Kenya declares drought a national disaster

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null 1/1 NAIROBI, Kenya, May 30 - President Mwai Kibaki has declared the persistent drought a national disaster. During a meeting with legislators from the North Eastern Province and Cabinet ministers from line ministries at Harambee House, the President directed that immediate interventions be put in place to cushion affected Kenyans and their livestock. The Head of State further directed Treasury to prepare the necessary instruments of approval to facilitate urgent importation of maize to boost the current stocks being held at the nation’s Strategic Grain Reserves. The President said: “Immediate interventions must be instituted to protect Kenyans who are affected by the drought. The Government must expedite the process of availing foodstuffs and other vital supplies.” Legislators from the Northern Kenya, led by the Minister for Defence Yusuf Haji, appealed for the doubling of relief food being delivered to affected people terming the current ratios inadequate. They called on the Government to avail more water bowsers in every constituency in the region to facilitate efficient transportation of water to reach residents and their livestock to locations they have moved in search of pasture. The Ministry of Water and Irrigation will get additional funds amounting Sh600m so as to effectively respond to current drought. In order to cushion livestock farmers from the region and other parts of the country from incurring hefty loses the Government allocated Sh1 billion to the Ministry of Livestock of which Sh500m will be used for livestock off-take and the balance to be channeled through the Agricultural Finance Corporation. The President directed all relevant ministries involved to expedite their operation and ensure that affected citizens cushioned from needless suffering. The Head of State further called on public servants to ensure that wananchi receive prompt attention and efficient, quality government services. President Kibaki said cumbersome and lengthy procedures should be reformed in tandem with current realities witnessed in the modernizing world. In attendance were the Cabinet Ministers Prof George Saitoti, Esther Murugi, Beth Mugo, Mohammed Elmi, Charity Ngilu, Otieno Kajwang, Mohammed Kuti, Deputy Speaker Farah Maalim, Head of Public Service and Secretary to the Cabinet Amb Francis Muthaura, legislators from North Eastern and other senior Government officials.

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MPs pick 11 members to vet judicial nominees

BY LABAN WANAMBISI

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null 1/1 NAIROBI, Kenya May 30 - The House Business Committee on Monday agreed to establish an eleven member ad hoc committee to vet nominees to the post of the Chief Justice, Deputy Chief Justice and Director of Public Prosecutions. The two hour meeting at Parliament buildings agreed that the two party whips come up with new names to the Committee to be presented to the House when it resumes on Tuesday afternoon. The move aims at ensuring the constitution implementation bills are not delayed due to political wrangles in the troubled justice and legal affairs committee. The Orange Democratic Movement (ODM) chief whip Jakoyo Midiwo maintained that he will be presenting a fresh list but refused to divulge names of the new members. Mr Midiwo said: “My list is ready, and I am only waiting for the Party of National Unity counterpart to forward their list.” The meeting, which was chaired by Deputy Leader of Government Business Amos Kimunya, agreed that the committee be comprised of six members from ODM and five from PNU. The House Business Committee was scheduled to hold another meeting on Tuesday at mid-day before presenting the names to Parliament. The meeting on Monday came after the Orange Democratic Movement rejected an agreement at a Speaker’s Kamukunji on formation of a 15 member ad hoc committee composed of all members of Justice Committee and an additional five from PNU and ODM. It had also been resolved that the new committee be chaired by one of the ODM members, since PNU’s Mandera Central MP Mohammed Abdikadir already chairs the Commission for the Implementation of the new Constitution (CIOC). The ODM’s parliamentary group meeting on Friday under the chairmanship of Deputy Prime Minister Musalia Mudavadi resolved to send the six new names to Monday’s meeting. The crisis in the committee has threatened to derail debate on the nominees for Chief Justice, Deputy CJ and Director of Public Prosecutions since members have not met since last week as expected to draft a report before Wednesday. When the names were tabled in Parliament a week ago, the committee was expected to scrutinise them and hand over their recommendations to MPs by May 25. Ideally, the Independent Electoral and Boundaries Commission Bill as well as the Salaries and Remuneration Commission Bill should have gone through the said committee but an impasse saw them taken up by the Constitutional Implementation Oversight Committee. The Parliamentary Committee on Legal Affairs chaired by Budalang'i MP Ababu Namwamba has been embroiled in wrangles since late April when eight members demanded fresh elections arguing that they had lost confidence in their chairman.

