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Uganda’s Food Crisis Worsens As Prices Skyrocket

Uganda’s food crisis seems to be far from over.  Even the ongoing rains may not save the situation as many farmers are already counting losses, thanks to the deadly armyworms that have destroyed several farms and unstable rains in some parts of the country.

Currently, many Ugandans especially in urban areas no longer have a choice on what they will eat as prices of  ‘poor man’s’ food-posho (maize flour) are hitting through the roof.

In some areas, a kilogram of maize flour (super-which is good for posho) goes for Shs3,000, but a mini-survey by Business Focus indicates that Shs2,800 is the average price for a kilo of maize flour in Kampala and surrounding areas.

In fact, traders we talked to say that they anticipate prices to go further since maize production was low due to drought.

In comparison, at the same time last year, a kilogram of maize flour was averaging Shs2,000.

Prices for beans have also increased to shocking levels. A kilogram of beans in Kampala and surrounding towns go for an average of Shs3, 600, while a kilo of groundnuts averages Shs6, 000.

A sizeable bunch of matooke (bananas) averages Shs30, 000 in Kampala and surrounding areas.

The increased cost of living is likely to reduce on the standards of living of many Ugandans. A number of poor Ugandans living in urban areas, who used to consider posho affordable, may find themselves unable to afford it given the prevailing economic situation.

Apparently, even a few farmers making a killing from the high prices are not spared by the high commodity prices. Prices of commodities which they may wish to buy such as sugar and rice have also gone up.

A kilogram of sugar averages Shs4500 in Kampala and its environs, while a kilogram of rice goes for an average of Shs4, 000. Many schools have also hiked school fees, citing high food prices.

The current food crisis is a result of a long dry spell that hit the country almost the whole of last year and early this year.

There is panic and anxiety that rice prices could soar further after government imposed new taxes on rice importation despite the harsh drought that has marred the country.

In a letter dated December 14, 2016, Minister for Finance, Planning and Economic Development, Matia Kasaija suddenly withdrew the tax holiday that rice importers have for long been enjoying.

In reference to the East African Community Gazette Legal Notice No. EAC/33/2016, Uganda was granted a duty remission to apply the rate of 75% or $250/MT instead of 75% or $345 on imported rice.

However, on December 14 minister Kasaija wrote a letter to the minister of East African Affairs, Kirunda Kivenjinja informing him that government has withdrawn the tax remission that rice importers have been enjoying for a long time.

“Accordingly all importers will pay the same common external tariff (CET) of 75% or $345/MT on imported rice in accordance to the East African Community External Tariff (CET),” Kasaija’s letter read in part.

As a result of this food crisis, prices of food rose to 20.7% in March 2017, up from 18.8% in February, according to Uganda Bureau of Statistics (UBOS). On the other hand,   prices for fruits rose to 35.6% in March, up from 28.5% in February.

It is worth noting that food inflation contributes over 25% to Uganda’s total inflation. However, Headline inflation dropped to 6.4% in March, slightly down from 6.7% in February.

UBOS attributed the decline to the fall in prices of services such as education which dropped to 11.8%, down from 20.2%.  Annual Core inflation also declined to 4.8%, from 5.7%.

 

 

Richard Kamya
Richard is a Digital Communication Specialist and an Entrepreneur

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