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The East African : Oct 24th 2015
The EastAfrican BUSINESS OCTOBER 24-30,2015 COST OF LIVING Inflation rises with food prices, stays high in EA A bumpe≥ ha≥vest in August helped Tanzania and Bu≥undi ≥eco≥d a ma≥ginal d≥op in thei≥ inflation By ALLAN OLINGO The EastAfrican have pushed up the cost of living in the region. Save for Tanzania and Burundi, EAC states have all recorded a rise in inflation in September. Mid last week, Uganda’s central R bank raised its benchmark lending rate from 16 per cent to 17 per cent in a bid to ease inflationary pressures. Bank of Uganda Governor Prof Emmanuel Tumusiime-Mutebile, said that the bank’s decision to increase the CBR by 5 per cent since April has dampened inflationary pressures. “We have increased the CBR to ensure that in the medium term, the inflation edges towards the BoU policy target of 5 per cent,” Prof Mutebile said. Uganda saw a rise in its infla- tion to 7.2 per cent in September, up from 6.8 per cent in August. According to the Uganda Bureau of Statistics (UBOS), the increase in inflation was largely attributed to the annual food crops inflation that rose to 10.2 per cent in September ising food prices and the effects of exchange rate depreciation from 1.8 per cent a month earlier. “Food inflation, which includes food crops and processed foods, rose by 5.9 per cent during the month, driven mostly by the prices of staple food,” said Ben Mungyereza, the executive director of UBOS. Rwanda has also seen a rise in its inflation rate from 3 per cent in August to 3.7 per cent last month. The increase was a result of increases in the prices of food, housing, electricity and transport costs. “The urban inflation was fueled by a 5.6 per cent rise in prices of food and non-alcoholic beverages, a 10 per cent increase in the prices of alcoholic beverages, tobacco and narcotics and a 5.7 per cent increase in the cost of housing, water, electricity, gas and other fuels,” Rwanda’s National Institute of Statistics said. Tanzania and Burundi saw a marginal drop in their cost of living thanks to a fall in the food “Our inflation target is 5 per cent and there is scope for it to fall below that.” Dr Patrick Njoroge, Governor, Central Bank of Kenya 37 RATES COMPARISON Uganda’s inflation has risen from 6.8 per cent in August to 7.2 per cent in September, largely due to annual food crops inflation. Rwanda’s inflation rate from 3 per cent in August to 3.7 per cent in September on the back of increase in prices of food, housing, electricity and transport costs. Rises in food prices and fuel costs pushed Kenya’s inflation from 5.84 per cent in August to 5.97 per cent in September. Tanzania and Burundi saw a marginal drop in inflation, thanks to the August harvests in both countries. Burundi’s rate fell by 0.1 percentage points to 4.2 per cent while Tanzania dropped by 0.3 percentage points to 6.1 per cent in September. National Bureau of Statistics (NBS) Director Ephraim Kwesigabo said inflation rose 0.1 per cent month-onmonth in September from 0.02 per cent in August. “The country saw a successful har- vest in August that slowed down the food price rises,” Mr Kwesigabo said. Kenya recorded a marginal rise in inflation to 5.97 per cent in September, from 5.84 per cent a month earlier, driven by a rise in food prices and fuel costs. Central Bank Governor Dr Patrick Prices of food have risen in the region, raising inflation rate. Picture: File prices due to the August harvests in both countries. Burundi’s inflation dipped by 0.1 per cent from 4.2 per cent in August. Burundi’s Institute of Economic Studies and Statistics said the drop was because of improved production of some crops, which slowed food price rises in local markets. The outlook for the country how- ever remains bleak as several donors have pulled out funding, which will put pressure on the country’s budget. The political unrest since April has increased costs of essential commodities such as food, transportation and energy. The statistics bureau said that the drop in maize and beans prices, one of the main staple crops, slowed food price inflation to 3.8 per cent in September, from 4.6 per cent a month earlier. Tanzania saw a 0.3 percentage points dip in its inflation to 6.1 per cent in September. Njoroge however feels confident that the inflation levels are within the bank’s band. “Our inflation target is 5 per cent and there is scope for it to fall below that,” Dr Njoroge said. September saw a marginal drop in energy prices, water and rent helping slow down the impact of higher food prices. Analyst at AIB Capital in a re- search note predict that the inflation rate will stabilise between 6.03 per cent and 6.18 per cent for the next three months. Uganda eyes local, expo≥t beef ma≥ket with $11m investment By PHILOMENA MATSIKO Special Correspondent Egyptian firm Egypt-Uganda Food Security has invested $11 million in a modern abattoir, located 32km north of Kampala near Bombo town in Luwero district, central Uganda. The abattoir will process and package meat — mainly beef — both local and export markets. The Egypt-Uganda Food Security abattoir has the ability to slaughter 1,000 cows daily and can hold up to 5,000 animals waiting to be slaughtered. It also has coolers, skinning equipment and a processing plant as part of the standard equipment demanded by Kampala City Council Authority and the Uganda National Bureau of Standards. With more than 17 million heads of cattle alone, Uganda has a big population of livestock, but as a market, it has a shortfall of 900,000 tonnes a year for both processed and unprocessed beef products, data from the Uganda Meat Producers Co-operative Union Ltd shows. “There is an export potential to the East African Community. Uganda’s location will also make it easy to process, package and distribute our products in regional export rent beef production system — largely subsistence and primarily of slow maturing indigenous breeds, with a very slow transition to commercial production. According to the Uganda With more than 17 million heads of cattle , Uganda has a big population of livestock, but as a market, it has a shortfall of 900,000 tonnes a year for beef products. Picture: Morgan Mbabazi markets,” said Hassan Fath-allah, the proprietor of the abattoir. Industry players say demand is grow- ing ahead of supply; in 2014 -2015, a total of 220,000 to 230,000 tonnes of beef was produced, a jump from 191,280 tonnes and in 2012, and 107,000 tonnes in 2008. Supply is severely constrained by the cur- Bureau of Statistics, the population of cattle today is over 17 million — up from 11.4 million registered in 2008 when UBOS conducted a livestock census. In the same year, Uganda also had 12.5 million goats, 3.4 million sheep, 3.2 million pigs and 37.4 million heads of poultry. There are only two meat processing companies with recognisable standards in the country, namely, Qual- ity Fresh Cuts, and Rosa. These have been in production for over eight years but cannot meet the growing demand that is a result of population growth rate. Uganda imports processed meat products from Kenya, although this has caused trade disputes, that recently prompted the intervention of Presidents Yoweri Museveni and Uhuru Kenyatta. “With the diversity of the products it is in- tended for and structured to produce, EgyptUganda Food Security expects to contribute towards the bridging of the gap between the supply and demand of beef and its by-products in Uganda,” Mr Fath-allah said The old players in the sector have wit- nessed a number of shifts in the trends of the demand and supply of these products. For instance, Quality/Fresh Cuts, a prominent meat processing firm in Kampala, produces over 100 tonnes of meat, 60 per cent of which is for the local market, and the remainder for export. According to Uganda Meat Producers Co- operative Union Ltd chief executive Dr Joshua Waiswa, most abattoirs in Uganda are substandard, with limited hygiene measures, while in the countryside, slaughter slabs are used as abattoirs. Such beef fails handling and packaging standards for high end consumers. “It’s not true that the factories have failed to meet the demand. Most Ugandans prefer freshly cut meat bought fresh after slaughter. Consumption of processed meat products is still a preserve of the high-end market in Uganda,” he added.
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