Read more: http://capitalfm.co.ke/news/Kenyanews/MPs-pick-11-members-to-vet-judicial-nominees-13007.html#ixzz1NsdE91Mu
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Survey says Kenyans unhappy with govt

BY WAMBUI NDONGA

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null 1/1 KACC Director PLO Lumumba/Mike Kariuki NAIROBI, Kenya, May 30 - Close to 50 percent of Kenyans are unhappy with the country’s governance and leadership structures terming them poor, according to a survey commissioned by five non-governmental organisations. The report, dubbed the Citizens Scorecard says 49.3 percent of Kenyans are concerned with the manner in which the country’s affairs are managed noting that it remains one of the biggest setbacks in the quest for reforms. Speaking during the report’s launch on Monday, Kenya Anti Corruption Commission (KACC) Director Patrick Lumumba argued that the country’s economic progression would be hampered if there were no proper political reforms. He argued that the incessant lack of accountability and transparency among the political class dampened efforts to rid the country of poverty as it geared up for Vision 2030. “Which investor will come to Kenya when companies like Eveready are threatening to close their factories because we are allowing counterfeits to come here? When the political class is in the business of bickering? Who is that suicidal investor?” he quipped. The anti corruption czar also raised the red flag over the brain drain being witnessed in the country saying it ought to be addressed. Prof Lumumba noted that Kenya continued losing tremendous resources in human capacity due to the high levels of unemployment. According to the survey that was conducted in October 2010, unemployment was listed as the main economic problem with 17.3 percent of the 2,000 respondents singling it out. He added that employers should tackle tribalism and nepotism for the country to achieve economic growth noting that the two vices topped the list of social problems among Kenyans. “If you walk the face of Africa and in any other parts of the world you will find Kenyans there; they are just waiting to come home where they hope to be judged by the content of their character not by their ethnic extraction and those who know them,” he said. He also called on the government to undertake adequate reforms in the agriculture sector as it formed the backbone to Kenya’s economy. Prof Lumumba argued that if the sector was revamped accordingly it would create employment opportunities for Kenyans across the board. He further challenged the government to get rid off all corrupt individuals in the industry saying they risked shutting it down. “Kenya can only grow when agriculture is given its pride of place not when our veterinary lab, which is the biggest in East Africa, has been grabbed by the mandarins. How can we not have seeds yet there is a managing director who continues earning a salary?” he posed. Prof Lumumba also warned Kenyans against crucifying leaders who were qualified on flimsy grounds saying it undermined the country’s growth. He instead asked Kenyans to judge their leaders by the standards set by Chapter Six of the Constitution. “When you are good and when you are capable of delivering you will be accused of every crime on earth expect the second world war and the crucifixion of Christ,” he said. Meanwhile Kenya Human Rights Commission Executive Director Muthoni Wanyeki warned the political class against inciting negative ethnic sentiments ahead of the 2012 elections. The report was carried out by five civil societies and was conducted in 15 districts in six regions of the country. Of the 2,000 respondents 1,058 were men and 944 were women.  Follow us at TWITTER@CapitalFM_Kenya and the author at https://twitter.com/wambuindonga

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Kenya's AG threatens to sue Ocampo

Written By:Daniel Waitere,    Posted: Mon, May 30, 2011

Attorney General Amos Wako has threatened to sue ICC prosecutor Luis Moreno Ocampo for questioning the government's will to protect witnesses in the post election case and suggesting that it could actually be shielding the suspects from prosecution.

