East Africa's inflation drops despite rise in cost of fuel

Tuesday March 6 2018

A market in Nakuru town, in Kenya’s Rift Valley.

A market in Nakuru town, in Kenya’s Rift Valley. East African countries have recorded falling inflation rates despite an increase in prices of fuel and utilities. PHOTO FILE | NMG 

By MARYANNE GICOBI
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East African countries have recorded falling inflation rates, with Uganda’s reaching a 38-month low, despite an increase in prices of fuel and utilities.

The Uganda Bureau of Statistics reported a 2.1 per cent inflation, from three per cent in January, the lowest rate since November of 2014, largely attributed to the drop in prices of sugar, bread and cereals.

Kenya’s inflation dropped to 4.6 per cent from 4.8 in January, despite a rise in prices of several basic food items, transport costs and cooking gas. The government temporary subsidy on maize flour, Kenya’s staple, has ended and prices have since shot up, along with other food items.

“Between January and February 2018, food and non-alcoholic drinks’ index increased by 2.2 per cent, which was higher than the 1.69 per cent recorded between December and January, due to increases in prices of some foodstuffs as a result of drought being experienced in some parts of the country,” Kenya National Bureau of Statistics (KNBS) said in a statement.

Despite the increases, KNBS said year-on-year food inflation eased to 3.83 per cent in February, from 4.71 per cent in January. Food takes up the largest share — 36 per cent — of the basket of goods that is used to calculate inflation, making it the main driver of the cost of living.

In Kenya, inflation for December was at 4.5 per cent, marking a 54-month low for the cost of living index, which last hit such lows in May 2013, at 4.05 per cent.

It had hit a five-year high of 11.7 per cent in May last year, before easing on improving crop yields that have seen food inflation fall from 20 per cent in May to only 5.8 per cent in November.

In Tanzania, latest data shows that inflation was unchanged at four per cent for December 2017 and January 2018.

In Rwanda, data from National Institute of  Statistics said the year-on-year inflation increased by 1.3 per cent in January 2018, largely due to increase cost of non-food items like housing, fuel, electricity and gas.

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