EDITORIAL: Inflation rise a wake-up call for policy makers

Looking at what has dominated public discourse in the past couple of months, one gets the idea that Kenyans have their priorities wrong.

The latest official statistics show that the cost of living rose steeply during the period yet politics and fringe concerns such as the many tender wars for big government projects are the main focus.

Inflation has nearly doubled from about 5.2 per cent in September last year to 9.04 per cent – a four-year high that has certainly brought pain upon millions in the low income bracket.

Basically, inflation is being driven by higher cost of food in the wake of a prolonged drought and transport costs arising from the general recovery of petroleum prices in recent months.

An inflation figure is not just a number. It amounts to a real hit on people’s wallets – affecting their socio-economic welfare and therefore deserving more serious attention than it has received.

The statistics actually show that an increase in prices of basic food items were the main drivers of inflation in February.

Ordinarily, it should be expected that because of its direct impact on the lives of ordinary folks, high cost of living would top the national agenda – especially among politicians seeking their votes.

But alas! For many in the pampered political class, it is business as usual. They continue in their campaigns ahead of the August elections as if nothing has happened.

The sharp increase in inflation also seems to have caught policy makers by surprise.

Just a month ago the Central Bank of Kenya was exuding confidence that headline inflation would not rise past the policy target of 7.5 per cent despite clear indicators that there was a real risk of a surge in the short term.

Such slip-ups only mean that policy makers are left without the right instruments to make concrete interventions. It is worth remembering that when the price of crude fell in the international markets, the Treasury saw a good chance to hike the taxes on fuel.

Now that the price of crude is on the up, the effect of these tax increases will become even more apparent and pump prices might rise to record levels.

The food situation could and should have been mitigated with better forward planning since the drought was anticipated going by known weather patterns.

It is commendable that the government is redirecting resources from other commitments to tackle the food crisis, but more must be done at policy level to prevent the country from returning to the days of double digit inflation.