In 2023, life became exceptionally challenging for Kenyans due to soaring cost of living. The public, exercising their right to speak out, repeatedly demanded explanations from the government regarding the steep increases in prices for essential items like food, energy, and critical services.
The responses from the government varied, with senior officials often blaming the previous administration and offering assurances with phrases like 'tutapanga,' 'tutatenga,' and 'tumeongea.'
Unfortunately, these promises yielded little to no tangible results.
Here are five basic commodities whose prices experienced the most significant spikes in 2023, exacerbating the hardships faced by citizens.
Unga
The cost of a 2-kilogram packet of sifted maize flour averaged Ksh220 in 2023; hitting Ksh250 in the first half of the year before dropping to Ksh180 in December.
This was very expensive and unmanageable for Kenyans, accounting for nearly half of the daily average income, Ksh 650, according to the Kenya National Bureau of Statistics (KNBS).
What caused the spike?
The jump in the price was precipitated by the decision by President William Ruto to do away with the subsidies introduced by the previous administration to bring down the cost of the commodity.
Ruto argued that subsidising consumption was a fool’s errand remarking that his government would chart a different path of subsidising production instead.
Another factor that contributed to the problem was low maize production across the country which pushed the cost up as the demand exceeded supply.
The government, after subsidising fertliser prices has exuded confidence that the price of unga will stablise while the prices of other food commodities will also come down.
Fuel
In January 2023, fuel prices experienced a significant surge, with Super Petrol reaching Ksh177.30 per litre, diesel at Ksh162.00 per litre, and kerosene at Ksh145.94 per litre.
This marked a notable Ksh50 increase compared to January 2022, reflecting a substantial upward trend.
In January 2022, regulatory measures by the Energy and Petroleum Regulatory Authority (EPRA) had set price caps at Ksh129.72 for Super Petrol, Ksh110.60 for diesel, and Ksh103.54 for kerosene.
However, by December 2023, these prices had escalated, with Super Petrol witnessing a Ksh40 per litre increase, diesel rising by Ksh41, and kerosene experiencing a Ksh63 spike.
This upward trajectory was primarily instigated by the enactment of the Finance Bill 2023, incorporating a 16 per cent value-added tax on petroleum products.
Notably, the cost of fuel has a ripple effect on the price of other commodities since it pushes up transportation costs.
Cooking Oil
The average cost of a litre of cooking oil in the country jumped from Ksh300 a litre in January to Ksh360 for the same unit in December.
In January, the high costs were attributed to the discrepancy between the supply and the national demand for the product.
The government then announced a duty-free window for the importation of edible oils to bridge the gap.
This would only stabilise the price a short while before the prices went up again in June.
According to traders, the exhaustion of the dollar reserves, and the weakening Kenyan Shilling made it almost impossible to ship in edible oil.
The Cabinet Secretary for Trade at the time, Moses Kuria, maintained that the withdrawal of duty on edible oils had the desired effect which was to drive prices downwards.
His claims were immediately disputed by both Kenyans and the media. One of the highlights from that period was when Kuria was baited on national television into saying that the importation had driven down the commodity’s prices.
Citizen TV then cut the live broadcast and brought in its Eldoret-based correspondent who was live at a supermarket. The journalist confirmed that the price of edible oil was still high.
It would later emerge that the importation of the edible oil, undertaken by the Kenya National Trading Corporation (KNTC) was a Ksh 17 billion scandal in the brewing.
CS Kuria went on to launch ‘Mama Pima’ cooking oil dispensers geared at selling the commodity in small units to Kenyans across the country.
Loans
Kenya experienced a deepening financial crisis in 2023, marked by a significant surge in the cost of credit resulting from a progressive escalation in the minimum lending rates.
In January, the Central Bank of Kenya (CBK) maintained the minimum lending rate for local banks at 8.75 percent following a Monetary Policy Committee (MPC) decision.
Throughout the year, this rate experienced a gradual increase during subsequent reviews.
By December 5, CBK announced a substantial upward revision, raising the minimum lending rate from 10.5 to 12.5 percent.
According to local banking policy, lending institutions are permitted to charge up to 7 percentage points above the minimum lending rate.
Consequently, individuals seeking new loans in December will bear a higher financial burden compared to those who borrowed at the beginning of the year.
Moreover, this revision will also impact individuals with existing loans, exacerbating the financial challenges faced by the Kenyans.
Passports and National ID Replacement
Interior Cabinet Secretary Kithure Kindiki was the subject of vitriol earlier in the year after he published a gazette notice seeking to increase the service costs of acquiring and replacing ID cards and passports.
In the gazette notice, Kindiki proposed increasing the cost of replacing an ID from Ksh100 to Ksh2,000.
He also proposed introducing a Ksh1,000 fee for persons seeking to acquire an ID for the first time.
In the same vein, the CS also announced an increase in passport acquisition service fees.
Kindiki’s gazette notice showed that the government was planning to increase the fee for an ordinary 66-page passport from Ksh7,500 to Ksh 12,000 and the fee for an ordinary 34-page passport from Ksh4,500 to Ksh7,500.
However, the gazette notice was instantly met with huge backlash forcing the govt to review its decision.
Kindiki would later announce new fees for ID replacement with Kenyans required to part ways with Ksh1,000 down from the previous Ksh2,000.
The passport fees however, remained unchanged.
However, a court sitting in Nairobi blocked implementation of the new fees citing the lack of public participation.
The implementation of the new fee structure has been halted even though the new fees were slated to take effect in 2024.
