KENYA – The government of Kenya is set to gain sweeping powers to regulate the prices of essential goods in a bid to stabilize the market and protect Kenyan consumers from exploitation.
This development comes with the introduction of the Price Control (Essential Goods) (Amendment) Bill, 2024, which aims to give the state authority to set both retail and wholesale prices for key commodities.
It seeks to amend the Price Control (Essential Goods) Act, 2011, and specifically targets goods such as maize, maize flour, wheat, wheat flour, rice, cooking fat or oil, sugar, and certain pharmaceutical drugs.
The proposed legislation, spearheaded by nominated Senator Tabitha Mutinda, has been introduced in the Senate for its First Reading.
“This Bill seeks to regulate the prices of essential commodities in order to secure their availability at reasonable prices for all Kenyans, especially low-income earners,” the Bill states.
According to the Bill, the National Treasury Cabinet Secretary (CS) will be empowered to fix the minimum and maximum retail and wholesale prices for these essential goods through orders published in the Gazette.
Furthermore, the CS may declare additional goods as essential commodities and set price controls after consultations with industry stakeholders.
Proponents of the Bill, including Senator Mutinda, argue that the law will prevent essential goods from becoming unaffordable, stabilize prices, and protect Kenyans from exploitative practices by unscrupulous businesspeople. They also believe it will prevent sudden price fluctuations that could harm consumer purchasing power and overall welfare.
However, the Bill has drawn sharp criticism from economists who warn that it could cripple the economy.
Former Mandera Senator Billow Kerrow voiced concerns that the proposed legislation would reverse economic liberalization and undermine the free market economy.
“Price controls will take us back to the 1992 KANU era. If this Bill is passed, it will kill investment and our competitiveness in the region,” Kerrow cautioned.
He added that the legislation could also lead to increased corruption and rent-seeking behaviour within the government.
The Bill outlines that in setting price controls, the CS must consider factors such as maintaining minimal restrictions on competition, preserving normal market conditions, and addressing severe market disruptions that cause price fluctuations. The importance of the essential goods in supporting economic development and consumer purchasing power will also be taken into account.
Currently, price regulation in Kenya is limited to fuel products, which are adjusted monthly by the Energy and Petroleum Regulatory Authority (EPRA) based on global market trends.
If the new Bill becomes law, it will expand the scope of government intervention in the economy, with far-reaching implications for both businesses and consumers.
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