Home Business Kenyans purchasing power hurt by high cost of living – report

Kenyans purchasing power hurt by high cost of living – report

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The high cost of living is taking a toll on Kenyans with many people finding it difficult to put a meal on the table.

Data from the Kenya Institute of Public Policy Research Analysis (KIPPRA) shows that despite an increase in the minimum wage of 12pc, the overall costs of essential goods and services jumped 22pc, clawing back the gains made in the minimum wage in 2022.

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KIPPRA statsistcs show the economy dipped in 2022 to 4.8pc from 7.6pc in 2021.

In 2022, the inflation rate increased beyond the policy band of 7.5pc to hit 7.7pc on account of higher food prices, and higher fuel prices.

However over the same period of time the economy created 816,000 new jobs mostly in the informal sector.

The industry accounted for 73.2pc of the jobs created in the country. The education sector had the highest number of employees in the formal sector, accounting for 21pc of all the jobs created.

Despite the creation of new jobs, the latest report by KIPPRA indicates that the minimum wage failed to match the high cost of living that ticked up by 22pc driven by high food and energy costs.

Treasury Cabinet Secretary Prof. Njuguna Ndung’u says the government is supporting food production, and manufacturing by strengthening technology upgrade, and capacity development to lower overall costs of manufactured food products which account for 24.8pc of consumer expenditure.

KIPPRA recommends strengthening the minimum wage policy in the informal sector as well as alignment of the minimum wage with the current cost of living

Regina Manyara
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