Kenya pass bill to control prices

  1. Posted on Thursday 24 June 2010 - 15:23
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    Alex Kiarie, AfricaNews reporter in Nairobi, Kenya
    The Kenyan parliament passed a law seeking to reintroduce price controls on selected goods, two decades after the free market policy was embraced in the East African largest economy. The law was premised what some of the legislators termed as the continued exploitation of Kenyans by a cartel of business buccaneers.
    kenya map
    However, this law is subject on the presidential accent for it to take effect.

    The Price Control (Essential Goods) Bill 2009, was unanimously passed despite Kenyan Trade Minister Amos Kimunya's warning against it. If President Mwai Kibaki assents to the Bill, it would give the Government the power to fix retail and wholesale prices of maize flour, wheat flour, cooking fat, and fuel.
    It would mean restoration of Budget’s lost sheen where Kenyans would tune in to know what prices have gone up and down as it was prior to the introduction of free market, where the prices of all products are determined by the demand and supply grid, together with the costs of transport and production.

    Some of the goods identified to subject to price controls include sugar, kerosene, petrol, and maize and wheat flour among others. This comes as the country's both rural and urban poor grapple with skyrocketing prices of the basic goods amid nose-diving economic capabilities of a large section of the Kenyan populace.
    The parliament's decision could be possible, though economic experts, through a rejoinder in the local press, advise against dangers of non-competitive market where demand does not determine costs, that is if the government will indeed implement the price controls.

    Vimal Shah, the CEO of one of East Africa's leading cooking oil manufacturers, BIDCO east Africa, said that if the government insists on controlling the basic goods, then it must make sure that the cost of production is kept at a minimal level. He singled out the electricity rates, which he said are some of the highest in the world.

    He also said that the price of crude oil in the international market as witnessed last year, does have an impact on the prices of essential goods on the common man in Kenya. There are also some people who have described the legislators move as populist.

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