The Treasury will not invoke a 2011 law that allows the State to control the prices of basic goods in reaction to the surge in inflation even as inflation punched above the government’s upper target into the red territory.
The Treasury maintains that the State will not cap the price of basic items in line with the Price Control (Essential Goods) Act, 2011 as a weapon to control the cost of living measure.
The Act, which was enacted during the tenure of the late President Mwai Kibaki, allows the Finance minister to set maximum prices of gazetted essential commodities upon consultation with the relevant industry.
But with the rising cost of basic commodities, the government must move swiftly to use other tools available, including tax waivers and subsidies, to protect the consumer.
The latest data from the Kenya National Bureau of Statistics show that inflation — a measure of annual changes in the cost of living — hit 7.9 percent in June from 7.1 percent in May, the highest point in the last 58 months.
This is the first time year-on-year inflation crossed the upper limit of 7.5 percent since August 2017 when it climbed to 8.04 percent on a biting drought at the time.
Kenya is a free market economy and price controls should only be considered as a last resort when all other interventions have failed.
