Inflation hits lower-income families living in Nairobi the most

Lower-income families living in Nairobi have been the hardest hit in terms of the rising cost of living in the past one year, with inflation for this segment remaining above the national average for 11 straight months.

Official data shows that the average inflation for poor households in Nairobi was at 6.08 percent in May in contrast with that of middle income (2.68 per cent) and upper income (2.67 per cent) residing in the city.

The figure, though a drop from the peak of 8.36 per cent in February, is above the national average of 5.33 per cent for the past 11 months. The last time the inflation rate of Nairobi’s poor homes was below that of the rest of households in Kenya was in July last year when it averaged 6.13 per cent. This was in contrast with the national average of 6.27 per cent.

COST OF LIVING

The lower cost of living enjoyed by middle and upper-income Nairobi homes and the rest of the urban areas in Kenya helped lower the May 2020 inflation to a 14-month low of 4.61 per cent, partially masking the woes facing poor homes.

The difference in inflation levels among Nairobi’s income segments as disclosed by the Kenya National Bureau of Statistics is linked to the diverse consumption habits.

While the rich spend a larger share of their budget on transport, the middle class use their money on utilities and rent while food takes the bulk of the poor’s budget.

Data for last month shows a basket of goods classified as food and non-alcoholic beverages had seen the highest year-on-year rise (8.15 per cent) when compared with the other baskets used to measure inflation.

FOOD PRICE RISE

KNBS’ second survey on the impact of the Covid-19 virus on households showed that 78.8 per cent of respondents have seen an increase in food prices last month, further hitting low income households.

The survey further said 61.9 per cent of respondents were out of work due to coronavirus-related challenges, up from 49.9 per cent in May.