Parliament Passes Price Control Bill
Date: Wednesday, June 23, 2010 @ 18:02:55 CDT
Topic: RavenNuke(tm)

NAIROBI - Members of parliament have overwhelmingly passed Hon Ephraim Maina’s 2009 price control bill that seeks to control the prices of essential products.

The purpose of the Bill is to establish a legal framework to require the Minister responsible for finance to fix the maximum retail and wholesale prices for the essential
goods such as  maize, maize flour, cooking fat or oil, sugar, paraffin, diesel and petrol.

The bill effectively outlaws and makes it an offence for a person to sell or to buy the essential goods at a price which exceeds the maximum price fixed for these goods.

The Bill was necessitated by the failed 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.

Parliamentarians believe that it has become critical to control the prices of the essential goods in order to protect Kenyans from exploitative and unscrupulous businesspersons.

 If enacted, this Bill is intended to help to mitigate the effects of the food shortage with which the country’s ordinary citizens are grappling with.

The sponsor of the bill noted that the market for most of these essential goods is dominated by a few market players who appear to work in cahoots to frustrate the forces of demand and supply.

The result of this cartel like behaviour is that the prices of these goods have remained unreasonably high and out of the reach of most of our people even when these prices should be coming down in light of prevailing international prices and the global recession.

The bill is likely to generate negative responses from the World Bank and IMF the two global institutions that have been in the forefront on economic liberalization in the developing world. The Breton woods institutions see price controls as regressive and a disincentive to the capital investments required in developing countries.

President Kibaki, an accomplished economist himself, will have to balance the short economic pains experienced by ordinary citizens and the long term economic plans when deciding on whether to assent the bill into law or refer it back to parliament for amendment. With the referendum around the corner, there is no much time for him to wiggle in either direction.

KWP Report

This article comes from The kenya

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