Wako who is away in Switzerland has termed Ocampo's remarks as unwarranted and defended the government's right to challenge the admissibility of Ocampo's application at the ICC.

In a statement sent to newsrooms on Monday Wako says; "I observe with great concern the statements attributed to Luis Moreno Ocampo questioning whether the government is protecting suspects from investigation and whether the government wants justice for the victims."

The ICC prosecutor is understandably feeling frustrated following concerted efforts by the government to have the ICC cases deferred while a local tribunal is established to take up the matter.

Also standing in the way Ocampo's case is the challenge of admissibility filed by the government seeking the ICC to reject Ocampo's application on the basis that the crimes alleged to have been committed do not meet the threshold of crimes against humanity.

But according to Wako the government of Kenya has the right under the Rome Statute to challenge the admissibility of the cases arising out of the post election violence and that- that right should not be the subject of vilification by the prosecutor outside the court.

"Kenya has played a leading role as a member of the Rome statute and supporter of the ICC and will continue to do so. The government of Kenya has the right under the Rome statute to challenge the admissibility of the cases arising out of the Post Election Violence and this right should not be the subject of vilification by the prosecutor outside the court. "

Wako now says the remarks by Ocampo on a matter before the ICC amounts to undue interference with the due process before the ICC which translates to contempt which he has now instructed State lawyers to act on.

"Each statement attributed to Mr. Ocampo covers an issue before the court itself and for determination by the court and not by the Prosecutor. It is improper for Mr. Ocampo to make such public statements which could have the effect of interfering with the due process before the International Criminal court. In municipal or domestic law these could well amount to acting in Contempt of court. I am therefore instructing our Attorneys to look into this matter and if appropriate bring it to the attention of the ICC."

Kenyans raise red flag on redundancy

Written By:Irene Muchuma,    Posted: Mon, May 30, 2011

The PLO now wants the MPS to get their act together and deliver key reforms

Kenyans have raised the red flag on redundancy, high cost of living and ethnicity as the greatest challenges facing the country.

A Score Card survey released Monday indicates that 17 percent of Kenyans are worried about employment opportunities with the slow pace of development being Kenya's least concern at 2 percent.

Speaking while officiating the event at a Nairobi Hotel, Kenya Anti Corruption Commission Director PLO Lumumba attributed development loopholes to nepotism and negative ethnicity in governance.

Lumumba reiterated that for the country to be able to fight corruption effectively, it was important that public offices are occupied by leaders with high intellectual capacity who cannot only deliver essential services but also shun tribalism.

The survey shows that the overall government performance index stands at six, in a scale of one to 10 with one being poor and ten being excellent.

At the same time the survey dubbed The Score Card by Strategic Public Relations and Research Ltd stated key economic issues being unemployment at the rate of 17 percent, cost of living 13percent and poor road network and infrastructure at 11 percent.

Tribalism and Nepotism were rated the top social issues at 22% followed by insecurity and violence at 12 percent and non availability of adequate medical and health care at 7.9%

The report revealed that Kenyans felt the government must address employment issues, fight corruption and tribalism, restore fundamental rights of Kenyans and cooperate with ICC to end impunity.

However 79 percent are optimistic that the new constitution will turn a new page in their lives with 17 percent yet to decide. But on the hand, 17 percent of Kenyans believe with the dispensation of the new constitution they will have to pay more taxes.

Eight percent of Kenyans want the fight against corruption to be hastened with seven percent lobbying for restoration of fundamental rights.

The score card was recommended as a tool to rate the performance of the government on leadership and governance.

The research was done in Kisumu, Machakos, Kilifi, Kajiado, Busia, Muranga and Mombasa Counties among 2002 respondents.

