stagnated at the same cost over in which period at Sh54.
Amid looming general elections, the biting drought, increasing cost of fuel in addition to low credit by financial institutions could stretch the cost of living further.
However, with signs of imminent rains, the resultant harvests could help leverage the cost of basic foodstuff, easing the burden for most households.
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Inflation shoots to 9pc