Rising prices of staple maize flour—which rose to a record high of Sh150 a packet — and other foods become a political headache for President Uhuru Kenyatta as he sought a second term in August elections.
Nasa leader Raila Odinga used the high costs of living to portray Mr Kenyatta’s government as inept and uncaring, prompting the President to turn to a 2011 law to control flour prices.
The Treasury published a gazette notice giving legal backing for State control of sifted maize flour costs, marking the first time the order has been issued under the 2011 law allowing price control of essential goods.
President Uhuru Kenyatta turned to a dormant law approved by his predecessor, Mwai Kibaki, to lower maize flour prices that threatened to derail his quest for a second term in August elections.
Rising prices of staple maize flour—which rose to a record high of Sh150 a packet — and other foods become a political headache for President Uhuru Kenyatta as he sought a second term in August elections.
Nasa leader Raila Odinga used the high costs of living to portray Mr Kenyatta’s government as inept and uncaring, prompting the President to turn to a 2011 law to control flour prices.
The Treasury published a gazette notice giving legal backing for State control of sifted maize flour costs, marking the first time the order has been issued under the 2011 law allowing price control of essential goods.
Retailers found selling the two-kilogramme packet of subsidised maize flour above Sh90 risked a fine of Sh1 million or a five-year jail term in line with the gazette notice.
The staple maize flour fell 40 per cent within weeks in what lowered political debate over costly food, which saw inflation hit a 57-month high of 11.48 per cent in April, taking it beyond the Treasury’s preferred upper limit of 7.5 per cent.
Retailers were also limiting the amount of maize flour a single customer could buy as the shortages soured the national mood ahead of the polls. But the Kibaki law came in handy.
Mr Kibaki in September 2011 signed into law a Bill that allowed Kenya to return to price controls of any essential commodity after the practice was abandoned in the 1990s in favour of economic liberalisation.
The law allows the Finance minister to set maximum prices of gazetted essential commodities upon consultation with the relevant industry.
The order on maize flour is the first under the Price Control (Essential Goods) Act, 2011.
To cushion traders from losses the government on May 16 announced subsidies of Sh6 billion to maize importers to help lower the cost of flour, which had shot up due to a regional drought.
The subsidy cut the price of a 90kg bag of maize to Sh2, 300 from market cost above Sh4,000.
