Uganda’s inflation rose to 5.7 percent year-on-year in December from 4.6 percent last month, after a drought fueled a surge in food prices, the statistics office said on Friday.
Similarly, the annual core inflation increased to 5.9% for the year ending December 2016 as compared to 5.2% of November 2016. Transport registered an increase of 5.2% for the year ending December 2016 as compaired to 2.9 of November of the same year.
Various parts of Uganda like Kampala, Jinja, Mbale, Gulu, Arua,Photportal, were used as sample areas and among these,Arua recorded the highest rate of inflation of 8.5% followed byMbale.
This is due to the fact that 13.5% was recorded as the increase, moving all the way from 9.4% on food and drinks as well as the price for the clothes.
In Fort portal inflation increased from 6.4% to 7.4% as covered from food and non alcoholic drinks. Transport in this area increased from 1.2% to 4.1% ,an increase seen as a double figure .
With transport he commended the South Sudan that has played a big role in the exportation of the ugandan food from the country.
“when you go to the Arua bus park, alote of food is being loaded to the buses heading to South Sudan.” Says Peter Musoke.
In uganda, when you move to various places around the country, many people have experienced a reduction in the food supply due to the fact that the dry seasons are too long.
The central bank monitors core inflation for monetary policy purposes and it strips out food, fuel, metered water and electricity prices.
The Uganda Bureau of Statistics (UBOS) attributed the jump in core inflation to an uptick in prices of some services like transportation and hospitality.
On a monthly basis, prices increased by 1.2 percent this month, compared to a rise of 0.7 percent in November.
The index for food and non-alcoholic beverages category, which has the heaviest weight in the inflation basket, rose by 7.3 percent on an annualized basis in December, up from 5.2 percent last month, UBOS said.
David Bagambe, a trader at Diamond Trust Bank, said the price pressures reflected the impact of a prolonged drought that cut crop harvest in most areas, triggering food shortages in large parts of the country.
“The drought was hard and the tick up in prices was largely expected,” he said.
As inflation rose, the country’s gross domestic product fell by 0.2 percent in the first quarter of fiscal year 2016/2017 (July-June) after a revised 0.6 percent expansion in the preceding quarter, the statistics office said on Friday.
Uganda Bureau of Statistics (UBOS) attributes this to what they referred to as a squeeze in agricultural production in the east African nation, which is Africa’s largest coffee exporter