Inflation Escalating Poverty in Kenya

The burden of inflation in Kenya falls heavily upon the poor who are largely defenseless against price increases on the necessities of life. The biggest cause of poverty in developing economies has been unemployment. But the real problem with inflation is that it creates an economic situation where unemployment tends to rise.

Food prices, fuel and transport cost have been on the rise in Kenya since last year. The rate of inflation in Kenya has left many Kenyans in despair because they can’t simply afford a single meal a day like they used to sometime back. When inflation occurs on fuel prices, all products will experience inflation because it takes fuel to transport nearly all goods.

Inflation in the country has occurred on most goods prices throughout the economy but the wages are still the same, extra financial stress is placed on people to buy the same products they were able to buy before. This is seen in the rise of fuel, and foodstuff which people were able to buy at ease and now they struggle to acquire the same goods.

This mostly affects the poor who struggle to put a meal on the table and those in middle class level of wealth but often the wealthy have investment options to protect themselves from some of the effects of inflation. When the inflammatory pressures appear, the astute investor shifts out of those investments likely to suffer and go to those that will keep up with the pace of inflation, thus protecting themselves from some of the damage inflation might otherwise inflict on their portfolio.

Pay increases normally lag behind and often do not catch up to price increases, the poor normally spend 100% of their income on those things most affected by inflation, tend to be hurt more by inflation to a larger degree than large debtors, or investors who can shift assets to gold or other commodities that typically keep pace with inflation.

Inflation has greatly affected people who live in North Eastern and the rural parts of the country where urbanization, civilization and development is minimal, and unemployment is rampant; famine and despair are all that can be seen in this kinds of situations. Farming in such parts has low yields which aren’t enough to sustain the family. And with inflation on the rise the state of poverty increases hence increasing poverty rate in Kenya at the same time.

This is how inflation in the country has taken toll on people who are already struggling to live pay-check to pay-check, and may plunge these people who have been doing fine before into poverty, since they cannot afford to buy the goods they once were able to.

Inflation is a problem that the government should look into by increasing supply of products in the country to avoid price increases of basic good and products. If not put into consideration, the country may sink even lower into poverty with drought adding to the claws of inflation.

Related: Food Prices, Most Important Component of Africa And Inflation Indices

Written by Amina Martha.