cost of living report of

188 Pages·2015·14.85 MB·English

TRE/.SUft T
LI,,T/.RY
COST OF LIVING COMMISSION
REPORT OF ENQUIRY
r-€N
PERSONNEIJ OF THE COMMISSION.
COMMISSIONER,S.
IIrs IIoNouR, SrR J. W. Benru, Kr., c.B.E. (Chairman).
IIrs Ifonoun Mn. Jusrrcs G. H. Prcrnnrrc (Chairman in the absence ol
Sir Jacob Barth, lrom Kenya).
'Isp How. Corvrvey Hlnvpy.
'WAr,ron,
Mn. A. Statistician to the Governors' Conference.
Mn. H. E. Wer,nv, District Commissioner, Nairobi.
Mn. A. E. Fonnpsr, Principal Assistant Treasurer (Seuetary).
Mn. A. A. I-:pcer.
Mn. W. Tvson.
Mas. Ar,rcp Bperorv.
Mn. T. A. Wooo, o.M.c., Irr.B.E.
1 Mn. J. Gneuelr Dewsolr.
lrr
: Mn. A. IfonNsv.
t
Mn. U. K. Oze.
Assistant S ecretaries.
Mn. K. IJ. IfuNTEn, Assistant District Commissioner, Nairobi.
Mn. w.w. Broour.
t
,
!
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,
LIST Otr WITNESSES AND CORBESPONDENTS.
PAGE. PAGE.
1. Anglo Baltic Timber Co. 60 31. Kilima Kiu Estates 1
59. Anonymous 59 61. Legat 11
60. Anonymous 21 30. Ley, Colonel E. M. 34
63. Anonymous 31 33. I-.,iston-Foulis, Chs. 4
2. Agriculture, Acting Director of .. . 46 35. I:urnbwa Co-operative Society t4
,)n
!). Aronson, J. G. B9 Mayers, G. R,. 9, 77
4. Bailey, Mrs. M. P. 16 38. Nfaxwell Davies, W. H. 4L
5. Beaton, Mrs. A. 12,13 41. Nervrnark, D. 47
6. Beckley, Mrs. D. 8, 15 16. Nicholson, Major R. (the late) ... 4t
7. Blacklaws and Brown 35 42. Ogden, NIrs. 40
8. Blowers, A. II. 69 43. Patterson, Major J. t)l
I Brassey Edwards, Major 44 57. Raf{les Cox, Mrs. 30
10. Brown, Major C. E. 72 44. Ramisi Sugar Estate
11. Rudheo. N. M. 4l 1. Robinson, Ir. P. 60
12. Rrrtter lletailers t2 45. Sands, A. B. 56
13. Churuber o f Commerce, 39. Srnithfield Rutchery ... 16,37
ated of E.A. 5
46. Steele, Major C. 54
L4, Cole, Hon. G. 2
26. Stockbreeders l)irect Meat
57. Cox, Mrs. Ra1fles 30 Supply, Ltd. 3B
15. Corbett, N. 6 47. Stollard, Miss K. l5
16. Dalgety & Co. 4l 48. Stronacli, J. C. 67
17. Delamere, Irord t2 o. Sukari, Ltd. B9
57. District Commissioner 12 22. Tannahill, A. C. 61
18. Eadies Footwear, I-"rtd. 35 49. Torr: J. 34
19. East African Estates, 30 50. Town Clerk t4
20. E. A. W. League 30 19. Tucker, Colonel W. K. 30
21. Elliot, M. S. & Co. 33 44. Turney, Major F. 91
22. Equator Saw Mills 61 5L. Unga, Ltd. t7
23. Fochs, Mrs. M. 54 62. \reterinary Dept. Officer 62
25. Gasson, R. V. I 9. \ieterinary O{ficer, Acting Chief... 44
26. Ilarris, l\{ajor 3B 37. Victorla Nyanza Sugar Co., Ltd. 9, 77
2. If arrison, E. 46 oJ. Watkins, Mrs. 24
27. Iifenderson, H. E. 74 bl. Welby, H. E. 72
28. Ilowse & McGeorge,. Lttl. 36 54. White, A. A. 36
29. Ilunter A. C. 3 bu. \Yhiteaway I=laidlaw & Co., Ltd. 24
30. Jacobs, I-.,,tcI. 34 55. Wilson, C. J. 6
2t. Joiner, J. D. 33 5(t. Wimhurst, Ltrl. itz
,
1 31. Joyce, F. de Y 1
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REPORT OF THE COMMISSION.
Youn ExcuJLENcY,
Your Commission was appointed to inquire into and report upon :*-
(a) The reason for the rise in the cost of commodities in Kenya and
particularly in Nair,obi, with special reference to local products;
ancl
(b) The e,ost of living in relation to salary and earnings.
2. ft appearecl advisable in the firsb instance to determine the extent
of any changes in the level of prices of commodities in Kenya, and advantage
rvas taken of the Statistical organisation functioning' under the Conference
of East African Governors to collect and analyse returns of prices for as
many articles as possible cluring the past four years.
