Ugandans are facing ongoing difficulties as the cost of living continues to rise. This situation has worsened in recent months due to elevated food and fuel prices in an economy where investment returns have remained stagnant.
According to data from the Uganda Bureau of Statistics (Ubos), the cost of living increased by 0.7 percent in September, up from the 0.6 percent reported in August. This increase is primarily attributed to higher prices for food crops and related items, which saw a 3.8 percent rise in September compared to a 3.6 percent increase in August. These items include vegetables, tubers, plantains, cooking bananas, and pulses.
The heavy rains in the country have played a role in driving up prices. They have disrupted the distribution of food crops across Uganda by rendering some roads impassable. As a result, the supply chain has broken, leading to increased prices for vegetables and other food items.
The Uganda National Meteorological Authority (UNMA) forecasts continued heavy rainfall in most parts of the country due to El-Niño conditions in the central and eastern tropical Pacific Ocean. This weather pattern is expected to persist, affecting agriculture and food production.
As a consequence, the agriculture sector has experienced slow growth, dropping from 9.3 percent in the fourth quarter of 2022 to 2.1 percent in the same quarter of 2022/2023. This decline has prompted local markets to import food staples from neighboring countries, such as Kenya and Tanzania, to meet demand.
The rising cost of living is impacting consumers, particularly in terms of food and essential items. Some goods, including detergent powder, milk, and shoe polish, have also seen price increases.
The reopening of schools has heightened demand for food items like maize, rice, and beans, despite low domestic production and government restrictions on agro-importation.
Transportation costs have also risen, with a 0.6 percent increase between August and September, largely driven by higher gasoline, diesel, and kerosene prices. The surge in liquid fuel prices is partly due to global oil price increases, which have affected logistics costs and, in turn, food prices.
Uganda’s Ministry of Energy is working with neighboring countries like Kenya and Tanzania to ensure a continuous supply of fuel, despite high prices driven by global factors.
While Uganda anticipates that the liquid fuel crisis will eventually ease, the situation calls for attention to boost food production and stabilize prices. The country’s focus on grain exports has led to increased dependence on imported staples, contributing to higher costs due to transportation expenses.
Additionally, construction inflation remains a concern, impacting various sectors of the economy. The construction sector’s input costs have fluctuated, affecting specialized construction activities such as electrical, plumbing, and finishing a house.