The prices of essential items, including soap, cooking gas and cooking oil, have risen by up to a third in the past 12 months, straining household budgets at a time when average private-sector pay is growing at the slowest pace in a decade.
Kenya National Bureau of Statistics (KNBS) data show that inflation rose from 5.08 percent in February to 5.6 percent in March on the back of a sharp increase in the prices of key household items like cooking gas, food and petrol.
This has forced many households, especially in the low-income segment, to reduce their shopping basket in an environment where firms have frozen salaries as they recover from Covid-19 economic hardships.
The rise in the cost of essential commodities could force workers to cut back on non-essential items like beer and airtime, ultimately hurting firms like EABl #ticker:EABL and Safaricom #ticker:SCOM .
Cooking gas has recorded the biggest jump in price among the essential items over the past year among items captured in the inflation report, pushing families to charcoal for cooking.
KNBS data show the price of the 13-kilogramme cooking increased 38 percent over the past year to an average of Sh2,866 in March, followed by cooking oil (35.15 percent), bar soap (20.88 percent), sukuma wiki (20.18 percent) and wheat flour (17.68 percent).
“Prices of food items in March 2022 were relatively higher compared with prices in March 2021,” KNBS said on Thursday.
The rise in the cost of basic commodities emerges in a period when workers’ pay is yet to recover from the effects of Covid-19, which triggered layoffs and pay cuts. The average earnings for workers in the private sector grew at the slowest pace in a decade in 2020 as pandemic-hit firms moved to slash salaries and adopt unpaid leave policies to contain costs.
Companies raised average monthly pay by 3.82 percent to Sh67,490 in the year ended June 2020, a steep drop from the 8.16 percent raise to Sh65,006 the year before.
KNBS is yet to release the 2021 data, but employers say it will take years for pay raises to return to pre-Covid levels, with firms struggling with elevated costs largely due to uncertainties related to the pandemic.
Costly crude oil in the wake of the Russian invasion of Ukraine, the imposition of 16 percent value-added tax (VAT) and the search for higher margins by the dealers have combined to send cooking gas prices to their highest level in Kenya’s […]
