Food prices in Kenya are rising sharply, with the Common Market for Eastern and Southern Africa (COMESA) Competition Commission pointing fingers at “cartels” and market concentration as key drivers.

Nairobi, along with Tanzania’s commercial hub Dar es Salaam, currently faces some of the highest food inflation in East Africa, particularly in staple items like maize.

According to a new COMESA report, dominant traders are driving up prices by applying “unreasonably high profit margins” in an environment marked by uncompetitive practices. Kenyan consumers are bearing the brunt, especially in basic food inputs like cooking oil and fertilizer.

“African agri-food markets are not working. These pricing distortions are undermining farmers and punishing consumers,” the report stated.

The commission’s data shows Kenyan households are spending nearly twice as much on edible oils, even before VAT, compared to similar markets in the region. These disparities are most pronounced in urban centers such as Nairobi.

The report highlights a lack of competition, insufficient market data, and the overwhelming influence of a few powerful firms in the country’s agricultural supply chains. Failures in distribution, transportation, and storage networks were also cited as contributing factors.

While the Kenyan government has implemented subsidy programs to protect consumers, COMESA found that these efforts fall short. Retail markups for basic food items in Nairobi reach as high as 53% above fair value, rendering the subsidies ineffective. The pricing mismatch underscores the depth of market inefficiencies that continue to challenge food security in the region.

Kenya’s inflation rate hit 4.1% last month, the highest in eight months, driven by shortages of essential food crops like maize, potatoes, and green vegetables—products also flagged in the COMESA report.

Despite relatively modest input and processing costs, Kenyans are paying up to $3 per liter for cooking oil, more than double the estimated cost based on raw materials. “Vegetable oil is largely imported as crude oil and refined locally,” the report noted.

The Kenya National Bureau of Statistics (KNBS) added context, pointing out that the country’s dependence on rain-fed agriculture makes it vulnerable to erratic weather and supply chain disruptions. These vulnerabilities often trigger sudden food shortages and price hikes.

KNBS also emphasized agriculture’s critical role in the national economy. The sector accounts for a major share of Kenya’s exports and supports a large portion of the population through jobs in horticulture, floriculture, and associated supply chains, including farming, packing, shipping, and distribution.