EASTERN AFRICA: Consumers, traders feel the burn as prices skyrocket
A man rushes a baby away from teargas in Kasangati, a suburb of Kampala, Uganda during “Walk to Work” protests over the high cost of living
NAIROBI, 21 April 2011 (IRIN) – Low- and middle-income earners across eastern and central Africa are reeling from the mounting cost of living brought on by a sharp increase in commodity prices in the past few months.
Protests and demonstrations against the rising cost of food and fuel have swept across several towns in Kenya and Uganda; violent clashes between demonstrators and security forces have been reported on several occasions in Uganda. At least four Ugandans have been killed in countrywide demonstrations, while hundreds have been arrested and several hospitalized with gunshot wounds and the effects of teargas.
On 21 April, IRIN interviewed a cross-section of citizens in six countries in the Horn of Africa, East Africa and Great Lakes regions about the impact of the price increases on their lives.
Robinnah Nakuya, a charcoal vendor in a Kampala market, said: “A bag of charcoal, which I used to buy at 15,000 shillings [about US$6], is now 30,000 shillings [$12]. I am a single mother of three children and I must feed them. Let the government reduce prices so that we can afford them. We cannot afford salt and soap because prices have gone up.”
According to a recent World Bank report, the wholesale price of maize in Uganda has risen by 114 percent over the past year.
On 21 April, former Ugandan presidential candidate Kizza Besigye was arrested for a “walk to work” protest against high prices, having been shot in the hand on 14 April after a standoff with police and the army, surrounded by hundreds of protesters.
The Ugandan government has banned the demonstrations, with President Yoweri Museveni saying drought and external oil prices were beyond government control and that rising food prices were good for farmers as they could earn more.
In Kenya, despite an announcement by Finance Minister Uhuru Kenyatta on 18 April that the government had reduced taxes on diesel and kerosene, hundreds of demonstrators took to the streets of several major towns on 19 April.
Earnest Mogire, a trader at Wakulima wholesale market in Nakuru, a large town in the Rift Valley province, told IRIN his customers were reluctant to buy the cabbages he had just offloaded because of the new high prices.
“Transporting the produce from farms has become too expensive, forcing me to adjust my selling prices,” Mogire said. “In January, it used to cost me between KSh12,000 [$150] and KSh13,000 [$163] to transport the produce from Nyeri [in central Kenya], my main source. But the price has since risen to between KSh17,000 [$213) and KSh18,000 [$225], forcing me to pass on the burden to my customers.”
Mary Karanja, a resident of Kaptembwa slums near Nakuru town, told IRIN she no longer used public transport to commute from the slum to Nakuru town where she works as an office cleaner.
“In November 2010, the fare to the office was KSh20 [$0.16] but it has since escalated to KSh30 [$0.38] which I find too expensive,” Karanja said. “I earn 4,000 shillings [$50] per month and KSh1,560 [$19.50] would be too much for transport yet I still have to pay rent and feed my two children.”
In the coastal town of Mombasa, retailers have raised the prices of many commodities, especially foodstuffs such as maize flour, cooking oil and vegetables.
Goods in many shops and markets have gone up by at least KSh10 [$0.10] in the past week. A 2kg packet of maize flour, for instance, sold for KSh80 [$0.96] last week but is now KSh90 [$1.08].
Transport firms in most parts of Coast Province have also doubled their prices, with owners blaming the government for the high costs of fuel.
“Fuel is a big expenditure in the transport sector and as such, any increase in the price, even if it goes up by a shilling, really affects us,” Ahmed Bwanamaka, who operates a three-wheeler taxi, known as a tuk-tuk, said. “The current situation has slashed our revenue by half; we now spend more on fuel than before.”
The executive director of the Federation of Kenya Employers, Jacqueline Mugo, said: “Skyrocketing fuel and food prices have made Kenyans suffer; urgent measures need to be taken to avoid social unrest.
“We plead with the government to take action to be able to stop the escalating prices. The uprising in the Middle East should not be used as a tool to increase the pump prices.”
In Somalia, consumers say the price of food is rising by the day.
Abdiwahiid, a retail trader at Bakara market in the Somali capital, Mogadishu, told IRIN food prices had drastically risen in the past two weeks and were still going up.
“Two weeks ago, I was selling 1kg of sugar at 27,000 Somali shillings [$0.90]; today I am selling it for 32,000 [$1.06].”
He said 1kg of rice was selling for 17,000 shillings [$0.56] two weeks ago but was now 24,000 [$0.80], while a litre of cooking oil had risen from 36,000 shillings [$1.20] to 50,000 shillings [$1.66].
“Everything seems to be going up,” Abdiwahiid said. “I have fewer customers than I used to and they are buying less because they cannot afford it.”
Abdillahi Omar, a taxi driver in Hargeisa, capital of the self-declared Republic of Somaliland in Somalia’s northwest, said fuel prices were way out of reach for many people.
“I used to buy 20 litres of fuel for $15 a week ago, today I paid $18.50,” Omar said, adding that the price went up three days ago.
However, taxis in the city had not increased their rates. “We are waiting for the co-operative to discuss and give us guidance.”
Photo: Zahra Moloo/IRIN
|A man carries a spoon during protests in Nairobi against rising food and fuel prices
In Ethiopia, memories of 2008, when the country’s cost of living was second only to then hyper-inflated Zimbabwe, are returning to many residents of the capital, Addis Ababa.
