Urban inflation index

back to normal

Compared to a year ago

This shows that not much changed for those in Nairobi able to travel around and shop properly at Uchumi that life is pretty normal as far as shopping is concerned.

Litre of petrol: 87.99 shillings (~$5.50 a gallon) and up 18% from a year ago (then 74.29) when you drive around Nairobi you can get prices from about 85 to 92 this week For petrol prices, I have been tracking a brand name station that tends to have slightly lower prices than may parts of the city where the price is at around 91 shillings. And these are expected to go up this year as are electricity bills which are already being billed at 12% higher for residential house. Energy Minister Kiraitu Murungi sounded out another warning yesterday to petrol companies to adjust the prices downwards when international oil prices drop – but the companies have, over the years ignored previous warnings from Ministers and government officials, and not passed on any savings to motorists.

Maize meal ugali (2 kg. unga) 52 shillings (50 a year ago)

Sugar (2 kg. Mumias pack) 150 shillings (no change from a year ago)
Fresh food prices have gone up also. Milk and bread have increased by a few shillings depending on where you shop. The prices of vegetables have gone up, some even up to 4X what they were before the election, but vegetable prices are seasonal and once supplies and fresh harvest kick in, the prices should adjust downwards.

Tusker beer: 120 shillings at local pub – up 20% (from 100 a year ago)
some pubs experienced shortages in the post-election period until the only beer they were left with was Guinness

(Safaricom) Mobile phone promotion: a year ago Safaricom had introduced Saasa – with 8 shillings per minute calls during off peak hours. This year they have extended the hours that off-peak applies, while rival Celtel has lowered the bar with 4 shilling per minute calls to 3 preferred numbers
What i really want from mobile company is for one tariff to focus on cheap data charges – SMS, Internet browsing – while voice can remain expensive

US Dollar exchange rate: 70.7 shilling to the dollar – unchanged (was 69.97 a year ago). But this is abnormal as it does not capture the the strength of the Kenya shilling which had appreciated to about 63 just before the election – from December it has lost 10% against the dollar and 17% against the Euro (overall it is 15% weaker against the Euro a year ago.

10 thoughts on “Urban inflation index

  1. Anonymous

    I have been out of Kenya for 2 years. I am amazed that since then prices have more than doubled in Nairobi. I am sure these prices are not obtainable. The picture is probably worse than this.

    If prices have more than doubled but the economy has grown at a rate of only 6% a year, that translates to higher poverty levels as more working class people fall to poverty class.

    On exchange rate, it is not correct to just look at the rate a year ago for shs/dollar. We all know that the dollar has depreciated against all other currencies with the exception of the shilling. For the shilling to depreciate against the dollar, there must be an underlying problem. I dont think the appreciation of the shilling before year end had anything to do with sound economics on the part of Kenya but is mostly explained by the fall of the dollar globally.

    I would love to obtain the reasons why the prices doubled since 2006.

  2. Anonymous

    In the first paragraph above, I meant to write ” I am sure these prices are not obtainable outside Nairobi”

  3. Acolyte

    I have to echo what anon was saying. I was talking to someone in nai and the price of things like rent is horrendous to say the least. How Nairobians afford not to be homeless is way beyond me. The rents I left being charged in Runda are now the rents being charged in Lavington ie 75k per month.
    Bus fare has doubled from what I left it.
    What I wonder is other than tightening their belts how are Kenyans going to survive because I see a lean year coming up.

  4. Ssembonge

    Kenya is one of the most expensive places in the world to live in. People survive by grace. That is why people don’t repay debts.

    We bought a shack in one of the leafy surbabs a couple of years ago for slightly less than 4m and it could fetch at least 12.5 m if we bailed out. The best part is that the muzungu who rents it pays 3 months in advance.

    The thought of coming back freaks me cause I’d have to live in Karen just to maintain a similar lifestyle (house size, chirping birds, security, horse stables in the neighbourhood, etc). Yet I pay a fraction of what it costs Karen residents.

  5. tumwijuke

    “Pretty normal;” now those are words I haven’t heard in use in relation to Kenya in a while. It’s good news, I guess.

    I’m look at the prices of essentials like petrol, maize meal and sugar in horror because I know in Uganda the ripple effect will be even harsher.

  6. Me

    Good point ananymous (first comment). The dollar’s decline accounts for a lot of currencies gaining against it. What is more telling is the trend for KSh/GBP or KSh/Eur.

    Another point, “back to normal” is a deceptive phrase. Kenya’s risk premium has just gone up in the eyes of many (both internally and internationally). With increased risk comes increased expected reward which usually translates to higher prices. Anyone expecting thing to return to “normal” will have a long time to wait…

  7. Concept

    Prices of basic commodities i.e tomatoes,onions,sukuma etc has shot up….
    and by a considerable margin.

    My worry is what will happen when these households can no longer afford a basic meal.

    We are likely to see an upsurge in violent crime.