Cartoon 30.05.11

Palaver

Folks, stay away from your housekeeper, hotel maid or any other maiden for that matter. See all the trouble it has brought married former IMF chief and presidential hopeful Dominique Strauss-Kahn and Arnold Schwarzenegger. Now if only their wives could sue for divorce, they could be making a very smart move towards upward mobility. And of course, a not-so-tiny fortune. Should Schwarzenegger’s wife Maria Shriver steer herself onto Fortune Street by filing for divorce, not-so-poor Arnie’s little romp with former housekeeper Mildred Baena will set him back £155 million (don’t bother converting this into Kenya Shillings).Avid Palaverite PW was horrified to read in this newspaper last week that a former traffic boss, appeared in court, charged with — hold your breath — committing eight traffic offences! Isn’t it strange he has achieved what some British comedian once referred to, chillingly, as appointing an arsonist a fire chief? Just a thought! So, did he start committing such offences after leaving the police force (for whatever reason!) or is it disdain for the laws he does not enforce any more? More like the chicken and egg conundrum...
Evergreen Gichugu MP Martha Karua is not one to mince her words when caught in any debate, but the Iron Lady seems to be mellowing as she eyes that seat on the Hill. Last week, she burst into Eldoret town, alighted from her car and walked into the stalls along the Oginga Odinga Road. As the mob of excited traders grew, she even had time to gulp down a glass of fresh juice one trader offered her. Remember Moi’s kiosk meal? Kalonzo’s IDP camp tincup tea? Njonjo’s Kosewe fish lunch? Folks, these are Man-of-the-People statements.
And finally…
Palestinian Authority President Mahmoud Abbas has decided to seize the moment as revolution fever sweeps the Arab world and is appealing for a vote at the UN on Palestinian independence. He wants international recognition of an independent Palestinian state, saying "Palestinians cannot wait indefinitely" for their own state. Wonder whether Israeli Prime Minister Benjamin Netanyahu shares Abbas’ optimism.
editorial@standardmedia.co.ke

Why Ocampo Six now on their own

By David Ochami, Evelyn Kwamboka and Cyrus OmbatiAll the Ocampo Six cases will now proceed to confirmation hearing after Government failed to stop them through an admissibility challenge and claims of fresh CID investigations of post-election suspects.
Now on their own, the suspects must now fight the charges facing them, against which The Hague judges will decide if there is adequate evidence to sustain trials, during the September 1 and 21 confirmation hearings. This is because the State lost the only means by which it could reclaim the cases and handle them locally.
It also goes that the six now have only one remedy in law — to fight ICC Prosecutor Luis Moreno-Ocampo’s evidence through the route defined by the Rome Statute, and in the ICC courtroom.

