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Cost of living lower in Nairobi than other counties

The cost of living measure outside Nairobi has remained above the government’s preferred ceiling of 7.5 per cent and above that of the city.

Data from the Kenya National Bureau of Statistics (KNBS) show that at 7.79 per cent, inflation for households living in the 46 counties dropped at a slower pace than for city dwellers, whose cost of living measure stood at 4.46 per cent last month.

Even though life in Nairobi is considered more expensive, the data show that the drop in the cost of goods has been slower outside the city.

At 7.79, inflation outside Nairobi has dropped by 1.93 percentage points since August compared to the city’s, which has shaved 2.86 points over the same period.

“Food prices outside Nairobi have dropped marginally over the period,” Simon Gaitho, a senior statistician at the KNBS said in a phone interview.

DROP IN PRICES

He said  Kenya’s capital enjoys a steady supply of commodities from across the country including food, which ensures relatively big drops in prices when supplies are high and mild increases in seasons of scarcity.

The statistician cited Machakos and counties in Northern Kenya as most exposed to food inflation.

Petrol prices in counties west of Nairobi are also high because they are farthest from the port of Mombasa.

This means that the transport component in the fuel sold in western Kenya and Rift Valley is higher than in the city under the prices set monthly by the government.

The government started a monthly review of retail fuel prices in 2010 after they shot up, driving up the cost of living.

Diesel is retailing at Sh94.52 in Nairobi, Sh96.61 in Kisumu and Sh102.77 in Wajir. Kerosene prices are at Sh76.31 in Nairobi and Sh79.41 in Busia and Sh80.88 in Garissa.

Fuel prices, like food costs, have a big effect on inflation in Kenya, which relies heavily on diesel for transport, power generation and agriculture, while kerosene is used in many households for cooking and lighting.

RICH FAMILIES

But Nairobi’s rich families have had the biggest relief from the easing inflation over the past three months, helped by falling electricity and motoring expenses.

The KNBS data indicates that average inflation for wealthy city homes stood at 4.33 per cent last month compared with 4.79 per cent for the lower income group and 3.38 per cent for the middle class.

The city’s average inflation stood at 4.46 per cent last month.

KNBS attributed the differences in the inflation levels among income segments to dissimilar consumption patterns, adding that the rich spend most of their income on utilities and transport while the poor use nearly half their income on food.

The data show that Nairobi’s middle class spends on average 22 per cent of their income on food, the wealthy use seven per cent while poor households spend 42.5 per cent.

But Nairobi’s wealthy on average spend the largest portion of their income on transport at 27.9 per cent, explaining their exposure to rising motoring expenses.

Those in the counties spend 35.9 per cent on food, housing and utilities (17.4 per cent) and 8.4 per cent on transport.