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Inflation fall likely to lure Ugandans to spend more cash

Published

4 months ago

September 1, 2024

Consumers in Uganda may be encouraged to make large purchases as inflation rates decline and commodity prices rise. According to the Bank of Uganda’s (BoU) most recent figures, headline inflation reached 3.9% by the end of June 2024, while average inflation for the fiscal year 2023–2024 was 3.2%. In July, the annual headline inflation rate was 4%.

Due to strict monetary policy measures and a rise in coffee exports, the Ugandan shilling rebounded from a record low of Ush3, 942 versus the US dollar in August 2023—a source of external inflation pressures associated with imported goods—to less than Ush3, 800 in June 2024.

Prices for common household items have decreased, which partially reflects the easing inflation pressures experienced in the second half of 2024.

For example, the price of one kilogramme of sugar is currently Ush4,000 ($1.1) in some trading centres, down from Ush4,500 ($1.2) per kilogramme that was noted at the start of the year. According to local vendors, the price of a kilogramme of rice in the suburbs of Kampala is now Ush3,000 ($0.8) instead of the Ush3,500 ($0.9) it was at the start of 2024.

Since last year, local fuel prices have stabilised at between U$5,000 ($1.3) and U$5,500 ($1.5) per litre due to significant fluctuations in the global oil market.

According to a PWC Uganda economic brief, local household consumption levels expanded by 8.2% in 2023–2024 and by 3.6% in 2022–2023. However, the combination of increased disposable income and unpredictability in the economy may cause local consumers to exercise extra caution.

“Inflation might have gone down but the economy is too hard on most of us,” Fauz Kaliisa, a forex dealer in Kampala told The EastAfrican.

“This means any savings realised at this time must be put aside for a rainy day to take care of food, school fees, and medical.”

In October 2022, Uganda’s annual headline inflation rate reached 10.7% due to rising fuel and food prices, which were brought on by consumer demand following the two-year Covid-19 lockdown phase and the reopening of key economies.

“What we are seeing is a reduction in the speed of price movements and not collapsing prices,” observed Paul Corti Lakuma, a policy research fellow at the Economic Policy Research Centre (EPRC) at Makerere University.

“Consumers are rational people and I see signs that indicate things might get better soon for them.”

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Moroccan annual inflation rises to 0.8% in November

Published

4 days ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

5 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”