Uganda is grappling with increased inflation driven by harsh weather conditions impacting food production and rising prices. The annual inflation rate for February 2025 reached 3.7%, with fresh food prices, particularly green peppers, seeing drastic increases. As households adjust to higher food costs, government intervention may be necessary to stabilize the situation and support farmers.
Uganda is currently facing economic challenges due to harsh weather conditions affecting food production and consequently driving up prices. The Consumer Price Index (CPI) data from the Uganda Bureau of Statistics (UBOS) indicates that annual inflation reached 3.7% for February 2025, subtly rising from 3.6% in January. A significant contributor to this inflation is the rising cost of fresh food, which saw a notable increase in certain items.\n\nThe Annual Food Crops and Related Items Inflation leaped to 4.3% in February from just 0.2% in January. Notably, the prices of several staples, including tomatoes, dry beans, cooking bananas (matoke), and green peppers, have surged. Green peppers, in particular, witnessed the most significant price hike of 17.2% in February, reversing a 5.4% decline recorded in January.\n\nSamuel Echoku, the head of economic statistics at UBOS, attributed these price hikes to unfavorable weather conditions leading to poor crop yields. He stated, “The recent dry spell has affected crop yields, reducing the availability of fresh produce in markets across the country, and consequently driving up prices.” This pattern of price increases extends to other food items such as tomatoes, which climbed by 12.4%, dry beans up by 2.8%, and fresh leaf vegetables rising 11.9%.\n\nIn contrast, some staple foods displayed minimal price increases. Fresh cassava rose by 4.1%, with maize flour and rice remaining stable or even facing price decreases. Despite these fluctuations, household budgets are significantly impacted. Core inflation, which excludes food and energy, slightly decreased to 3.9% in February from 4.2% in January, highlighting food’s major role in overall inflation.\n\nThe report also revealed a decline in Annual Services Inflation from 6.3% in January to 5.4% in February, primarily due to reduced education-related costs. Similarly, Annual Energy, Fuel, and Utilities (EFU) Inflation dipped to 0.2% amid stagnant solid fuel prices. As food prices escalate, households are adjusting their budgets accordingly, and businesses are trying to manage their costs.\n\nEchoku forecasts that food prices could remain high due to continuous adverse climate conditions and supply chain disruptions. However, improved agricultural output and stabilized transportation costs may provide relief to consumers. The government is likely to consider policies to stabilize food prices, possibly offering support to farmers to counter weather effects. For the time being, consumers must prepare for ongoing fluctuations in food prices, especially for fresh produce like green peppers, which are highly susceptible to market volatility and environmental changes.\n
As Uganda faces these economic challenges, the impact of rising food prices on household spending and market dynamics continues to grow, with broader inflation trends being reshaped across the country.
In summary, Uganda’s inflation is significantly influenced by rising food prices driven by adverse weather conditions affecting crop yields. The latest CPI report highlights sharp increases in fresh food prices, particularly green peppers. With the potential for continued price fluctuations, government intervention could be necessary to stabilize the food market. Consumers are likely to experience ongoing economic adjustments as they adapt to these changing food prices.
Original Source: www.independent.co.ug
