Kenya's inflation hits 19-month high on costly food, fuel

A trader at his grocery store at the Top Market in Nakuru. FILE PHOTO | NMGBy CONSTANT MUNDA

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Summary

• The Kenya National Bureau of Statistics (KNBS) report Thursday showed that food prices rose 10.63 percent in September compared with a year ago.
• The higher costs are largely on account of biting dry weather conditions in more than 10 counties, making it the second back-to-back double-digit growth.
• Households are also paying 10.44 percent more to buy a kilo of beef at Sh481.45, but a 2kg packet of sifted maize flour dropped by 2.48 percent to Sh115.91, compared to similar month last year.

Kenya’s inflation rose to a 19-month high in September on the back of the rising cost of basic products such as fuel, food and electricity, signalling a painful cost pinch on budgets for households and businesses amid the Covid-19 pandemic impact.

Inflation — a measure of changes in the cost of living year-on-year — climbed to 6.91 percent from 6.57 percent in August as bad weather, high cost of global fuel prices and supply constraints affected commodity prices.

The Kenya National Bureau of Statistics (KNBS) report Thursday showed that food prices rose 10.63 percent in September compared with a year ago.

The higher costs are largely on account of biting dry weather conditions in more than 10 counties, making it the second back-to-back double-digit growth.

The KNBS data shows, over the last year, the price of cabbages has risen by 30.76 percent a kilo, spinach 20.99 percent, sukuma wiki (kale) 16.93 percent, tomatoes 11.67 percent, and carrots are up 9.10 percent.

Households are also paying 10.44 percent more to buy a kilo of beef at Sh481.45, but a 2kg packet of sifted maize flour dropped by 2.48 percent to Sh115.91, compared to similar month last year.

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The rise in food prices has added a more pain to consumers who have been spending more on fuel this year.

Fuel prices rose 10 percent in the period.

Refilling a 13-kilo liquefied petroleum gas (cooking gas) cylinder cost Sh411.66 ($3.7), or 20.24 percent more, to an average of Sh2,445.24 ($22.12)largely on the impact of the 16 percent value-added tax on the commodity in July.

“The tax measures will continue to make their presence felt and we calculated the contribution to be something in the order of 1.78 percentage points to the overall inflation,” Central Bank of Kenya Governor Patrick Njoroge said on Wednesday.

Households relying on kerosene for cooking and lighting paid 32.87 percent higher to Sh111.74 ($1.01)for a litre of the commodity than a year earlier on withdrawal of a subsidy the Treasury had been spending to compensate oil marketers.

Kerosene prices have risen faster than petrol and diesel whose average cost in September was 27.50 and 22.07 percent higher to record Sh135.54 ($1.23) and Sh116.5 ($1.05), keeping the cost of transportation elevated.

The data further shows households and businesses consuming 200 kilowatt hour (kWh) spent Sh413.21 ($3.74) more than the year before for lighting and, powering gadgets and equipment in September for Sh5,019.41 (45.41).

The power bills for homes using 50 units went up Sh103.30 ($0.93) last month to Sh903.95 at a time fuel surcharge, based on share of fuel-powered generators in the electricity mix, increased to Sh3.88  per unit— the highest since July 2018.