Households in Kenya should brace for another tough electioneering period, with the cost of living likely to skyrocket even as the government plays down high projections by independent bodies.
Economic experts are blaming this on the high circulation of campaign money in the market, outpacing goods and services in supply.
The Country manager International Budget Partnership Abraham Muriu thinks 2022 will not be different from other election years.
''Huge money supply that is not matched with a growth in goods and services is the major cause of the high cost of living,'' Muriu said.
His sentiment is shared by economic expert Dan Mwenda who is worried that the high saturation of local currency emanating from election campaigns may worsen the stability of the local currency against international currencies, pushing up import costs.
"The shilling is already struggling against a strengthening US dollar. Politicians have started flooding the market with more local currencies. This will push up import costs which are then passed to end consumers,'' Mwenda told the Star on phone.
Alykhan Satchu shares similar sentiments, adding that high saturation of election funds will see demand outpace supply, forcing traders to push up commodity prices.
''We always tend to see outsize election-related spending which is the main trigger. You will recall the ''Jirongo'' in 1992,'' Satchu told the Star.
Kenya has recorded the highest inflation rates in election years. The country recorded the second-highest inflation rate in history during the first multi-party general election in 1992 of 27.3 per cent.
This was attributed to the high circulation of money in the economy driven voter bribery schemes under the Youth for Kanu '92 (YK 92) to help the then incumbent President Daniel Arap Moi retain his seat.
Claims of printing of Sh500 notes abound diluting the general economy. The cost of living touched an all-time high of 54.98 per cent a year later, with families finding it tough to afford a decent meal.
Election campaign spending this year is projected to hit an all time after MPs shot down proposals to put a ceiling on the amount.
A similar incident was witnessed fives years later during the 1997 general election where inflation rose almost four per cent to 11.36 per cent from 8.86 per cent a year earlier.
Although Kenya witnessed one of the lowest inflation rate in 2002 as the Rainbow Coalition ended Moi's 24 -year rule, the cost of living skyrocketed a year later from 1.96 per cent to 9.82 per cent.
Mwenda quips that the 2002 general election was more of principles and ideologies than liquidity.
The disputed 2007 general elections led to murderous post-election violence lasting almost four months to 2008, pushing the cost of living from 9.76 per cent to the third highest in history of 26.24 per cent.
The violence saw 0ver 1,300 people killed while over half a million displaced. Millions faced hunger and starvation due to low agricultural production and disruption of the general supply chain.
Kenya recorded an inflation rate above CBK's benchmark of 7.5 per cent during the 2012 general election, hitting 9.38 per cent. A similar incident was witnessed in 2017 as the inflation rose to 8.01 per cent.
This year, Kenya is staring at a highly contested regime change general election, with presidential aspirants jostling to take over from President Uhuru Kenyatta.
This is likely to spark a money contest, saturating the local market already suffering from currency depreciation. The country's currency has in recent times been hitting a daily new low against the US dollar.
Last week, the Central Bank of Kenya said inflation is expected to remain within the target range in the near term, with muted demand pressures and the impact of Government measures to lower electricity tariffs and stabilise fuel prices.
On Monday, the Kenya National Bureau of Statistics reported a decline in the cost of living last month at 5.39 per cent, down from 5.73 per cent in December, and 5.8 per cent in November.
There was, however an increase in prices of commodities under food and non-alcoholic beverages (8.89 per cent), transport (6.84 per cent) and housing, water, electricity, gas and other fuels (5.11 per cent) year on year.
This pushed up the Consumer Price Index (CPI) by 0.31 per cent from an index of 118.274 in December 2021 to 118.642 in January 2022.
Even so, the government's inflation projection for the year is way lower than those by the private sector and other independent international firms.
The latest market perception index by CBK shows the private sector expects the country's inflation to rise up to 6.5 per cent on a host of uncertainties both locally and internationally.
Chief executives of banks and non-bank institutions outlined the upcoming general election, rising global oil prices, currency volatility and expected poor rainfall pattern as impediments to a softer cost of living this year.
Yesterday, the shilling traded 113.55 units against the greenback even as the International Monetary Fund (IMF) fears that a steep rise in fuel and gas prices will push inflation to levels last witnessed during the global recession in 2008.
