Kenya’s Price Control Bill Set Decide Prices of Maize, Rice, Sugar and Other Essential Goods
The Price Control (Essential Goods) (Amendment) Bill, 2024, will give the Treasury Cabinet Secretary the authority to set the maximum and minimum prices for all essential goods.
The products include maize, maize flour, wheat, wheat flour, rice, cooking fat or oil, sugar, and prescribed pharmaceutical drugs.
The bill’s rationale is to protect Kenyans with low incomes from rising prices by stabilising costs.
The bill will also prevent sudden price changes for essential goods, which frequently result in a decrease in the public’s purchasing power.
Nominated Senator Tabitha Mutinda’s sponsored bill adds that it will ensure access to essential goods during times of crisis, such as natural disasters, and public health emergencies.
Subsequently, it will prevent monopolies from exploiting Kenyans by inflating prices.
Another Bill to read through.
— Mwango Capital (@MwangoCapital) August 6, 2024
This is the Price Control (Essential Goods) (Amendment) Bill, 2024 that seeks to regulate the prices of essential commodities to ensure their affordability and availability, particularly for low-income Kenyans:
Some key points:
—The Cabinet… pic.twitter.com/S7Y2njAlqK
“This Bill seeks to amend the Price Control (Essential Goods) Act, 2011 to regulate the prices of essential commodities in order to secure their availability at reasonable prices for all Kenyans, especially the low-income earners,” the bill reads in part.
“The enactment of this law will also ensure that Kenyans are protected from exploitative and unscrupulous businesspersons.”
Furthermore, the bill will give the Treasury CS the authority to declare any good to be an essential commodity and to specify the category of people to whom fixed prices will apply.
The CS will also specify the time period for which the uniform prices will apply.
According to the bill, the CS must consult with all stakeholders, including farmers, manufacturers, and retailers, before setting prices.
How the CS will determine prices.
Before deciding on prices, the CS will consider seven factors.
These include normal market conditions, the importance of essential goods in the market, whether the new prices will increase competitiveness in the local market, environmental and health requirements in the production and use of the goods, the public’s current purchasing power, and whether there are alternatives for purchasing the aforementioned items.
Also, the CS must consider whether the new prices will prevent the company from operating competitively in the marketplace.
How the government will ensure compliance.
The CS will appoint a Price Control Unit under his Ministry to monitor and enforce the new prices.
The unit will be led by a Director of Price Control and will need to work with existing agencies to prevent market manipulation.
It will also make recommendations to the government based on an assessment of market trends, consumer needs, and the impact of price controls.
The Unit will also educate the public about price control policies, their significance, and the implications for their businesses.
They will also create quarterly reports outlining the effectiveness of the new prices and how adjustments can be made to improve the economy.
Critics argue that allowing the government to set prices will result in a number of consequences, including lower quality as producers cut costs to maintain profits.
This may also discourage investment in the production of critical goods if businesses are unable to cover their costs.
Fixed prices that do not reflect market demand or costs may also prevent farmers and manufacturers from improving their products.
This means that the government must strike a balance between the benefits of price control and the prevention of market distortions.
Kenya’s Price Control Bill Set Decide Prices of Maize, Rice, Sugar and Other Essential Goods
