Traders at Nairobi's Marikiti market, October 18 2020. [David Njaaga, Standard]
This is going to be a tough Christmas. Not that it was any better last year or even the year before. For the last three years, Kenyans have been running on empty pockets with majority of the poor hit the hardest by the sharp increase in prices of basic commodities.
Kenyans’ pain was worsened by the outbreak of Covid-19 pandemic which ravaged the economy, sending millions into unemployment.
The extent to which Kenyans’ purchasing power has been battered is captured in a new survey released by the Central Bank of Kenya in conjunction with Financial Sector Deepening Kenya and Kenya National Bureau of Statistics. According to the survey, the livelihoods of 73.6 per cent of households have worsened this year compared to 2019.
The survey showed that majority of Kenyans’ financial well-being has weakened, with only 17.1 per cent of households being able to meet their daily needs, cope with shocks such as sickness and invest in future goals.
This is unfortunate, considering that the many tax measures the government has introduced over the last five years are partly to blame. The increased taxation has been due to pressure on the government to service its piling debts. Close to 60 per cent of the country’s revenues are going to debt repayment.
This is money that would have been used to cushion Kenyans by, for example, providing farmers with cheap inputs including seeds, fertiliser and pesticides.
Food prices increased at an average 10.6 per cent in October compared to 5.8 per cent in October last year, according to official data. The price of cooking oil, for example, has more than doubled since last year. Erratic rains have aggravated the food situation.
President Uhuru Kenyatta should do whatever it takes to bring down the high cost of living in his final year in office. That should be his New Year resolution at the dawn of 2022.