On November 29, the Kenya National Bureau of Statistics (KNBS) painted a grim picture, saying inflation will continue to rise in December.
By JOSHUA MASINDE jmasinde@ke.nationmedia.com AND Xinhua
Posted Friday, December 2 2011 at 22:00
Posted Friday, December 2 2011 at 22:00
IN SUMMARY
- Experts offer crucial tips that may help you enjoy your festive season, keep your pocket intact and avoid the January blue
Hopes of a happy Christmas for most Kenyans have faded with the rising cost of living.
Dreams of home ownership, affordable cars and petrol and a comfortable life have evaporated with daily increases in prices of goods and high interest rates.
The latest announcement came on Friday from the dominant mortgage lender, Housing Finance, that it was raising interest for new borrowers to 23 per cent and 16 per cent for existing customers, up from 14.5 per cent.
This means a prospective home owner borrowing Sh5 million from HF will pay Sh99,083 per month, up from Sh68,275 per month if the rate had been 14.5 per cent, a difference of Sh30,808 per over a 15-year repayment period.
Someone seeking Sh8 million to buy a house over the same period will pay Sh153,533 per month instead of Sh109,240, an increase of Sh44,293.
The new rates prompted the umbrella Protestant organisation, the National Council of Churches of Kenya, to warn that the rising cost of living was emerging as the biggest security threat.
“The reality is that Kenyans are being pushed to the fringes of poverty as their meagre incomes are no longer able to pay for basic necessities,” it said.
“Recent strikes may just be a pointer to the threat of chaos in the labour sector,” it said.
The cost of cooking gas has doubled, with a 13-kilogramme cylinder costing over Sh3,000.
Since the introduction of price caps on fuel 11 months ago, pump prices have gone up by 32 per cent for super petrol, 30.7 per cent for diesel and 25 per cent for kerosene.
Travellers this festive season will spend a third more than they did last year. Those using public transport are not spared either as fares have also gone up by 30 per cent compared to November last year.
The festival rush usually pushes up fares by more than double.
Those intending to lodge will have to budget for an extra 21.5 per cent as restaurants and hotels have increased rates by that margin, with extra recreation services also going up by 13.41 per cent.
Those who want to refurbish their houses will have to spend an extra 13.4 per cent even as the cost of clothes and shoes goes up by 10 per cent.
The average price of a kilogramme of beef rose from Sh299.56 in October to Sh309.85 in November 2011.
“This increase in prices cannot be corrected by an increase in salaries. In any case, modern sector employment consists of less than 20 per cent of the workforce,” the Federation of Kenya Employers said.
“This is the festive season when people like to entertain their families and enjoy themselves. However, with the rising cost of goods and services, we have no choice but to reduce spending,” a banker in Nairobi, Mr Samuel Munyendo, said.
The-32-year-old father of two said most people are struggling to make ends meet.
“I often ask myself that if I, with a constant salary, have to struggle to meet my needs, what about the unemployed?” he asked.
Mr Munyendo’s daily expenses have doubled from Sh200 to S400 in the past three months.
“Most of that money goes to transport and on lunch. Sometimes I skip lunch” he said. The father of two says most Kenyans are finding it hard to survive.
On November 29, the Kenya National Bureau of Statistics (KNBS) painted a grim picture, saying inflation will continue to rise in December.
The bureau said inflation had shot up to 19.72 per cent in November, up from 18.91 per cent the previous month.
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