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The autobiography of one of my uncles was published recently. The man was born in 1924 and he tells a lot about life in Kenya from the 1930s onwards.

He recalls that in 1936, school fees was 50 cents per term.

I wanted to find out the equivalence of this cost in the current year [2018] but, unfortunately, Kenyan inflation data only goes back to 1961. Nevertheless, we can work out the average annual inflation over the past 57 years and use it to extrapolate backwards another 25 years to 1936.

The consumer price index in 1961 was 0.91; today, it is 192. In other words, an item that cost Sh0.91 in 1962 will most probably go for about Sh192 today. That is, prices have escalated by a factor of about 210 over the past 57 years.

We may then ask: what was the average annual increment over this period? It is very tempting to simply divide 210 by 57 and get 3.68, but it would be totally wrong! Indeed, it is inconceivable that each year, prices increased by a factor of 3.68.

The correct way to approach the calculation is by asking: what number can be multiplied by itself 57 times to give 210? The answer is 1.098.

This means that an item that cost Sh100 in 1961, probably cost Sh109.8 (=100 x 1.098) in 1962. If you continue multiplying by the same factor (1.098) yearly up to the year 2018, you will get Sh21,000.

Another way of looking at this is that the average annual inflation in Kenya over the past 57 years is 9.8 per cent. I think this is a good long-term average that can be used to extrapolate backwards another 25 years to 1936.

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So; starting from 1961, we divide the consumer price index by 1.098 each year until we get to 1936. Notice that we are now dividing instead multiplying. The reason is that we are going backwards in time; not forward.

Doing that calculation, we find that the consumer price index was 0.087 in 1936. Thus, over the past 82 years, prices of goods and services in Kenya have increased by a factor of 2,200.

In other wards, my uncle’s 50-cents school fees is equivalent to about Sh1,100 today. Is that expensive or cheap? That’s not an easy question because we now have the government free primary education programme.

Still, my uncle mentions in his autobiography that he used to buy one large banana on his way to school. He says it was almost about a foot long and would cost 2 cents.

Now, the 50-cents school fees was money enough to buy 25 bananas. So, I leave you with this question: can you pay primary school fees with 25 big bananas today?



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