Economy

Food inflation hits Nairobi’s low income households hardest

FRUITS

A fruit and vegetables trader: Vegetable prices have gone up due to delayed rains. PHOTO | FILE

Summary

  • Inflation for Nairobi’s lower income earners increased by 1.1 percentage points to hit 6.32 per cent last month compared to affluent homes where the cost of living rose by a mere 0.07 percentage point to 1.81 per cent.

Rising cost of foodstuff is pushing most of Nairobi’s poor households to the edge even as cheap fuel continues to cut the daily expenses of rich families, official data indicate.

Inflation for Nairobi’s lower income earners increased by 1.1 percentage points to hit 6.32 per cent last month compared to affluent homes where the cost of living rose by a mere 0.07 percentage point to 1.81 per cent.

James Gatungu, director of production statistics at the Kenya National Bureau of Statistics (KNBS) said the weight of last month’s food inflation fell heavily on poor households since they spend virtually all their income on such items.

“Lower income households were affected more than other groups due to increase in food prices,” said Mr Gatungu.

Poor families spend 42.5 per cent of their income on food while the rich spend only seven per cent according KNBS, highlighting the exposure of the poor to food inflation.

By comparison, Nairobi’s wealthy have on average spent the largest portion of their income — 27.9 per cent —on transport, gaining from low petroleum prices.

Petrol prices have been retailing at levels below Sh100 a litre since January from a high of Sh116.62 a litre last August.

Middle class homes —whose inflation inched up 0.01 percentage point to 3.24 per cent last month – spent 22 per cent of their income on food.

“Between February and March, the prices of food increased by 3.18 per cent for lower income, 2.37 per cent for middle income and 1.37 per cent for upper income group,” said Mr Gatungu citing a prolonged dry spell in first quarter of the year.

A rise in the cost of living measure means households are forced to shoulder higher commodity prices worsening their financial status in a country beset by high unemployment levels of about 40 per cent.

READ: Nairobi’s wealthy benefit most from falling inflation

The average price of a kilogramme of tomatoes last month went up by four shillings to Sh99 compared to February, a kilo of cabbages rose by seven shillings to Sh44 while carrots went up by five shillings to Sh66 per kilo, the bureau data show.

A 500- millilitre packet of milk cost a shilling higher in March at Sh51 while kale (sukuma wiki) went up four shillings to Sh42 per kilo. The climbing commodity prices have been attributed to delayed rains whose season is on, with showers experienced in several parts of the country – signalling improved supply of foodstuff in coming months.

Kenya’s overall inflation rose to 6.31 per cent in March from 5.61 per cent the previous month, piling pressure on almost half of the country’s households who live on under a dollar per day.

At 1.81 per cent, the cost of living measure for wealthy homes has significantly eased from a high of 9.58 per cent last August when they were most exposed to inflationary pressures compared to the poor.

KNBS defines low-income earners as those spending less than Sh23,670 monthly, middle class (between Sh23,671 and Sh120,000) and upper income as households with expenses in excess of Sh120,000.

The bureau examines consumption data for Nairobi separately because it has increased its share of the national wealth in the past five years despite government efforts to encourage investments outside the city.

Official data show that the capital city accounted for more than a third of the country’s labour earnings and more than half of the top earners.