Kenya politics: Quick View - Food price rises compound political pressures

Content Type
Country Data and Maps
Institution
Economist Intelligence Unit
Abstract
No abstract is available.
Topic
Politics, News Analysis
Political Geography
Kenya

Event

Fearing food price rises will influence the August 2017 presidential election, the government has announced that it will subsidise the price of maize and other basic foodstuffs by Ksh6bn (US$58m).

Analysis

Because of a drought in the Horn of Africa that has triggered agricultural shortages threatening millions of people across the region, the cost of maize flour, a staple product in the Kenyan economy, has risen by 50% this year. In Kenya, preliminary weather station assessments for the main rainy season from March to May point to most areas receiving less than 75% of their long-term average rainfall, and stocks of imported maize are running low. The resultant food supply pressures mean that food inflation rose to 21% year on year in April, its fastest rate since 2012, squeezing the pockets of poorer families where the average wage is less than US$2 a day. This grim reading corresponds with other markers on the economy's health, namely an uptick in financial sector redundancies and profit warnings by listed firms. The government has trimmed its real GDP growth forecast for this year to 5.5% from 5.8% in 2016.

The government fears rising inflation may hurt its prospects in the upcoming presidential election on August 8th, when the incumbent president, Uhuru Kenyatta, will face the third-time contender and former prime minister, Raila Odinga. Although elections have historically been decided along ethnic lines, potentially allowing Mr Kenyatta to win by maintaining the allegiance of the Kikuyu, Kalenjin and Kamba groups (known as the KKK alliance), his government is concerned that swing voters-particularly minority ethnic groups-could vote on economic grounds. This could sway the elections in favour of Mr Odinga, whose support from the Luo ethnic group won him 43.7% of the vote in 2013, less than 7 percentage points behind Mr Kenyatta. Mr Odinga's election narrative has recently shifted away from targeting corruption towards the food shortage situation.

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