Headlines of local newspapers at the weekend all had a common theme: rising inflation.
“The things we pay for daily, like sugar, [cooking] oil and transportation costs have increased dramatically in the last two, three months; I don’t know how we will be able to survive if it keeps this way,” Etifwork Nigatu, a city resident, who makes 570 Ethiopian birr a month [$34], said.
Etifwork, a mother of one, told IRIN she and her husband, who makes 2,000 birr [$120] a month, spend half their income on food while 600 birr [$36] goes to house rent. The money they spend on food has increased, leaving them short of money for other expenses, such as water and energy for cooking.
“The prices of other commodities have skyrocketed; for example, edible oil used to be 28 birr [$1.67] a litre two months ago, now you only find it for double that price,” Etifwork said.
According to the 6 April consumer price indices of Ethiopia’s Central Statistical Agency (CSA), the country’s overall inflation rate stood at 25 percent in March, up from 16.5 percent in the same month in 2010.
The CSA said while non-food inflation rose to 24.3 percent from 22.0 percent in the same period last year, the food inflation rate showed the largest jump in more than two years, to 25.5 percent in March from 12.8 percent in February.
To attract exports, Ethiopia devalued its currency in September 2010 by almost 17 percent, leading to a sharp increase in the price of imported goods, particularly fuel.
In an attempt to pre-empt increasing costs, Ethiopia’s trade ministry has, since 6 January, put price controls on various items, including major foodstuffs. However, analysts say the move has proved ineffective; since the beginning of April, state enterprises have started to import food items such as sugar, cooking oil and flour for citizens who can be seen queuing outside shops.
In Burundi, fuel and food prices have nearly doubled in the past three months.
Jamila Manirambona, who lives in Buterere – one of the poorer suburbs of Bujumbura, the capital – hawks pancakes at a market in the city centre. She walks around the shops and stalls selling the pancakes to traders for 200 Burundian francs [$0.16] in a bid to feed, clothe and educate her two children.
“Previously, I could easily sell 150 pancakes per day and would return home as early as midday having sold all I had. Nowadays, even when I have only 75 pancakes, they rarely sell out,” Manirambona told IRIN. “I spend the whole day going around the stalls. Some customers tell me to give them the pancakes on credit and that they will pay later. At the end of the day, I end up with nothing, sometimes with 7,000 francs [$5.80].”
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Manirambona blames the poor purchasing power of her customers, aggravated by high food prices.
“In March, I could buy maize flour for 1,100 francs [$0.90] per kilo, now I need 1,500 [$1.23] francs to buy the same amount of maize flour. There is no other way out except to increase the price of my pancakes but I wonder who will buy them from me?”
Ngendakumana Nunu, who sells rice and beans in Bujumbura’s main market, said if the prices continued to rise she would have to close shop.
Rice imported from Tanzania was sold in March for 1,200 francs [$1] but is now trading at Fr1,400 [$1.15]. A local rice variety sold at Fr1,200 [$1] in March but is now Fr1,300 [$1.07].
Drought and the impact of the La Niña weather phenomenon have adversely affected Burundi’s food security, leading to shortages of foodstuffs such as bananas, the country’s staple.
Also affected is the country’s transport sector. Olivier Ndayishimiye, a taxi driver in Bujumbura, told IRIN he was getting into disagreements more often with his boss over what he makes daily.
“In the evening, I bring him only 7,000 [$5.80] or 8,000 [$6.60], instead of the previous 15,000 [$12.40] but I see that he does not believe me; if he sees me circulating the whole day, he suspects me of cheating him out of the day’s earnings,” Ndayishimiye said. “Customers walk or take the bus when I tell them the taxi fare; others call us names, saying we are thieves trying to con them. Nowadays I spend most of the day just chatting with fellow taxi-drivers.”
Fidèle Karinijabo, a motorcycle taxi-driver in the capital, Kigali, told IRIN his client base had shrunk in the two weeks since the sharp increase in fuel prices.
“We are wondering why the government is so slow in revising prices for transportation,” Karinijabo said.
Agnes Mukanyarwaya, who sells farm produce in Nyabugogo market in a Kigali suburb said the price of many goods had almost doubled.
“There is a need to consider complaints from both consumers and sellers as most of the basic commodities such as cooking oil, sugar and rice are no longer affordable, compared to two months ago,” she said. “We now prefer to sell most commodities outside the market as street vendors, because there has not been any action from government to revise fuel prices downwards.”
|Skyrocketing fuel and food prices have made Kenyans suffer; urgent measures need to be taken to avoid social unrest
The key, she said, was to come up with a compromise between the interests of vendors and consumers.
Rwanda’s National Institute of Statistics reported in April that prices for domestic products such as bread, cereals, vegetables and transport had gone up by an annual 4.11 percent in March, against 2.56 percent in February.
Consumers in Rwanda are grouped in different associations and, although they have managed to come together to some extent in specific advocacy, they are far from achieving a united front.
“We only blame these [consumer] associations for not being able to defend the interests of the general public when looking at the extent to which prices are being distorted by business operators at the market,” Sylvestre Ntakiyimana, a rice grower from Gasabo, a district of Kigali, said.