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(Jun 30, 2010) On June 23, 2010, the Kenyan Parliament passed the Price Control (Essential Goods) Bill, 2009, which, if signed into law by the President, will authorize the Minister of Finance to set prices of essential goods and criminalize the buying or selling of goods for prices above those set by the Minister. (Kenya Passes New Price Fixing Law, THE NEW VISION (June 24, 2010), available at http://newvision.co.ug/D/8/220/723788.)

According to the bill, the Minister is authorized to set the retail and wholesale prices of essential goods: maize, maize flour, wheat, wheat flour, rice, cooking fat or oil, sugar, paraffin, diesel, and petrol. (The Price Control (Essential Goods) Bill, 2009, §2, Kenyan Law Report (KLR), http://www.kenyalaw.org/Downloads/Bills/2009/200908.pdf) (last visited June 28, 2010).) The bill also authorizes the Minister to set service charges related to the sale of goods, regardless of whether the goods in question are price controlled. (Id. at §4.)

Any person, a trader or consumer, who charges or pays more than the fixed price for goods or services commits an offense and is punishable on conviction with five years of imprisonment and/or a fine of KES1 million (about US$12,262). (Id. at §6.)

Ephraim M. Maina, a Member of Parliament who sponsored the bill, discussed the reasons for the bill and the intended results in the Memorandum of Objects and Reasons attached to the text of the bill. According to Maina:

This Bill has become necessary because attempts by the Government to use market forces to lower prices as well as Government exhortations to traders not to overcharge consumers of these essential goods have not borne fruit.

It has become critical to control the prices of the listed goods in order to protect Kenyans from exploitative and unscrupulous businesspersons. If enacted, this Bill will help to mitigate the effects of the food shortage with which the country's ordinary citizens are grappling. (Id.)

Amos Kimunya, Kenya's Trade Minster, opposed the bill and argued that it will discourage investment in Kenya. (THE NEW VISION, supra.) Samuel Nyamdemo, an analyst from the University of Nairobi's School of Economics, argued that the bill will encourage farmers to stop producing the artificially cheap goods and will create serious shortages. (Id.)

Author: Hanibal Goitom More by this author
Topic: Foreign trade and international finance More on this topic
Jurisdiction: Kenya More about this jurisdiction

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Last updated: 06/30/2010