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High fuel and food prices are limiting household purchasing power

  • Key Message Update
  • Kenya
  • May 2023
High fuel and food prices are limiting household purchasing power

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  • Key Messages
  • Key Messages
    • The 2023 March to May long rains are likely to be the third or second wettest season recorded in the past 40 years across much of northern and northeastern Kenya, particularly in Marsabit, Isiolo, and Wajir. Cumulatively, rainfall over much of northern and eastern Kenya is over 125 percent of the 1981-2020 average, with cumulatively average rainfall in the central and western parts of the country. However, there are localized areas in southwestern Kenya that have recorded 75 to 90 percent precipitation compared to the 40-year average. In the northern and northeastern pastoral livelihood zones and marginal agricultural areas the long rains season is likely to conclude on time.

    • In the pastoral areas the long rains have driven significant improvements in forage and water resources, resulting in households and livestock traveling shorter distances to access water, and livestock migration back to the wet season grazing areas. Relatedly, livestock body conditions are improving and range from fair to good except in Samburu and Wajir where livestock body conditions range from fair to poor. Milk production and consumption are slowly increasing, but household access to food and income remains well below average. The goat-to-maize terms-of-trade, a proxy for household purchasing power, increased slightly in April, supported by rising goat prices. However, high maize prices are keeping the goat-to-maize terms-of-trade 18 to 52 percent below the five-year average. The distribution of humanitarian assistance is ongoing, supporting widespread Crisis! (IPC Phase 3!) outcomes as household slowly begin recovering from the historic drought.

    • In the marginal agricultural areas, crops are still in the developmental stages and households continue to rely heavily on off-own farm income activities such as selling charcoal and firewood and petty trade to narrow income deficits. The upcoming long rains harvest in July is expected to be below average across most of the southeastern marginal agricultural areas due to limited access to seeds and fertilizer at the start of the season and increased consumption of the green harvest by households. In the Coastal Marginal Agricultural areas, a delayed start and erratic rainfall is likely to result in a moderately to significantly below average harvest. Due to limited household food availability, high staple food prices, and constrained household purchasing power, Stressed (IPC Phase 2) outcomes continue to persist, with the worst affected areas in Crisis (IPC Phase 3).

    • Staple food prices remain historically high in most markets due to low local food availability following successive below average harvests, increased demand, and high fuel prices. In April, maize prices in most monitored markets were 5 to over 80 percent higher than prices last year, and 23 to 142 percent above the five-year average in most monitored markets. Similarly, the dry bean prices were 30 to 102 percent above the five-year average in monitored markets. Overall, the high food prices are continuing to limit household purchasing power.

    • The annual inflation rate in Kenya dropped to a ten-month low of 7.9 percent in April 2023, supported by a softer rise in prices of food and non-alcoholic beverages and the decline in the cost of some items such as onions and spinach. However, electricity costs are continuing to increase, with the price of 200 and 50 kilowatts around 45 and 64 percent higher than last year. Relatedly, petrol and diesel prices remain around 24 and 29 percent higher than last year, albeit prices remaining stable from March to April. Overall, the high cost of fuel, electricity, and food is continuing to keep the cost of living high, particularly impacting poor households in urban and peri-urban areas.

    Recommended citation: FEWS NET. KENYA Key Message Update May 2023: High fuel and food prices are limiting household purchasing power, 2023.

    This Key Message Update provides a high-level analysis of current acute food insecurity conditions and any changes to FEWS NET's latest projection of acute food insecurity outcomes in the specified geography. Learn more here.

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