Households feel pinch as inflation hits 8.5pc

Thursday, September 1st, 2022 17:31 | By
Kenyans have been grappling with high food prices due to myriad factors including tax increases. FILE

The cost of living has surged for the seventh month in a row to 8.5 per cent further hurting households already under pressure from high fuel, drought and election anxieties.

Kenya National Bureau of Statistics (KNBS) says inflation stood at 8.3 per cent last month, during which time, the Kenyans have been grappling with high food prices due to myriad factors including tax increases.

FILE government rolled out numerous programmes including flour and fuel subsidies but their intended purposes may have fallen flat. The 63-month rise in inflation, according to KNBS, was mainly attributed to the heightening of the food and non-alcoholic beverages index which soared by 0.5 per cent between July 2022 and August 2022.

“The rise in inflation was mainly due to an increase in prices of commodities under food and non-alcoholic beverages (15.3 per cent), transport (7.6 per cent), and housing, water, electricity, gas and other fuel (5.6 per cent) between August 2021 and August 2022,” KNBS Director General Macdonald Obudho said in the August monthly review.

Alcoholic Beverages, Tobacco and Narcotics Index increased by 0.7 per cent in the last month, laying bare the impact of the increase in excise duty on these products which came into force from July 2022.

Beer prices increased 1.2 per cent while wine costs surged by 0.8 per cent. A rise in the prices of laundry/ bar soap (1.5 per cent) and detergents (0.7 per cent) saw the household index increase by 0.5 per cent between July and August this year.

Consumer Price Index (CPI) surged by 0.4 per cent from an index of 125.05 in July 2022 to 125.58 in August 2022. Over the last one month, prices of maize flour (loose), sugar, and mangoes increased by 4.7 per cent, 4.6 per cent, and 4.1 per cent respectively.

This month’s increase signals the government continued inability to arrest the runaway cost of living that is even facing more uncertainty as protracted political jitters still grip the economy.

Supply chain hitches

With the disputed presidential election dragging at the Supreme Court, businesses and investors remain cautious of possible disruption of property and supply chain hitches which has been the case in the past during Kenya’s elections.

The increase in the cost of living is set to deliver pain to most households as there are no signs of the situation reversing soon to the pre-Covid level or even a quick economic fix as anticipated by households when the next administration takes over.

Employers are pressed by numerous workers seeking pay rise to afford the now costly consumer goods. They are further trying to absorb the large number of the jobless population who lost their source of income when Covid struck.

Most sectors, especially banks, have lately been increasing their workforce, something that has partly seen their operation costs grow in the past six months. Absa Bank, for instance, clarified during half-year financial results that it is not planning to cut the workforce while Kenya Airways (KQ) stated it is not targeting any further salary slash but will maintain the number of the existing employees.

The biting economic times come amid the shedding off of Kenya shillings recording a record low of Sh120 per dollar, setting up the country and consumers for more expensive imports, electricity and, debt servicing distress.


• Manufacturers, who heavily rely on imports, are forced to factor in the depreciation of the local currency when pricing their end consumer products.

• Kenya imports various goods including fuel, cooking oil ingredients, machinery, medicine and pharmaceuticals products, wheat, and clothing.

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