As long as the Kenyan shilling is under pressure from the dollar, the price of fuel and food will continue rising. In August the shilling reached a record low of 95.05 shillings to the dollar. The low income segments are hardest hit by this situation.
By Peter Kahare
RIFT VALLEY, Kenya, Aug 24, 2011 (IPS) – As Kenya’s inflation rate reached 15.53 percent, compared to 3.18 percent in October 2010, the country’s poor have been struggling to afford the most basic of essentials. In some areas families can no longer rely on regular meals and have reduced them to one a day, others mostly eat potatoes to get by, and in one Rift Valley slum, poor families now buy toothpaste by the drop.
Jane Wabwire, a resident of the Kwa-Rhonda slum in Nakuru in the Rift Valley in western Kenya, says that “most basic items have now become luxuries due to the rising cost of goods.” Increases in the cost of food and fuel – including petroleum, diesel and paraffin – have been blamed for the inflation rise. Head of the Department of Economics at Egerton University, Njeri Muhia, told IPS that price determination and supply had led to the current inflation rate.
“Following the suppressed production of food three years in a row, there is a domestic undersupply, hence prices have escalated. This is not only (happening) in Kenya, reduced production is also (occurring) in Uganda and Tanzania from where Kenya imports food. Many countries in the world are also affected, Tanzania has banned the exportation of maize due to food insecurity there,” says Muhia.
She says the effect of the high inflation rate could persist and still be felt in six months time. Muhia says as long as the Kenyan shilling is under pressure from the dollar, the price of fuel and food will continue rising. In August the shilling reached a record low of 95.05 shillings to the dollar. “The low income segments are hardest hit by this situation,” says Muhia.
Paraffin, a necessity for cooking and lighting among a large majority of Kenya’s population, now retails at 101 Kenyan shillings (1.08 dollars) a litre, up from 60 shillings (64 cents) in June. This is despite government’s attempts to ease the rising fuel costs by cutting taxes on them by up to 30 percent.
Maize meal, commonly known as Ugali, has become increasingly unaffordable to many. It is a staple food to over 80 percent of Kenyans. The price of a two-kilogramme bag of maize meal continues to rise – from 130 shillings (1.4 dollars) in June to 136 shillings in July to 140 shillings (1.5 dollars) in August.
“I clean clothes for people and earn 150 shillings (1.60 dollars) by the evening, that is only when work is available,” says Wabwire. She says her husband is a casual labourer and works when he can find a job.
When she finds work she uses her wages to buy a quarter litre of paraffin for 50 shillings, cooking fat for 10 shillings, kale, commonly known as Sukuma wiki (which means “push the week” in Kiswahili), for 10 shillings and a kilogramme of non-sifted maize flour for 50 shillings.
“Many a time I save nothing, at other times I save twenty or thirty shillings for an emergency and for rent,” she says. IPS caught up with Wabwire as she queued with hundreds of other people expectantly waiting for their share of maize and beans being donated by a local church.
“I have to queue, it does not matter how long it will take, I have to wait until I get a share. It will keep my family going for a few days,” says Wabwire. he adds that some children in her area suffer from malnutrition because their families can only afford to feed them potatoes every day.
Sylvia Meltina, a resident of the Kivumbini slum – a Kiswahili word meaning “in the dust” – is one parent who has no option but to feed her children potatoes on most days. Her family of five no longer have regular meals because they can’t afford to buy food. “Potatoes and githeri (a mixture of maize and beans) have now become common in my house in the evening. Once every few days we buy non-sifted flour, which is cheaper than sifted flour, to cook Ugali since the children ask for it,” says Meltina. Meltina sells fruit and vegetables at a kiosk to earn a living.
“With the cost of virtually everything going up, you end up in debt by the end of the month because you cannot pay all your expenses from a daily income of about 30 shillings,” says Meltina. She decries rising rent and says to rent a single room in the slum now costs 2,500 shillings (28 dollars) compared to 1,500 shillings (17 dollars) late last year.
Nakuru legislator Lee Kinyanjui says there are about 20,000 extremely poor people in Nakuru’s slums who rely on hand outs and odd jobs to survive. “Some pupils who live near the municipal council dumpsite miss school to go and scavenge for food remains at the dump, this is so worrying,” says Kinyanjui, who is also the assistant minister for roads in the Rift Valley.
Peter Macharia, a senior investment manager at PineBridge Investments, says inflation could rise to 20 percent in the next few months. “When the cost of fuel is upset by even a shilling, the ripple effect is automatically felt by the (poor) in the slums since it distresses the smooth cycle of production,” says Amos Karoki, a financial consultant based in Nakuru. Poor families in Nakuru’s slums have resorted to buying toothpaste by the drop, at one shilling a drop. “That underscores how low families (in the slums) have sunk,” says Karoki.
Karoki says that because of Kenya’s general elections in 2012, next year will be a high spending one – a situation that could further drive up the inflation rate. Nevertheless, he predicts that the inflation rate will ease as the crop harvest is expected at the end of this year.
He recommends better food and tax policies and empowering people to save, invest and produce. Muhia suggests that government find long-term solutions to the poor harvest by shifting from rain-fed agriculture to irrigation. “The government is spending money for importation of capital goods…buying food worsen(s) the crisis,” she says.