Business highlights – High food prices push up cost of living as inflation hits 9 per cent mark in February

High food prices push up cost of living as inflation hits 9% mark in February

  • Kenya’s inflation rate increased to 9.04 per cent in February from 6.99 per cent in January as acute drought drove up food prices
  • The price of staple foods including maize flour, milk and potatoes has been rising as the country grapples with persistent drought
  • Experts say unfavourable weather conditions pose a bigger threat to Kenya’s economic growth this year than possible effects August’s highly contested general election

The latest report from the Kenya National Bureau of Statistics (KNBS) shows that the food and non-alcoholic drinks index gained 3.28% on the month and 16.5% on the year, as the price of staple foods including maize flour, milk and potatoes rose as well.

This was mainly attributed to increases in prices of sukuma wiki, maize flour, milk, cabbages, spinach, potatoes and maize grain, among others. This was partly contributed by prevailing drought conditions. The year on year food inflation stood at 16.50 per cent in February 2017, the Bureau said in a statement.

READ ALSO: You were wrong, analysts tell CBK as high power, food prices push up inflation and weigh down consumers

The food and non-alcoholic drinks segment accounts for 36 per cent of Kenya’s inflation basket.

Between January and February 2017, Housing, Water, Electricity, Gas and Other Fuels’ Index, increased by 0.4%. This was mainly due to increases in cost of electricity, kerosene and house rents which outweighed price decreases in the cost of cooking gas. The Transport Index increased by 0.74 per cent in February compared to January 2017, mainly on account of increases in the pump prices of petrol and diesel.

Kenya is experiencing an acute drought with an estimated 2.7 million people in need of food aid.

The government last week said it will use Sh215 million to pay 120,000 pastoralists to help them buy animal feed to shield them from the effects of drought. Economists polled from leading global banks, consultancies say interest rate controls could potentially pose a risk to financial stability. Experts say the effect of the August polls will be less damaging to the economy than 2008’s post-election violence, which scared off new investors.

Devki Group tycoon buys Baringo Senator Gideon Moi out of Ksh8 billion Menengai power plant firm

  • Steel and cement mogul Narendra Raval has bought Baringo Senator Gideon Moi’s stake in energy company, Sosian Menengai Geothermal Power
  • The firm won a lucrative deal to build a 35-megawatt geothermal power plant in Menengai
  • Mr Moi previously owned a stake in the geothermal venture through an entity dubbed Sosian Energy Ltd, but has since relinquished his stake

The billionaire’s Devki Group now fully owns Sosian Menengai Geothermal Power, one of the three firms that State-owned Geothermal Development Company (GDC) awarded exclusive rights to set up a steam plant under a build–own–operate model.

Devki Group CEO Narendra Raval

Mr Raval has interests in steel making, cement manufacturing, roofing materials and aviation.

READ ALSO: Cement manufacturers to diversify product range as competition intensifies

His stable includes Devki Steel Mills, roofing sheets maker Maisha Mabati Mills, National Cement, which makes ‘Simba Cement’, and Northwood Agencies Ltd, a helicopter charter company.

Boeing opens office in Nairobi, says Africa will need more than 1,000 new planes by 2027

  • The world’s largest aerospace manufacturer has opened two new offices in Johannesburg and Nairobi
  • Boeing plans to take care of its Africa business as it continues to expand its international presence
  • Aircraft maker says Africa would be in need of 1,150 new airplanes over the next 20 years

Santos explained that the aerospace industry needs to start paying closer attention to Africa because the continent is on the move economically. Santos said in a statement that Africa is not new territory for Boeing. Since the introduction of the jet airplane, Boeing aircraft have formed the backbone of the continent’s commercial fleet and Boeing continues to be one of the largest US-based companies doing business on the continent, he explained.

The most recent Current Market Outlook report predicted that air traffic to and from the continent is expected to grow by about 6.1 percent annually.

READ ALSO: Kenya Airways passenger numbers jump 4.8% to reach 1.12 million as flier continues with turnaround strategy

The Johannesburg office will be headed by Miguel Santos, Managing Director for Sub-Saharan Africa, and Director for International Sales, Africa.

Chamsou Andjorin, the Director for Government Affairs and market development, will be based in the Nairobi office.

 

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