If a new law comes into force, the government will soon have the right to set the prices of essential goods itself. This is intended to stabilize prices and protect Kenyans from exploitation.
The Price Control (Essential Goods) (Amendment) Bill 2024, sponsored by nominated Senator Tabitha Mutinda, if passed, would give the government the power to set retail and wholesale prices for essential commodities.
According to the bill, the essential goods defined in the bill include maize, maize flour, wheat flour, rice, edible fat or oil, sugar and prescription drugs.
“The Cabinet Secretary (Finance) shall, by order in the Official Gazette, fix the minimum and maximum retail and wholesale prices for essential goods,” the draft law states.
The bill, which has been submitted to the Senate for first reading, proposes to amend the Price Control (Essential Goods) Act of 2011. It aims to regulate the prices of basic goods to ensure their availability at reasonable prices for all Kenyans, especially low-income earners.
Apart from the goods listed, the Bill provides that the Cabinet Secretary may, from time to time, by order in the Official Gazette, declare any goods as essential goods.
The proposed legislation also aims to prevent sudden price fluctuations in essential goods, which could lead to a reduction in purchasing power and a deterioration in the general prosperity of consumers.
The bill also aims to prevent market players such as monopolies and oligopolies from exploiting their dominant market position to artificially increase prices and take advantage of consumers’ lack of alternative options.
“The aim of this law is to ensure access to essential goods in times of crisis such as natural disasters or health emergencies,” it says.
The National Treasury CS may also, in consultation with industry, set minimum and maximum prices for goods and determine the persons to whom the minimum and maximum prices for goods apply.
Paralyze the economy
Economists, however, criticize the bill on the grounds that if passed, it would paralyze the economy and put an end to the free market economy.
“Price controls! Back to the KANU era of 1992. If this bill is passed, it will mean an end to economic liberalisation and the free market economy,” said former Mandera Senator Billow Kerrow.
In setting the minimum and maximum prices for essential goods under this law, the draft law states that the CS should take into account the least possible restrictions on competition, normal market conditions and serious market disturbances that justifiably lead to price fluctuations.
“It will also massively fuel the associated greed and corruption in the centers of power. And more importantly, it will destroy investment and our competitiveness in the region. Completely out of place,” Kerrow added.
The CS will also take into account the importance of the respective basic goods for economic development and consumer purchasing power.
Mutinda argued that the bill, if passed, would prevent essential goods and services from becoming unaffordable for the population.
In addition, prices for essential goods are to be stabilized to ensure that the cost of living remains manageable for the population.
“The passage of this law will also ensure that Kenyans are protected from exploitative and unscrupulous businessmen,” the bill states.
Currently, the government, through the Energy and Petroleum Regulatory Authority (Epra), sets prices for fuel products every month based on global market forces and trends.
