Urban Inflation Index: December 2008

Real Estate Moment

$10 hotel room

Real Estate Moment

Electric Shock

Finally have one full year of data on expenses incurred. As part of an experiment I have tried to quantify daily spending over the last 365 days (and categorized them as follows)

Rent 37%, Investments 9%, Education 9% (bound to go up each coming year), Being a good guy 8% (Gifts 4%, Family 3%, Charity 1%), Fuel 7% (offset by more public transport use), Drinks 7% (socializing & entertaining), Dining 5%, Groceries 4% (not my docket) Communications 3% (take that Michael Joseph), Transport 3% (reading novels in the matatu), Utilities 3% (cost may double this year), Furniture 3%, Recreation 2% (I can afford to play more golf and get a decent handicap), Newspapers 2% (keeping up with politics & finance), Clothing 2% (FYI: Dr. Manu Chandaria only has 7 suits), Repairs 2%, Parking 1%, Personal 1%, Electronics 1%.

a week early, with some changes

Tracking prices of some urban commodities compared to six months ago and a year ago

Fuel: Litre of petrol fuel (at local petrol station) is Kshs. 101.50 ~ $1.50 (up 15.3% in ½ year)
6 months ago: Kshs. 87.99, Year ago: Kshs. 80.79
despite record world oil prices, government joint tender system has cushioned some impact on the economy – even oil companies are not celebrating

Staple food: Maize flour (2 kg. Unga pack at Uchumi) is Kshs. 73 (up 40% in ½ year)
6 months ago Kshs. 52, Year ago Kshs. 50
farming woes continue, poor crop expected this year

Other food item: Sugar (2 kg. Mumias pack) at Uchumi is Kshs. 145 (down 3% in ½ year)
6 months ago: Kshs. 150, Year ago Kshs. 150 Kshs
new minister trying to clean up notorious sector

Entertainment: Bottle of Tusker beer (at local pub) is Kshs. 130 (up 8.3% in ½ year)
6 months ago; Kshs. 120, Year ago: Kshs. 100
agricultural input costs rising, but post-budget sin tax pushed prices up. You need this to network in Kenya, or switch to Alvaro?

Communications: mobile phone promotion
This month Safaricom has Ongea tariff which has phone calls priced Kshs. 10 per minute all day, while Celtel has a Kshs. 3 per minute tariff (and with a conditional ‘free’ call package thrown in). Safaricom is also promoting broadband hotspots for the entire Nairobi and Mombasa areas.
- Six months go: Safaricom had extended the hours for Kshs. 8 calls on Saasa tariff, while Celtel had Kshs. 4 per minute calls to 3 preferred numbers
- A year ago Safaricom had Super Tariffic tariff which has calls 38% cheaper and SMS 30% cheaper than the previous tariff
mobile communications one of the few things that are getting cheaper

Exchange rate
1 US$ equals Kshs. 67.4 (shilling has appreciated 4.7% in ½ year)
6 months ago: 70.7, Year ago: 66.5
strong , but now sliding, shilling has cushioned some impact of high oil prices, but exporters are complaining

Electricity cost
New addition
My electricity bill in July 2008 is Kshs. 1,860
A year ago was Kshs. 995
Consumption was the same, the culprit was fuel costs adjustment which added Kshs. 820(649c/kwh) to my bill compared to Kshs. 200 shillings (170c/kwh) a year ago as KPLC recently increased the electricity charges which could have some adverse effect on the economy later in the year – already big manufacturers are investing in power plants and alternative generation sources.

12 Free Things in Nairobi

back to normal

Compared to a year ago

This shows that not much changed for those in Nairobi able to travel around and shop properly at Uchumi that life is pretty normal as far as shopping is concerned.

