Rising cost of basic goods hits the urban poor

A businesswoman waits for customers at Kenyatta Market in Nairobi. The data uncovers the extent of a deepening social inequality in a country that has otherwise experienced a lower inflation rate of 4.09pc for the first four months of 2013. FILE 

By George Omondi

In Summary

• KNBS shows urban rich paid 2pc more while the poor paid 6pc more for same items.

The rising cost of basic goods and services fell heavily on the urban poor and rural dwellers who on average paid 6.28 per cent more for the same set of items bought last year.

In contrast Nairobi households earning more than Sh121,000 monthly paid only 2.69 per cent more on average for basic commodities and services, new data prepared by Kenya National Bureau of Statistics (KNBS) shows.

(Read: Kenyans spend more on basic commodities)

Those in the Sh23, 671 - 119,999 income bracket paid 3.84 per cent more compared to 3.55 per cent more for Nairobi households earning less than Sh23, 670, Leading Economic Indicators for May show.

“In general, the poor the household is, the larger the portion of income that ends up in basic items such as food and shelter,” says Robert Shaw, economic analyst and businessman.

The figures released last week by KNBS not only fly in the face of the clamour for higher salaries by Members of Parliament but also justify the call for heavy investment in social services.

The data uncovers the extent of a deepening social inequality in a country that has otherwise experienced a lower inflation rate averaging at 4.09 per cent for the first four months of 2013.

In a hypothetical basket of goods that KNBS uses to calculate cost of living, food and alcoholic drinks take the biggest portion of 36.04 per cent, followed by housing items at 18.3 per cent and clothing at 7.43 per cent.

The food and non-alcoholic drinks’ segment of the consumer basket budged by 0.51 per cent between April and May driven largely by prices of tomatoes which increased from Sh103.79 to Sh108.33 over the period.

The poor households however, got a temporary reprieve in housing, water, electricity, gas and other fuels’ segment of the basket which contracted by 0.13 per cent between April and May following the drop in the costs of kerosene and electricity.

On average, a litre of kerosene was retailing at Sh79.21 in May, down from Sh83.69 in April.

In general, Kenyans living outside Nairobi – including regions such as Mombasa, Malindi, Machakos, Nyeri, Thika, Nakuru, Kisii, Kisumu, Eldoret, Nyahururu, Garissa and Bungoma – still paid 2.3 times more on basic items compared to the rich living in Nairobi.

“As one moves deeper into the rural set up, the proportion of people who spend all their earnings on basic items also increases,” said Mr Shaw.

(Read: High cost of living erodes households’ ability to save)

According to World Bank statistics, only 30 per cent of Kenyans live in cities and urban areas meaning about 28 million people still live in rural areas