Urban residents pay an arm and a leg to stay alive

Saturday March 25 2017

A fruit and vegetables trader: Pressure is being exerted on low-income earners, who are finding it hard to make ends meet. PHOTO | FILE

A fruit and vegetables trader: Pressure is being exerted on low-income earners, who are finding it hard to make ends meet. PHOTO | FILE  

By GERALD ANDAE
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In Nairobi and other urban areas, it is now costing an arm and a leg to have a roof over one’s head and put food on the table. This demystifies a long-held perception that life in the city is a bed of roses. 

With inflation figures beyond Central Bank of Kenya (CBK) preferred upper limit of 7.5 per cent, pressure is being exerted on low-income earners, who are finding it hard to make ends meet.

Inflationary pressure has been pushed by a steady rise in food prices, which saw the cost of living rise to 9.04 per cent in February from 6.99 per cent a month earlier, according to data from the Kenya National Bureau of Statistics.

Economists say with the increased cost of living, households will be forced to adjust their budgets and direct their spending to basics.

The cost of food and other basic items has shot up significantly, reducing the purchasing power of most Kenyans in the low-income bracket.

FIVE-YEAR HIGH

The price of maize flour has just crossed the Sh130 mark per 2kg packet, registering a five-year high, with the same quantity of sugar retailing at Sh290.

The situation has been worsened by the ongoing drought that has seen the price of agricultural produce such as onions, tomatoes and other groceries rise significantly, with city dwellers paying dearly for water from vendors, owing to the shortage and a rationing programme.

Economist Ansetze Were says the high cost of living will impact negatively on low-income earners, with the higher portion of their money going to meet basic needs at the expense of other requirements.

“With the rise in the cost of living, households will give preference to food items as their income will be dedicated more to things that matter the most,” says Ms Ansetze.

Ms Ansetze said hard economic times will force poor households to significantly cut on other things such as educational needs and medicare just to put food on the table.

She says the recent rise in oil prices will add more pressure to the limited earnings, especially the higher price of kerosene, which is used mainly by poor households for lighting and cooking.

Food, energy and transport have a significant weighting in the basket of goods and services used to measure inflation, making them the main drivers of the cost of living.

Government estimates show that about 2.7 million people are in need of food aid after low rainfall in October and November. The next rainy season is not due before April.

The food crisis has prompted a review of the national budget, with the Treasury cutting further spending on development projects to free Sh6.9 billion for drought mitigation.

A kilogramme of sukuma wiki rose to Sh54 from Sh36.8 over the past year, while a similar quantity of cabbages rose by Sh26 to Sh74.8 over the period.

The increase in food prices has wrecked household budgets.

In February, consumers also had to contend with rising power bills following an increase in the forex levy to a 15-month high owing to weakening of the Kenya shilling against the US dollar.