3. Consiilerable difficuliy was experienced in securing returns from
retailers ancl this delayed the analytical work for many months. It was
necessary in the first place for the Statistical Department to prepare forms
and clistribute them to the various retail and wholesale establishments, then
to collect and analyse the results.
4. The tables showing the changes in the price level of cornrnodities
were at first brought up to June, 1928, and the results, wliich depentl on
about 120 articles, q,re shown as relative index numbers on Jautary, L927,
as base, group by group, in Table 2 of Appendix A. The actual values
will be founcl in Table 1. As so much delay had occurred in printing these
tables, it was considered advisable to extend them and bring them up to
October, 1928. This was accordingly clone, and the results are shown in
l'able 3 of Appendix A for each of the months July, August, September and
October, 1928, computed on 1927 and 1924 as bases.
5. The articles are cliviiled into 7 groups as follows:-
1. Groceries.
2. Clothing.
3. Household Requirements.
4. Motor Transport.
5. Pharmaceutical Products.
6. Milk.
7. Meat and Fish.
The mean inclex numbers for each of these groups from L924 to October,
1928, on January, L927, as base, are as follows :-
Epoch
Gnoup
t926 t927 1""; 6-ctoirer
1928 1928
l. Croceries tM2 1062 1039 1007 1010 995
2. Clothing .. I115 1 138 t046 999 983 987
3. Household Requirements 1110 1033 1099 98B o<a 942
4. Motor Transport 1232 1264 I 135 974 960 930
5. Pharmaceutical Products to44 983 t0t2 tao2 995 995
6. Milk 756 865 1000 1000 1000 1000
7. Meat and Fish 890 972 tot2 1006 1110 1110
Unweighted N{ean.. 1049 997
X'rom these figures it will be seen that the unweighted means of the 7 groups
increase slightly from 1030 to L052 between 1924 and 1925, anrl then
clecrease to 994 in October, 1928.
6. fn order to ascertain the change which hacl taken place between .
1924 antl 1928 shown as a percentage of the value rn L924, the prices in the
various groups for October, L928, were calculatetl as an index number on
iv
1924 as base, and it will be seen that prices have fallen by 2.4 per cent. of
the value in 1924. It shouid be noted that all these values depend upon the
average of the highest ancl lowest recorcleii values. t?
7. While this rnethod indicates the tlend of prices of commodities, the
r:ost of living of the individual should in realiiy be the minimum at which
such articles of consumption can be procured on the local market. The
tlifficulties of distribution, however, and the methods of marketing to which
housekeepers in Kenya are condemned, make it almost impossible for
individuals to take advantage of these minirnurn prices, so that the average
appears to be a more representative figure than the minimum under the
conditions obtaining in Kenya. The difliculties of distriklution and marketing
will be referrecl to in later paragraphs of this report.
B. It is not an easy matter to determine the proportion in which these
various groups enter into the ordinary faniiiy burlget, but one or two carefully-
conirolled schedules indicate that the following proportions may be taken
as fairly representative, the total expenditure on the groups being taken as
100 :-
Weigh,t in tamily budget
Group. efrpenses.
1. Groceries 49
2. Clothing 15
ro). Household Requirements 6
4. lVlotor Transport 11 I
5. Pharmaceutical Products 4
6. Milk 4
7. Meat and Fish 11
I
100
,l
This leads to the following relative mean weighted values for each year :-
7924 1060
1925 L724 "l
1926 1048
1927 1040
June 1928 1005
I
October 1928 997
I
Ii will be seen in c,onsequence that the tendency has been downwards
since 1925. Under Group 1 : Groceries, local produce was then separated
from imported articles. The two resulting index values are as follows :-
For 76 articles ol I
Iocal groaery For 39 im,ported
produce. articles.
1924 955 1100
l-925 1050 1071
1926 1052 1043
1927 1006 1002
June 1928 1014 999
If to ihese local grocery products are added Meat, Fish and NIilk the
following figures are obtained for the 19 articles :-
For 79 arLicles of
local produce.
1924 938
7925 1034
L926 t052
7927 1013
June 1928 1023
lr'
The corresponding figures for Milk, Meat ancl Fish are as follows :-
Ju,ne Oct.
7924. 7925. 7926. 7927. 1928. 7928.
Mirk 7DO 865 ... 1000 1000 1000 1000
Meat 890 969 998 992 1110 1110
X'ish BB9 1009 1167 7t57 1111 1111
Mean 845
L From these values it is seen that the local prices have increased from
938 in lg24 to 1023 in October, 1928, or by 10 per cent. on the 1927 valueS,
while imported articles have clecreased from 1100 t,o 999 during the same
period. The Commission is inclined to the belief that the trend of prices
of the local produce has been the principal factor in determining the demand
for inquiry into cost of living values, as popular attention is arrested more
easily by the comparatively few and very essential articles which are
produced locally than by the multitude of irnported articles which are in
common use, while the relative value of each is overlooked in ihe budget
expenditure
10; The relation between wholesale prices and retail prices of the
principal articles of local produce was next examined, and the result is shown
in Table 6 of Appendix {. The percentage difference between the wholesale
price anil the retail price is computed both on the w'liolesale price and on the
retail price respectively, and shown in the last column of this'Iable.
