Friends, it looks like Kenya’s been holding onto the tail of inflation like a mad bull. This past May, inflation leaped to 8%, not long after catching its breath at 7.9% from a peak of 9.2%. Our friends at the Central Bank of Kenya (CBK) have given the detective’s magnifying glass to food prices. They have found our beloved sugar as the prime suspect.
Brace Yourself: Unga and Sugar Prices are On a Wild Safari
We’re not fortune tellers, but with food prices soaring, it feels like we might need to pack parachutes soon. The choir of farmers and traders have sung it: brace for higher costs of ‘unga’ (maize flour) and sugar. Thanks to our fickle friend, forex, they’ve got their eyes on increased input and fuel costs, not to mention the quicksand of local production and surging import prices.
Sweet Nothings: Sky-high Sugar Prices
We thought sugar was sweet until May 2023 turned it sour, with a 2kg packet kissing the sky at KSh 450. Our CBK conductor, Patrick Njoroge, believes sugar prices, defying the reins of monetary policy, are running wild, stoking the inflation fire.
Inflation Drivers: Snippets from CBK’s Agriculture Survey
Between May 9 and 12, CBK went on a little treasure hunt. They came back with insights that paint a troubling picture of inflating food prices. The magnifying glass points to changes in food wholesale, retail prices, and production costs. Then there’s the duo of food and fuel prices hitting a new crescendo in May 2023, pushing inflation to jump a tiny 0.1% to reach 8%.
Unga Prices: The Mountain that Refuses to Bow
Even with the government pulling the ropes, ‘unga’ prices have decided to be the stubborn mule. A deep dive by kiongos.com shows that our favorite maize flour brands are on an uphill hike, averaging an average of KSh 215 per 2kg packet.
Finance Bill 2023: A Double-edged Sword?
The Finance Bill 2023, set to back President William Ruto’s lofty KSh 3.46 trillion 2023/24 budget, is a hot potato. Critics fear it might pinch our pockets even harder. Yet, the bill is en route for a second screening, with the government waving red flags at any rejection moves. Standing firm in his corner, President Ruto touts the bill as a golden ticket for economic growth and job creation. So, do we grit our teeth and hope for the best?