The National Dialogue Committee (NADCO) has failed to propose tangible ways to reduce the high cost of living.  

This sentiment comes after the release of the NADCO 2023 report, launched on November 25 by a 10-member delegation team, which has elicited reactions among Kenyans.

The committee, in its report, said that it was unable to reach a consensus on several proposals on the matter of the cost of living, including the reduction of Value Added Tax (VAT) on fuel from 16 per cent to eight per cent and the scrapping of the housing levy, two issues in the Finance Act 2023 which have rubbed Kenyans the wrong way.   

Azimio La Umoja-One Kenya coalition party leader Raila Odinga termed the report as “ultimately imperfect and unfinished” but “a good start”.

“We have agreed to disagree on the most important matter to us. We made what we believed were reasonable proposals on how to address the rising cost of living. But the government side flatly refused terming it their exclusive business and further arguing that they got the mandate of Kenyans to execute their Kenya Kwanza economic agenda,” Mr Odinga said in a statement. 

He added that they will be engaging Kenyans further in the coming weeks because the pain of the cost of living is unbearable. 

The Azimio statement on the NADCO report further indicated that its delegation pushed for the complete overhaul of the Finance Act 2023, which had come with harsh taxation measures that continue to make life unbearable to an overwhelming majority of Kenyans. 

“At no expense to the government, we deployed our team of economists to recommend to the administration measures which, if adopted, would immediately bring the cost of living down,” the Azimio statement read in part. 

President William Ruto, while delivering the State of the Nation Address in a joint sitting of the National Assembly and the Senate at Parliament Buildings on November 9, pledged the government’s unwavering commitment to addressing the soaring cost of living. 

“The cost of living is not an abstract phenomenon. It is a reality experienced by all households, which can be addressed through practical action and effective measures. One of the most salient interventions in addressing the high cost of living is the strategy to support agricultural production throughout the sector’s range of food and cash crops as well as the livestock value chain,” President Ruto said. 

What’s driving the soaring cost of living?

Several factors in the domestic and global markets are responsible. In the domestic market, prolonged drought in 2022 was the main trigger. This disrupted the food supply, increasing reliance on imports. 

Another factor is the depreciation of the Kenya shilling against major trading currencies like the US dollar, the Euro and the Sterling Pound, which contributed to the rise in prices of imported commodities like food, fuel and fertiliser. Kenya is a net exporter of unprocessed food items and is also a net importer of processed food products.

Within the global context, the Russia-Ukraine conflict disrupted the supply of wheat, edible oils, and fertiliser. Kenya, to a large extent, is dependent on imports of wheat and fertiliser from Russia and Ukraine. The surge in oil prices within the global markets also trickled to pump prices locally. 

NADCO recommendations on cost of living

The report recommends that all arms of government shall reduce their travel budgets by 50 per cent and that the Salaries and Remuneration Commission (SRC) review Daily Subsistence Allowances for State and Public Officers to reduce by 30 per cent.

The committee also recommends that the Ministry of Energy and Petroleum, in liaison with the National Treasury, reduce the road maintenance levy and the anti-adulteration levy by KShs5 and KShs3 per litre, respectively.

NADCO further recommends that the national government finalises the transfer of all devolved functions and provides for the accompanying resources to the county governments. 

Additionally, it recommends that Parliament amend the constitution to provide for the equitable share to the county governments not to be less than 20 per cent of all revenue collected by the national government from the current 15 per cent. 

However, NADCO was able to build consensus on a majority of issues.

Electoral justice and related matters 

NADCO recommended the evaluation of the 2022 electoral process (an audit of the 2022 electoral process). The committee’s report also recommended the establishment of an expanded selection panel from the current 7-member to a 9-member selection panel. Additionally, there was a recommendation for the increase of timelines within which the Supreme Court shall hear and determine a petition challenging the validity of a presidential election from 14 to 21 days. And a recommendation that legal reforms passed less than 18 months before the general elections become effective in the next electoral cycle. 

Entrenching of funds into the constitution

NADCO recommended the entrenchment of NG-CDF, the National Government Affirmative Action Fund (NGAAF), and the Senate Oversight Fund into the constitution. Also, there was an agreement that the Ward Development Fund be established by statute.  

Establishment and entrenchment of State Offices 

The team agreed that there was a need to establish the Office of the Leader of the Official Opposition, who is the leader of the largest party/coalition of political parties that garnered the second-greatest number of votes in the immediately preceding presidential elections with two deputies. 

Additionally, NADCO recommended the establishment of the Office of Prime Minister to be nominated and, upon approval by the National Assembly, appointed by the President.

Fidelity to the law on multiparty democracy

NADCO recommended the establishment of the Independent Political Parties Regulatory Commission as an independent body that shall be responsible for the registration of political parties and their office holders and the management of political parties’ funds. A role currently vested in the Office of the Registrar of Political Parties.