Editorials

Tame rising food prices

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A trader at City Park Market in Nairobi. FILE PHOTO | NMG

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Summary

  • The fresh rise in the prices of key food items should be a serious concern given the economic hardship already facing many households due to the Covid-19.
  • The retail prices of household items including onions, wheat flour, cooking oil, bread and milk have all increased, adding pressure on already cash-starved households.

The fresh rise in the prices of key food items should be a serious concern given the economic hardship already facing many households due to the Covid-19.

The retail prices of household items including onions, wheat flour, cooking oil, bread and milk have all increased, adding pressure on already cash-starved households.

This has a potentially serious welfare impact that must be addressed at the earliest opportunity possible because it affects the purchasing power of poor households and worsens the composition of their diet.

The State should intervene and spare poor households from further pain in an economy, which is already weighed down by the pandemic.

Measures such as tax reliefs on imported food items would come handy in helping to stabilise commodity prices and spare poor households more financial distress. The State should also prepare to release stocks from the national strategic food reserve to bridge supply shortfall in the market.

Besides hurting individual households, high inflation due to increases in the cost of food and other items also hurts a country’s savings and investment profile.

Inflation erodes real savings and investment returns — making it a put off for most investors eyeing to increase their long-term real purchasing power.