Drought, Taxes Blamed For Soaring Inflation


capsule geneva;”>see sans-serif; background-position: initial initial; background-repeat: initial initial;”>The overall monthly food crops inflation has risen to 0.0 percent up from -6.0 recorded in the previous month, while the annual food inflation has now come to 2.8 percent compared to the previous 1.4 percent.

This has ultimately sent up the annual headline inflation rates, where Kampala High Income (KHI) topped the annual inflation with 7.2 percent up from 6.6 percent in June 2013.

Mbarara registered the second highest rates of 6.3 percent, compared to previous 5.7 percent, while Arua registered the least inflation at -4.9 percent, from -5.4 percent.

At a press briefing in Kampala on Wednesday, UBOS Senior Statistician, Sam Kaisiromwe said the most affected food stuffs include matooke, sweet potatoes, vegetables, fruits, milk and sugar among others.

“All these price rises can be attributed to low supply on the market which came as a result of the long dry spell registered in most centers especially in central and western Uganda,” he said.

About 530,000 people last week were reported to be facing a risk of starvation at the hands of this natural disaster especially in the northern parts of the country.

In western Uganda hundreds of hectares of plantations of both food and cash crops in Kasese, Rubirizi and Kamwenge districts were reportedly destroyed by the drought leaving residents worried of a looming famine.

The farmers had since called on government of Uganda to fund irrigation schemes in regions to help prevent farmers from making loses.

Kaisiromwe however noted that the recently read 2012/13 National Budget was partly to blame on the skyrocketing prices of food stuffs, giving an example of the VAT introduced on alcoholic drinks and piped water.

While these taxes are yet to come into effect, he noted that traders just rush to hike the process upon announcement of taxes on commodities by the Finance Minister.

“There is this growing tendency of a fixed mindset among Ugandan traders that every national budget comes with a tax increase,” he said.

“So they don’t even wait to hear what type of tax has been introduced on what commodity, they just rush to rise prices without a sound reason based on data,” Kaisirwome added.

Unto the public, Kaisirwome advised that: “They need to realize that the moment the budget is read, it is not effective until it has been passed by parliament.”


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