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Daily Nation : February 3rd 2014
28 | BUSINESS STATISTICS | How the month of January turned out High food prices and school fees push up cost of living Inflation climbs to 7.21 per cent, putting a damper on hopes of interest rates fall BY JOSHUA MASINDE @masindej firstname.lastname@example.org higher, pushing the inflation rate to 7.21 per cent. This further dampened expecta- P tions that interest rates may fall any time soon. In December, inflation stood at 7.15 per cent. According to the Kenya National Bureau of Statistics, (KNBS) prices increased across the entire board in January compared to the previous month, with the education index registering the highest rise of 3.7 per cent. Analysts said the situation could worsen with the current famine in the northern part of the country where about 1.7 million people are in need of emergency food aid. “I expect inflation to hold above 7 per cent in the first quarter of 2014, but the situation may worsen due to drought in northern Kenya,” said Mika Davis, analyst at Contrarian Investing said on the phone. 3.67 The rate of inflation in January last year During the period, recreations and culture index rose by 2.93 per cent while the cost of transport and health rose by 1.95 per cent and 1.38 per cent respectively, pushing up the overall inflation rate in January. The food and non-alcoholic beverages index rose by 1 per cent, with ayment of school fees and the high prices of food made the cost of living in January THE WAY FORWARD What future holds for the consumers Lending: Borrowers’ hope of friendly rates receive a jolt with the rising figures Food: The drought and hunger in parts of the country, especially in Turkana, to make matters worse Action: The Central Bank of Kenya Monetary Policy team says it will strive to keep prices stable Overall: Cost of living has been on an upward trend since last year. KNBS saying: “Increases in some food prices outweighed falls, resulting in an aggregate rise in the index”. In year-on-year basis, food prices rose by 10.14 per cent, with the cost of recreation and culture rising by 12.12 per cent. Rising consistently In January 2013, inflation stood at 3.67 per cent but has been rising consistently reaching a high of 8.29 per cent in the year. This year, the government has set the target at between 5 per cent and 7 per cent in the medium. At its rate setting meeting on Janu- ary 14, the Central Bank noted that its monetary policy stance had anchored inflationary expectations and continues to deliver the desired objective of price stability. This prompted the retention of the Central Bank rate at 8.5 per cent. The CBK said it will continue to “monitor the key macroeconomic aggregates and any emergent risks that may impact on price stability”. FILE | NATION The cost of living was last month pushed higher courtesy of increased school fees and food, according to the Kenya National Bureau of Statistics. DAILY NATION Monday February 3, 2014 LENOVO EYES GLOBAL MARKET WITH MAJOR DEALS Buying of Motorola sets PC maker on world path. P.31 Fight for market lowers cost of milk BY NATION REPORTER Milk consumers have emerged as the biggest winners following an ongoing price war among processors in an attempt to guard their market turf. Producer prices, however, re- main unchanged at between Sh35 and Sh40 for every litre delivered to the factories. A spot check by the Nation across major supermarkets within Nairobi city centre shows that brands such as Fresha and Molo Milk each cost Sh41, a Sh2 drop per 500ml packet. The brands are processed by Githunguri Dairy and Buzeki Dairy which was recently acquired by Brookside Dairies. We have dropped our prices to maintain market share,” Matu Wamae, KCC chairman The state-owned New KCC has responded by cutting its prices for its fresh whole milk brand by Sh2. A packet of similar quantity now costs Sh43 down from Sh45 last week. However, KCC’s Gold Crown brand still retails at Sh45, same as Brookside’s Ilara, Tuzo while the Limuru Milk brand is going at Sh43. New KCC chairman Matu Wamae attributed the reductions to recent good rains in milk producing areas and availability of cheaper maize stocks for cows. Brookside Dairy, which com- mands the largest market share, said it was adopting a wait-andsee attitude before effecting any price changes. “We are enjoying it (price reduction). They may have dropped prices but we are monitoring on a daily basis,” said Mr John Gethi the firm’s manager in charge of milk procurement. Kenya Ports Authority expands to Burundi BY NATION CORRESPONDENT The Kenya Ports Authority has increased its presence in the region by opening a new office in Bujumbura, which will be a key operational centre in the area’s hinterland. New Kenya Ports Authority chairman, Mr Danson Mungatana, (left) promised when he took over on January 14 that the port would expand its services in the region to make Mombasa the entry point of choice not only in Africa but globally. During opening of the office, where he was accompanied by Kenya’s Cabinet Secretary for Transport and Infrastructure, Eng Michael Kamau, Mr Mungatana said KPA has embarked on a mission to improve customer satisfaction through quality service delivery along the Northern corridor. He said the initiative was intended to enhance the quality of services offered to port users from Uganda, Tanzania, Eastern DRC, Burundi, North-Eastern Tanzania, Ethiopia and other landlocked countries using the facility. He said following opening of the regional office in Bujumbura, the business community can now utilise it to clear their cargo as well as transact any other businesses without having to travel to Mombasa. “I urge you to continue using the port of Mombasa as we focus on transformation,” said Mr Mungatana.
February 2nd 2014
February 4th 2014