Ocampo

But there is only one window left: Kenya has five days to appeal the ruling.
The decision by International Criminal Court’s Pre-Trial Chamber II Judges means even the option of special local tribunal Kenya had dangled before the ICC in a bid to persuade it to surrender the cases against the six to her courts, has been rendered inconsequential and unhelpful in stopping the two cases.
The biggest blow was to President Kibaki whose Government has fought hard to block the cases on the basis it should be trusted to handle them under the new Constitution, and in the environment of a reformed Judiciary soon to get a new Chief Justice and Director of Public Prosecutions.
It must have been the hardest blow to Kibaki yet since Moreno-Ocampo read his list of high-profile Kenyans he wants charged with crimes against humanity.
Undiplomatic reactionThe angry and uncharacteristically undiplomatic reaction by Attorney General Amos Wako to Ocampo’s accusation on Sunday that the State was sabotaging his cases and protecting the suspects, seemed to capture the Government’s bitterness and desperation over the turn of events.
It was also instrumental that, as with all statements cleared by the Presidency, Wako’s was posted by the Government Spokesman Dr Alfred Mutua in his official website.
Wako said he had instructed lawyers representing the Government at the ICC to look into the matter and take appropriate action.
"I am therefore instructing our Attorneys to look into this matter and if appropriate bring it to the attention of the ICC," added Wako in a statement he sent from Geneva, Switzerland.
Wako hit out Moreno-Ocampo arguing the statements amounted to interfering with the cases at the ICC.
"It is improper for Ocampo to make such public statements which could have the effect of interfering with the due process before the International Criminal Court. In municipal or domestic law, these could well amount to acting in contempt of court," he added.
Credible investigationsThe AG said Kenya had played a leading role as a member if the Rome Statute and supporter of the ICC, and will continue to do so. But it also appeared Moreno-Ocampo’s damning accusations against President Kibaki’s government on Sunday, last night’s arrival of ICC delegation for crucial talk with State officials, and today’s meeting between the ICC team and Cabinet sub-committee on The Hague matter, were choreographed or synchronised.
Judges Ekaterina Trendafilova, the chamber’s Presiding Judge, Judge Hans-Peter Kaul and Judge Cuno Tarfusser ruled Kenya had failed to institute credible investigations or prosecutions against the six suspects. They also found out the investigations ordered by the AG for CID to commence fresh investigations against post-election suspects was given two good weeks after Kenya’s expatriate lawyers filed the case challenging the admissibility or legality of ICC cases against her subjects, at a time she argued her judicial environment was far improved and could be trusted to work impartially.
Kenya had requested for a six-month period within which it would prove to ICC that it meant business when it said it could be trusted to dispense justice to both the suspects and victims of post-election violence.
But in the end, the Judges ruled the two cases were admissible, and would go on, and that the government’s case was weak and unconvincing.
The ruling came as the Cabinet sub-committee on The Hague affair; chaired by Internal Security minister Prof George Saitoti, who doubles up as acting Foreign minister, dusted their files in readiness to meet the ICC delegation today.
During the meeting it is expected the ICC team will confront the ministers with reasons why the Prosecutor’s office believes Government is sabotaging his cases.
The delegation is also expected to meet President Kibaki and Prime Minister Raila Odinga to table ICC’s grievances against Kenya’s official handling of the cases against the Ocampo Six, especially the expensive ‘shuttle-diplomacy’ against The Hague that was sanctioned by the President Kibaki and executed by Vice President Kalonzo Musyoka.
The sub-committee is expected to first meet and forge a common ground ahead of the talks forced by Moreno-Ocampo’s damning accusations against the Government on Sunday.
AccusationsTop on the list of accusations is alleged protection of the Ocampo Six. It is expected continued retention of Uhuru Kenyatta, as Deputy Prime Minister and Finance Minister, as well as Mr Francis Muthaura as Head of Civil Service despite Moreno-Ocampo’s request that they be removed when he released his list of six, would feature in the discussions.
The Prosecutor’s office has always held that the retention of the two, who are in the Case Two Crimes Against Humanity suspects alongside Postmaster General Hussein Ali, is not only an act of defiance, but a calculated move to give them leverage over State machinery and resources.
It can also be argued that the ruling was more of a serious setback for the Uhuru, Muthaura and Ali, whom the Government had put at the front of its defence on the basis they were being victimised for executing their public duties during the post-election violence.
But is also a jolt to the three who are clustered in the first case — former Cabinet ministers William Ruto and Henry Kosgey, as well as Kass FM Head of Operations Mr Joshua Arap Sang — who would naturally have celebrated along with the others had the Judges ruled the cases were inadmissible.
On Monday, the ICC judges lamented as regards Kenya’s submission fresh investigations were ongoing: "The Chamber lacks information about dates when investigations, and whether the suspects were actually questioned or not and if so, the contents of the police or public prosecutions’ reports regarding the questioning."
The seriousness with which ICC takes the claims by the Prosecutor, ahead of the September confirmation hearings against the suspects is discernible from the fact its team in the talks will be led by Mr Phakiso Mochokochoko — who is Head of Jurisdiction, Complementarity and Cooperation. The Lesotho-born lawyer, works directly under Moreno-Ocampo and is accompanied by ICC’s Cooperation Advisor Shamisho Mbizvo.

