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COST OF LIVING: Why are prices of unga (maize flour) and sugar out of reach?

Saturday July 29 2017

A debate meant to give Kenyans an opportunity to assess the suitability of presidential candidates ended in an anti-climax when only four of the eight contenders turned up, with President Uhuru Kenyatta, the Jubilee Party candidate, the notable absentee.

However, the nearly 10 million Kenyans who tuned in for the debates got some pointers from the four candidates led by opposition National Super Alliance flagbearer Raila Odinga on the problems facing the nation and how they would tackle them.

The EastAfrican’s Peter Munaita looks at the 10 issues that have dominated the election campaign but fears that they may not be the deciding factor on who wins on August 8.

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1. COST OF LIVING: Why are prices of unga (maize flour) and sugar out of reach?

The cost of living was shaping up to be a potential election decider until the government came up with a subsidised maize flour programme to counter the political backlash. Unga prices had skyrocketed to Ksh180 ($1.8) for a two kilogramme packet in June. Under the subsidised programme supported by massive imports, the price of a two kilogramme packet went down to Ksh90 (9 US cents).

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Distribution started with the usual headaches before supply stabilised while the scarcity of sugar, which had hit $2 per two-kilogramme packet, was redressed through imports.

However, at the heart of the matter are issues of poor planning, a tough business environment and reluctance to clamp down on cartels that several audits have confirmed feed the political class.

While basic foodstuff such as unga and sugar are easy examples of the rising cost of living, high energy tariffs and heavy taxation add to the burden.

Jubilee’s pledge to substantially bring down the cost of power has not been realised and current tariffs are being artificially supported by denying the power distributor permission to adjust the tariffs to commercial levels.

The Kenya Revenue Authority has become synonymous with missed tax collection targets after administrative hitches undermined its effort to in broaden the tax base to non-traditional sectors like capital gains and rental income.

The import of this is that only 2.5 million Kenyans who are in formal employment and several thousand companies pay their fair share of taxes. Added to the pressure of meeting living expenses are the unavoidable education and medical fees that eat away at the disposable income for a majority of the population that lives on less than Ksh200 ($2) a day.

Opinion polls released last week (by Ipsos and Infotrak) place the cost of living as the number one reason (53 per cent and 38 per cent, respectively) why respondents believe the country is headed in the wrong direction. Poverty and unequal distribution of resources combined come up as another nine per cent of concerns in the Infotrak survey.

These findings explain why social safety nets for the elderly, orphans and disabled feature high up in the Jubilee manifesto while Nasa has talked of enforcing the law on unilateral rent increases by landlords while implementing low cost housing schemes across the country.

Ipsos placed those not happy with the direction the country was headed at 61 per cent against 49 per cent in the Infotrak survey. Worth noting is that only in Central, Northeastern and Rift Valley (in the Infotrak poll) were a majority of the respondents optimistic of the future.

On the question of who they would vote for and despite blaming the president and leadership for steering the ship wrongly, a significant number of the respondents in this category flipped saying they would vote back the same leadership. This makes for a tighter race than would be expected were the cost of living a decisive voter issue.

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