Food prices drive inflation as harsh weather hits Uganda

Ugandans are grappling with the effects of extreme weather, which is not only causing discomfort but also straining the economy as food prices surge, fueling inflationary pressures. The latest Consumer Price Index (CPI) report from the Uganda Bureau of Statistics (UBOS) reveals that annual inflation for the year ending February 2025 rose to 3.7%, up from 3.6% in January. While the overall inflation rate remains relatively stable, food prices have been a major driver of the increase, particularly fresh produce. Sharp rise in food inflation The report highlights a significant jump in food crops and related items inflation, which surged from 0.2% in January to 4.3% in February. The rise is attributed to increased prices of key food items, including tomatoes, dry beans, cooking bananas (matoke), and green peppers. Among the most affected, green pepper prices skyrocketed by 17.2% in February, reversing a 5.4% decline recorded in January. According to Samuel Echoku, UBOS head of economic statistics, this increase is largely due to unfavourable weather conditions. “The recent dry spell has affected crop yields, reducing the availability of fresh produce in markets across the country, and consequently driving up prices,” he explained. Other notable price increases include: Tomatoes: +12.4% in February (up from +4.7% in January) Dry beans: +2.8% (previously +0.4%) Fresh leafy vegetables: +11.9% (up from +8.9%) Fresh cassava: +4.1% (compared to +2.5% in January) While staples like maize flour and rice have remained relatively stable, rising fresh food prices are straining household budgets, forcing consumers to adjust their spending habits. Other inflation trends Beyond food inflation, the report shows that: Core inflation (excluding food and energy) slightly declined from 4.2% in January to 3.9% in February, indicating that rising food prices are the main inflationary pressure. Services inflation (education, transport, lodging) dropped from 6.3% to 5.4%, driven by reduced education-related costs. Energy, fuel, and utilities (EFU) inflation fell slightly to 0.2%, down from 0.3%, mainly due to declining firewood and charcoal prices, despite small increases in fuel and electricity. Output image Impact on households and businesses With food prices continuing to rise, many Ugandan households are making adjustments—opting for cheaper alternatives where possible. Businesses, especially in the hospitality industry, are struggling to absorb increased costs without significantly raising prices. Echoku warns that food prices could remain high in the coming months due to persistent climate challenges and supply chain disruptions. However, relief could come if agricultural output improves and transport costs stabilize. Government response To mitigate rising food costs, the government is expected to implement policies to support farmers through subsidies and improved irrigation systems. These measures aim to cushion the agricultural sector against harsh weather conditions and stabilize food supplies. For now, consumers should brace for continued price fluctuations, particularly in fresh produce like green peppers, tomatoes, and leafy vegetables, which are highly sensitive to weather patterns and supply chain disruptions. As Uganda navigates these economic challenges, the ripple effects of food inflation are reshaping household spending, business operations, and broader market trends.