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Consumer Index remains highest in five years as Finance Bill debate flops

BY Walter Odhiambo

The country’s Consumer Price Index (CPI) has increased by 1.79 per cent from 182.98 in March to 186.24 in April 2017, according to Kenya National Bureau of Statistic’s latest data, while overall inflation rate stood at 11.48 per cent in April 2017. All the basic commodities, including food and non-alcoholic drinks had their CPI increase by 3.55 percent between March and April 2017.

“Between March and April 2017, Food and Non-Alcoholic Drinks’ Index increased by 3.55 per cent. As shown, this was mainly attributed to increase in prices of several food items including, Sukuma wiki, spinach, maize flour, milk, potatoes, cabbages, onions and maize grain,’’ says KNBS.

This increase in food prices, the statistics body says, was partly contributed by prevailing drought conditions, which has seen farmers lose their crops and animals due to harsh weather. The year-on-year food inflation stood at 20.98 per cent in April 2017, the highest ever recorded in five years.

“Despite a notable fall in the cost of kerosene, housing, water, electricity, gas and other fuels’ index increased by 0.63 per cent partly due to increase in cost of house rents, other cooking fuels and water services. The increase observed in the cost of electricity was mainly attributed to higher foreign exchange adjustment charges per KWh of electricity consumed in April 2017,’’ continues the KNBS CPI report.

The high inflation and high cost of living had pushed the presidency to a corner following pressure from Kenyans and politicians on how life has grown unbearable to the citizen. This prompted President Uhuru to order an Executive Bill on food prices and instructed the Leader of Majority in the National Assembly Aden Duale to reconvene Parliament.

“In addition to other measures the President has already taken through the Treasury, he has sent to Parliament fresh measures in a supplementary budget to address the challenges of food security as well as cost of living,” read a statement from State House.

However, the reconvening of Parliament came under criticism from some Opposition MPs, who called it a mere public relations excersise. Ugunja MP Opiyo Wandayi says the move is too little too late and will have no fruition. “What we are seeing happening is not likely to address this crisis for the long term. As a member of the Parliamentary Committee of Agriculture, I can confirm that there are no Agricultural Policies this regime has put in place since it got into power,” he said.

Machakos MP Dan Maanzo said the Jubilee Government has no excuse and blaming drought for the crisis is lying to Kenyans. He said the Government had failed starting from its flagship project of Galana Kolalu Irrigation Project. “We need enough food for the people. The President has to be serious with relevant ministries, including Devolution, Agriculture and Livestock. That is the only way to have a food secure nation.”

While presenting the Bill in Parliament, Duale, who is also the Garissa MP, said the country faces challenges of inadequate food supply, which the Bill sought to address. “Our economy still faces challenges ranging from inadequate food supply, unemployment, poverty, income inequality and the drought, which have caused high food prices, and all of which this Bill seeks to adress,” he said. The Bill proposed to remove VAT on maize flour, wheat flour and the ordinary bread.

But the Financial Bill failed to take off in Parliament due to lack of quorum. Speaking in Parliament during the session, Rarieda MP Nicholus Gumbo said it was an exercise in futility for the Government to focus on grandiose things instead of feeding Kenyans.

“The problem of food security in Kenya does not require rocket science. All it requires is for us to realign our policies and priorities so that we know that as we aim for this grandiose things of taking electricity electricity to grass-thatched houses, it is an exercise in futility before we start with the basics to be able to feed our people,’’ he said in the chambers.

Coming under criticism was also the proposal in the Bill that the Pay As You Earn (PAYE) tax goes up by 10 per cent, which Kiminini MP Chris Walamwa said would adversely affect salaries of workers and only burden them more.

“The net effect of the extra 10 per cent PAYE cut, Mr Speaker, is when you get your salary Mr Speaker, whatever will go to the pocket will be taxed. It will not enable the common mwananchi, Mr Speaker, to afford the prices of basic commodities,” he said.

If the Finance Bill had been passed in Parliament, it would have been an expenditure statement introduced to provide funds to the Government to meet new or additional expenses in the current fiscal year. On this year’s Labour Day celebrations, President Uhuru Kenyatta directed a raise of minimum wage to 18 per cent, saying his directive was as a result of the high cost of living and it was unfair to subject low income earners to heavy taxation with the current high cost of living and high inflation.

 

 

 

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Written by The Kenyan Weekly

The Kenyan Weekly newspaper is a fresh general-news publication published on newsprint once a week.

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