The State has received Sh24 billion backing from KCB Group for the importation of cheap foods to be distributed through 120,000 shops in efforts to lower the cost of living.
State-owned Kenya National Trading Corporation (KNTC) said on Wednesday it had secured a letter of credit, a guarantee that a seller will receive a buyer’s payment on time, from the bank to support the importation of 100,000 tonnes of household goods on a duty-free basis.
It has mapped 120,000 retail shops in the country where cheap imported foods would be stocked as the government targets to ease the cost of living that pushed inflation to 9.2 percent in February.
The import scheme intends to force other manufacturers to lower their prices of basic goods, with the government stepping in as the de facto controller of the cost of essential commodities.
The KNTC will set the retail prices of goods including cooking oil, sugar, rice and beans in its quest to lower the cost of basic commodities as it seeks to stabilise the runaway price of goods on the shelf, which has seen a two-kilo packet of sugar retail at Sh312 with maize flour of similar quantity going for Sh200.
“The RRP (recommended retail price) will be managed by supply and demand forces. This will not collapse the market but increase competition. It will also ensure other traders manage their pricing achieving the overall objective of price stabilisation,” Pamela Mutua, managing director at KNTC, said on Wednesday.