(Bloomberg) -- Corn supplies in the next few months will help slow Kenya’s inflation, according to the chairman of one of the nation’s top edible-oil producers. That will be good news for the incoming president.
Inflation will likely slow by December because new supplies of the grain -- used to make ugali, a stiff porridge and staple food consumed by most Kenyans -- will damp price gains, Vimal Shah, chairman of Bidco Africa Ltd., said in an interview with Bloomberg TV. Outgoing President Uhuru Kenyatta capped prices of corn, also known as maize, ahead of the elections.
If price gains slow, that will help incoming president boost his credibility. Kenyans are electing their new leader under the shadow of accelerating inflation and a clamor for jobs by the nation’s youth. Still, economists don’t see the measure peaking before 2023.
Currently our “projections see inflation rising to low double digits, in a 10-11% range by” the last quarter of 2022, said Razia Khan, London-based head of research for Africa and the Middle East at Standard Chartered Bank. Inflation will only slow from the third quarter of next year, she said.
Kenyan inflation accelerated to 8.3% in July, the fastest pace in five years. The Central Bank of Kenya, which in May raised rates for the first time in almost seven years, unexpectedly left its benchmark interest rate unchanged last month, citing easing price pressures.
The two main presidential aspirants -- Raila Odinga and William Ruto -- have pledged to ease the cost of living in the country.
Maize is harvested from the end if August in central Kenya, while in western part of the country it is reaped from January, according to the agriculture ministry.
Annual production is estimated at 3.2 million tons, against consumption of 3.8 million tons, with imports from East African neighbors such as Uganda and Tanzania making up the difference, according to a joint statement by industry groups in May.
In 2020, Mexico was Kenya’s third-largest supplier of maize.
Kenya has also pledged to eliminate fuel subsidies this year, according to the International Monetary Fund. Should oil prices extend their decline, that will also help slow inflation, Shah said.
©2022 Bloomberg L.P.
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