By Isaac Swila
Despite the tough economic times the country has experienced in the past year, the Central Bank of Kenya, in its prognosis, is upbeat that the inflation rate will steadily fall in coming months.
CBK Governor Patrick Njoroge said last month that inflation is likely to reduce within the “preferred range” as food prices “keep falling”.
“We expect in the next two months inflation will continue to come down but within this quarter it will breach the 7.5% mark,” Njoroge told journalists at a press briefing, adding, “…We are on solid ground that this (inflation) will be coming down into the target,” the Governor enthused.
Njoroge’s assurances come at a time when the country is going through an economic depression following the steady rise in the prices of basic commodities, some even getting out of the economic reach of most – sugar and flour being notable. A 2kg packet of sugar currently retails at an average of Sh360, while 2kg flour, most expensive in May, cost Sh240 on average.
Government, following mounting public pressure, stepped in to stem the spiraling wave by introducing subsidized maize flour at flat rate of Sh90. But even then, consumers continue to lament about hoarding of the vital commodity by middlemen, which has made the supply of the subsidized flour fail to reach certain market segments.
Kenya’s inflation fell to 9.21% year-on-year in June from 11.70% a month earlier, which is still above the desired 7.5% mark.
Secondly, there are fears that with election fever likely to grip the country in the days preceding and after the polls, the shilling could nosedive against major world currencies.
Election observers, particularly from the European Union, have warned that trouble hot pots such as Nairobi’s informal settlements could be rocked by violence, which is feared could further unsettle the economy.
In 2008, for instance, the shilling sharply fell to major currencies following two months of post-election chaos that rocked the country.
Both the Jubilee Government and the Opposition Nasa have made economic revival their top campaign tool, with the latter promising to put a lot of energy in reviving the moribund manufacturing industry in a bid to insulate the economy as well as create more jobs for the surging skilled labour bracket.
Kenya’s rate of joblessness currently stands at 45%.