KACC on the trail of money hidden abroad

By Peter Orengo and Rawlings OtienoKenya Anti-Corruption Commission (KACC) says it is getting more crucial information from agencies and governments on money stashed in foreign accounts.
Soon those who are hiding money outside the country will have no option but to retrieve it back into the country.
"The commission is at the moment getting all the attention it deserves. We have just started moving in the right direction. Soon the thieves will have nowhere to hide," said KACC director Prof PLO Lumumba.
He reiterated that ministers and other public officials operating bank accounts in other countries may have to shut them down to avoid losing their cash.
"The Commission is working with foreign governments to find out public officers who own accounts in banks outside the country.
Under Chapter 6, Article 76 (2) of the new Constitution on leadership and integrity, state officers are not allowed to maintain bank accounts outside Kenya.
This includes member states of the East African Community.
Lumumba who blamed ethnicity, sycophancy and poor leadership in Kenyan politics for rampant corruption promised that more heads would start rolling when the commission unleashes reports on Kenya’s stolen wealth.
He asked the Government to show its obligation in line with Section 12 (3) of the Anti-Corruption and Economic Crimes Act 2003 (ACECA in matters of corruption.
ExtraditionKACC last week said it would fully cooperate with the United Kingdom, which has sought the extradition of Nambale MP Chris Okemo and former Kenya Power and Lighting Managing director Samuel Gichuru.
Okemo and Gichuru are accused of abusing their offices by using proxy companies to squander public funds over 10 years ago, according to documents sent to the Kenya Government by the bailiff and Chief Justice of the Island of Jersey, Channel Islands, UK.
They are accused of receiving bribes amounting to hundreds of millions of shillings from international companies between 1999 and 2002.
Lumumba was speaking when he was invited by civil society to launch the annual Scorecard Report on the Grand Coalition.
He said alliances formed for the sake of winning elections are meant to sideline other Kenyans leading to ethnic hatred.