11. Dealing with these articles individually it is found that the per-
centage difference in the case of Flour, based on the wholesale price,
jncreasetl from 36.6 per cent. in 1925 to over 50 per cent. in the third quarter
of 1928. 'I'his change was due to,a steady decrease in the wholesale price
not reflected in the retail price until the fourth quarter of 1928.* Retail profits
in consequence increasecl. In the case of Butter, the percentage decreased
from 26 per cent. in 1925 to ab,out 10 per cent. in 1928; for this item it is
the wholesale price which has risen more rapidly than the retail so that
retail profits are less. Bcicom sholvs a decrease from 52 per cent. in Lg24 to
37 per cent. in the third quarter of 1928; to this comparatively low value in
the third quarter, 1928, reference will be made in subsequent paragraphs
dealing wiih the effect of the publication of the prices of staple articles,
which has been. the policy of the Statistical Department lor the last 18
moflths. The percentage difference in the case gf Beer increasecl from
r-2O per..cent.,in, 1924.to.30 per.cent. in 1928. This increase was due partly
to a faljing off in .the wholesale price and partly to an increase in
the retaii lrice. ' In the I case of Maize Meal , the percentage difference
decreased from 37 per cent. in 7927 to 22 per cent. in the sec.ond quartel
of 1928. The recorcls for previous yea,rs in respect of this article are
defective. The percentage difference in ihe case of Milk fell from
135 per cent. in 1924 to 60 per cent. in 1928. The retail price of milk has
been steady since 7926, while the rvholesale has risen by 100 pel'
cent. since 1924 with consequent clecrease in retail profits. The percentage
difference in the case of Su.gar has been very variable; it rose from 17 per
cent. in 1924 to 51 per cent. in 1926, and fell to 1() per cent. in the third
cluarter of 1928, fn the case of Cheese the decrease in the percentage difference
is very markecl, having fallerr from 57 per cent. in L9'24 to below 10 per cent.
in 1928 ; the wholesale price has increased steadily and niore rapidly than
the retail price.
12. Further information concerning the trend of prices of imported
articles was sought from the Tratle Reports, and the index values'of a large
number of articles will he found'in Appenilix B. It has not been possible,
*'I'he
corresponding values for the fourth quarter, 1928, will be found in the resum6
on page 133. They are as follows; flour,35l; hutter, l2%; bhcon,29l;
beet, 281 1 maize meal, 341 ; milk, 89f ; sugar, 2l)i, ztnd, cheese, 16f .
vlr
for obvious reasons, to arrange these groups completely couparable with
those formed from articles reiailed in Nairobi, but a rough classification has
been made into groups closely resembling them, as follows :-
Groceries.
Clothing.
I{ousehold Requirements.
Motor Transport.
The mean index numbers derived from these Customs figures are as follows :-
l. Index Numbers on 1927 as base.
Me,u{ oF INDEX Nurrasns oF Arrr, Ilrponrno Anrrcrps AS DERTVED FRoM TsE
Cusrolrs RprunNs WIIICE COULD BE CI,ASSIFIED
INTO TIIF] For,LowrNG Gnoups.
7923. 7924. 7925. 7926. 7927.
Groceries 1091 1019 1046 t025 .. 1000
Clothing LQBT 1340 1356 l22B .. 1000
Household Requirements 1118 1058 1010 l042 .. 1000
Motor Transport 1163 1071 .. 1000
Mean 1
I
1
l
2. Index Numbers on 1927 as base.
I
Mpe,lt or fwnnx Nulrnpns oF Arrrr flrponrnn Anrrcr,gs AS DERTvED FR,ol\t
Cusroirrs Bnrunxs wHrcn cour,D Nor BE cr,ASSrFrED uNDEn, ANy
' oF TrIE l{n.rnrNos ABovE, DETATTJs oF wurcu I
ARE snowN rr Appnuorx B.
7923. 7924. 7925. 7926. 7927.
Building Materials L275 1203 1299 1113 1000
Office Material 7142 1166 1086 1116 1000 :l
Agricultural Implements 1340 12Bg 1161 1079 1000
Sunclry (not classified) ... 1305 1254 1385 l2l5 1000
Mean
Mean of all articles l2]5 1L77 1176 1110 1000
Separating the imported articles which have fallen in price from those
which have risen we fintl :-
FALLEN IN PRICE-GROUP I.-GROCERIES.
Maize Meal and Flour.
Tea.
Sugar in bulk and in jaggerv.
Sugar. Othe's, mostly in tins.
Marmalade, fams and .fellies.
Fruits, Bottled. Canned and otherwise Pre-
served-
Milk, Condensed.
Butter. GROCERIES.
Margarine and Marrorv-fat.
Fish, Canned. MBIN INorx Nuusnns FoR ARTICLES
Whisky. Pnrcrs oF wurcH Hevr Fanrx.
Rum.
Gin and Geneva. ' 1924 .. l1B1
Cigarettes. 1925 .. 1t23
Tobacco, Manufactured. 1926 .. 1069
Snuff. 1927 .. 1000
Spices.
Confectionery.
Meat, Tinned, Canned and otherwise Pre-
served.