Ugandans are facing an ongoing challenge with the cost of living, as prices for essential goods and services continue to rise. This issue has been persistent for several months and is now requiring consumers to adapt to the situation.
The rising cost of living has become a source of frustration for many Ugandans, particularly as food and fuel prices remain high in an economy where returns on investment 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 was primarily driven by higher inflation in food crops and related items, which rose by 3.8 percent in September, compared to a 3.6 percent rise in August.
The price increases in vegetables, tubers, plantains, cooking bananas, and pulses have contributed to this inflation. Economic experts suggest that heavy rains have hindered the distribution of food crops across the country, resulting in higher prices due to disrupted supply chains.
This situation coincides with the Uganda National Meteorological Authority’s prediction of a second major rainfall season, driven by El-Niño conditions in the central and eastern tropical Pacific Ocean. The impact of this weather pattern is affecting food production, particularly in regions like Masaka and Mbale.
Uganda’s agriculture sector has experienced slow growth, with a significant decline from 9.3 percent in the fourth quarter of 2022 to 2.1 percent in the same quarter of 2022/2023. As a result, local markets have increasingly relied on food imports from neighboring countries like Kenya and Tanzania.
Consumers are feeling the effects of these rising prices, which are impacting their standards of living. Economists in Uganda acknowledge that the government cannot provide an immediate solution to the crisis, as addressing issues like unstable food production requires substantial infrastructure investments.
The most affected consumers in terms of price changes in September were those purchasing mangoes, Irish and sweet potatoes, cooking bananas, and vegetables. Additionally, the prices of detergent powder, milk, and shoe polish have also increased.
The reopening of schools has driven up demand for food items like maize, rice, and beans, despite low domestic production and government restrictions on agro-importation. To address the situation, Uganda needs to boost its food production and reduce its reliance on neighboring countries.
Transportation costs have also contributed to the cost of living crisis, with a 0.6 percent increase between August and September due to higher gasoline, diesel, and kerosene prices. These energy price hikes are influenced by global oil price fluctuations and have a ripple effect on food prices through increased logistic costs.
Uganda’s Energy Ministry is working with neighboring countries to ensure a steady fuel supply despite the high prices. In the medium term, Uganda expects the liquid fuel crisis to ease, as it imports a substantial amount of fuel daily.
Construction inflation has also been a factor, with input costs for specialized construction activities increasing. This includes electrical, plumbing, and finishing activities. While some construction-related costs have risen, others have shown a decrease.