, NAIROBI, Kenya, Sep 5 – Mathira Member of Parliament Ephraim Maina says he is not disappointed with the refusal by President Mwai Kibaki to assent to the Price Control Bill that sought to place a cap on the cost of essential goods.
The Bill was passed by MPs in June and immediately caused a storm as manufacturers said it would stifle industries and slow down the growth of the economy.
The legislator said that the Bill would now be returned to Parliament for amendments.
In rejecting the Bill, the President said: "Apart from going against the policy of liberalisation, this clause also violates the fundamental principle of the World Trade Organization on national treatment of which of Kenya is a contracting party."
The head of state said his decision was based on Article Three of the WTO\’s General Agreement on Tariffs and Trade that warned that internal price control measures by contracting parties could be harmful.
"This obligation places a duty on Kenya to avoid measures including price controls, which would have prejudicial effects on other contracting parties supplying imported products to Kenya," Kibaki said in his memorandum.
The President instead recommended that the Bill be amended to allow Finance Minister to only set maximum prices of gazetted essential commodities upon consultation with the concerned industry.
Mr Maina said: "His Excellency the President did not just reject the Bill. What he has done is to propose amendments as provided for in the constitution, because he is the head of the government and thinks the Bill in a way will contradict some of the government policies," he said.
He stated that alternative solutions should be sought to address the issues articulated in the Bill.
"The situation still remains unpalatable in this country and I expect the government to come up with policies that are going to change the situation," he said. "It\’s not enough for government to say that the Bill cannot be assented to without giving alternatives to the issues that the Bill is addressing."
The country abandoned fixing essential food and fuel prices in the 1990s in favor of economic liberalisation.
Parliament had voted to allow the Finance Minister to set maximum retail and wholesale prices for maize flour, wheat flour, rice, cooking oil, sugar, paraffin, diesel and petrol.
The National Economic and Social Council has been consistent in discouraging price controls on the basis a liberalised market.
However the House can reject the memorandum by securing a 75 percent vote needed to override a presidential veto.