Litre of petrol: 87.99 shillings (~$5.50 a gallon) and up 18% from a year ago (then 74.29) when you drive around Nairobi you can get prices from about 85 to 92 this week For petrol prices, I have been tracking a brand name station that tends to have slightly lower prices than may parts of the city where the price is at around 91 shillings. And these are expected to go up this year as are electricity bills which are already being billed at 12% higher for residential house. Energy Minister Kiraitu Murungi sounded out another warning yesterday to petrol companies to adjust the prices downwards when international oil prices drop – but the companies have, over the years ignored previous warnings from Ministers and government officials, and not passed on any savings to motorists.

Maize meal ugali (2 kg. unga) 52 shillings (50 a year ago)

Sugar (2 kg. Mumias pack) 150 shillings (no change from a year ago)
Fresh food prices have gone up also. Milk and bread have increased by a few shillings depending on where you shop. The prices of vegetables have gone up, some even up to 4X what they were before the election, but vegetable prices are seasonal and once supplies and fresh harvest kick in, the prices should adjust downwards.

Tusker beer: 120 shillings at local pub - up 20% (from 100 a year ago)
some pubs experienced shortages in the post-election period until the only beer they were left with was Guinness

(Safaricom) Mobile phone promotion: a year ago Safaricom had introduced Saasa - with 8 shillings per minute calls during off peak hours. This year they have extended the hours that off-peak applies, while rival Celtel has lowered the bar with 4 shilling per minute calls to 3 preferred numbers
What i really want from mobile company is for one tariff to focus on cheap data charges – SMS, Internet browsing – while voice can remain expensive

US Dollar exchange rate: 70.7 shilling to the dollar - unchanged (was 69.97 a year ago). But this is abnormal as it does not capture the the strength of the Kenya shilling which had appreciated to about 63 just before the election – from December it has lost 10% against the dollar and 17% against the Euro (overall it is 15% weaker against the Euro a year ago.

August 07 – changes from 6 months ago

- Litre of fuel Kshs. 80.79 ~ $1.21 (up 8.75%)
- Maize meal (2 kg. Unga) 50 shillings (no change)
- Sugar (2 kg. Mumias pack) 150 shillings (no change)
- Tusker beer: 100 shillings at local (no change)
- Safaricom promotion: Then: was Saasa - with 8 shillings per minute calls during off peak hour. Now is new shape of Safaricom including a new Super Tariffic tariff which has calls 38% cheaper and SMS 30% cheaper than the previous Tariffic tariff
- US Dollar exchange rate: Kshs. 66.50 (5% weaker against the shilling)
- Plastics items are not being tracked, but milk and bread have gone up since the budget speech read in June.

Personal expenses
I tried using various online services to track expenses, but eventually fell back to Microsoft Excel and built a tracker that fit my needs. For July 2007;

- Rent 30% (high, but it’s safe and close to town)
- Charity 14% (one time event)
- Electronics 11% (new phone, but do I say)
- Fuel 8% (lower than expected, but my daily commute is short)
- Drinks 6% (Rather low, so should not feel guilty)
- Relatives 6% (unavoidable, non recurring expense)
- Investments 5% (should be higher, but there’s nothing promising till end of August)
- Dining 5%
- Parking 4% (take that Mr. Mayor)
- Newspaper 2% (rather high)
- Gift 2% (for every time I visit someone’s’ house)
- Utilities 2% (electricity & water)
- Communications 2% (mostly Safaricom)
- Groceries 2%
- Personal 1%

sports
- I love the new G TV advertisement which compares the three English premiership soccer packages
Get 3 games a month for 0 shillings i.e. Nation TV (NTV)
Get 6 games a month for $70 ~ i.e. DSTV
Or 32 games a month for Kshs 2,750 (i.e. GTV)
but this weekend, Supersport will show opening matches of the big four teams Liverpool, Arsenal, Chelsea, and Manchester Utd
-With all the fallout from the Hungarian Grand Prix, it should be pointed out (to non-F1 fans) that Hamilton started the fracas on Saturday when he deliberately ignored a direct order from Ron Dennis (team Boss) to let Alonso past on the track during the early stages of qualifying three.