Disaster looms as rains disappear

By Standard TeamA crisis of unpararalled proportions might unfold this year with 2.4 million Kenyans facing starvation due to a poor weather and other factors, experts have warned.
A study by a non-governmental organisation, the Ministry of Agriculture, World Food Programme and United States aid agency (USAID), says the crisis is pulling sections of the population who were once food secure.
This is because inflation (a measurement of the cost of goods and services has doubled but real wages have remained stagnant, and are being taxed at the same rate as when the economy was on an upswing. This has dragged what was once the lower half of the middle class into the poverty bracket as the value of their pay wanes with increased cost of living.
Meanwhile, the National Cereals and Produce Board stores are quickly running out of maize and the Strategic Grain Reserves are severely below the recommended three months worth of maize stocks. The crisis is attributed to bad disaster management planning by the Government, poor or failed long rains, and skyrocketing food and fuel prices that have increased the cost of basic commodities.
The report has called for urgent measures to deal with the crisis before the situation spins out of control, with the possibility of food riots by desperate, hungry Kenyans now a real possibility.
The Parliamentary Committee on the Cost Living, warned of a looming shortage of maize with a paltry 3.2 million bags in the Strategic Grains Reserves. Speaking in Kisumu, committee Chairman Ababu Namwamba, accompanied by MPs Rachael Shebesh and John Mbadi said the cost of a 2kg packet of of maize flour was now retailing at between Sh130-150 in most parts of the country, while schools have been hard-hit by the rising cost of food.
Shebesh said the food situation was worrying and that the committee will make its emergency recommendation to Parliament on Friday. "We have gone down to the people and we understand the real situation. It is getting worse and we must step in as leaders," she said.
Mbadi said the crisis was a time bomb that if left unchecked would explode on the country’s leadership.
And a plenary session organised by lobby group Kenya Alliance of Resident Associations on Monday in Nairobi, described the fuel-induced inflation as a timebomb that must be tackled without delay.
A group of activists plan a protest today outside the Offices of the President and Prime Minister to protest the high cost of living, and demand for measures to cut food and fuel prices.
"The majority of Kenyans are feeling the pain of inflation, but the Government does not seem to be doing enough. We need quick and concrete action now," said Dinah Awuor, President of Bunge La Mwananchi.
Twin evils
The activists want salaries of workers raised by at least 60 per cent and generous subsidies for farmers to boost food production, a demand the Federation of Kenya Employers has dismissed as unworkable, warning that it would lead to mass layoffs as employers would be faced with huge wage bills.
Prof Joseph Kieyah, an economic analyst with Kenya Institute of Public Policy Research and Analysis said Kenya was facing the "twin evils" of lack of jobs and rising prices of goods and services.
He lamented that lack of healthy competition in many sectors, including the oil industry was responsible for the sharp increase in prices that have hit consumers hardest.
But Prof Kieyah noted that increase in oil prices in the international market was largely responsible for driving up the cost of living, with the Government left helpless.
Kara treasurer, Ephraim Kanake said inflation had doubled in the last three months from 6 to 12 per cent, and was set to rise further in the coming weeks if no action is taken.
Worst hit are pastoral areas and the southeastern and coastal marginal agricultural areas.
The Famine Early Warning Systems Network (FEWSNET) said although rains that fell late last month eased drought conditions and improved availability of water and regeneration of pastures in some areas, these resources would be exhausted within the coming two months.
The country should brace for significant crop failure in the southeastern lowlands, warned the report.
It also points out that high prices for essential commodities, limited household food stocks and declining pastoral terms of trade would lead to food security to emergency levels.
Dubbed the Kenya Food Security Outlook Update, the report says overall rainfall deficits suggest that the respite will only be temporary because the rainy season is about to end.
Preliminary results indicate that pastoralists in parts of Wajir, Moyale, and Marsabit districts are losing livestock at an alarming rate, and their food security is deteriorating sharply. These and decreased productivity and conception rates have taken a cruel trend.
The report says the high levels of acute malnutrition, above emergency thresholds in pastoral areas, requires immediate action. Furthermore, significant crop failure is imminent in the coastal and southeastern marginal agricultural areas because cumulative rains are unlikely to be sufficient for crop production.
New measures‘‘Food and non-food assistance programmes are limited by severe resource constraints, and deterioration in food security is therefore likely to be more rapid than in previous years,’’ says the report.On the other hand, it is reported, food insecurity has increased in urban areas after an unprecedented rise in food and fuel prices.
All eyes will be on Central Bank of Kenya today as it strives to come up with new measures to curb accelerating inflation caused by unrelenting rise in food and oil prices. The Bank’s key policy-making organ Monetary Policy Committee meets today during which it is expected to increase its benchmark interest rate for a second consecutive meeting, as it seeks to curb inflation that has exceeded the Government’s target all year.
An International Monetary Fund Mission that was in Nairobi last week for the first review under the Extended Credit Facility Arrangement advised CBK to consider pushing interest rates up to tame consumer demand, as one way of curbing inflation.
IMF African Department Advisor Domenico Fanizza said high inflation and decreased rainfall could dent the fund’s projected 5.5 per cent growth this year. The basis of the IMF argument is that relatively low lending rates have fuelled high growth of private sector credit, making the economy to overheat as the supply of goods and services is not in tandem with the demand, pushing up inflation.
According to Mr Stephen Bailey-Smith, Head of Africa Research at the Standard Bank of South Africa — which operates as CFC Stanbic Bank in Kenya — upward inflation is likely to persist and the tightening of the CBK’s monetary policy is inevitable.
He said Kenya’s headline inflation could touch a peak of 18 per cent over the next one year, as a result of the rapid rise in the price of food and as energy power places pressure on the cost of living.
According to the recently released Economic Survey 2011, Kenyan workers lost buying power last year despite being awarded pay increments after a two-year freeze caused by the combination of the 2008 post-election violence and global economic recession.
It said though nominal wages were up by an average of 3.5 per cent, prices of goods and services rose at a higher rate of 4.1 per cent, leaving workers with negative real wages.