Ugandans battle soaring inflation

Food-grain vendors at a market in Kampala

Like most of the mothers in her ramshackle neighbourhood, Rose Awino used to dread one day a month more than any other -– the day the $20 rent was due on her family’s cramped one-room home.
But as prices in Uganda have soared on everything from food to fuel, Awino says it is now not only the monthly visit from her landlord she fears, but also the twice-weekly shopping trip to the local market.
Protests have rocked Kampala since April when opposition chief Kizza Besigye launched demonstrations against high living costs, sparking a violent police crackdown that killed at least 10 people.
Besigye is now under house arrest.
“Everything here has become so expensive, and life is getting more difficult all the time,” says 23-year old Awino, who lives in the sprawling Konge district on the edge of Uganda’s capital.
Uganda’s overall inflation last month rose to over 30 percent, its highest level in almost two decades. In the same month, year-on-year inflation on food topped 45 percent.
“This has led to a steep rise in the cost of essential goods,” said Frederick Golooba-Mutebi, a political scientist at Kampala’s Makerere University.
“That means that the standard of living for many Ugandans has gone down, especially for the poorer people in society,” he added.
Ordinary Ugandans are struggling to cope with the situation. Awino says she used to sell tomatoes and onions to local housewives from a small vegetable stall but, as prices rose, customers dried up.
Now her family struggles to survive on the approximately 40 dollars she earns per month as a part-time cleaner – half of which goes to rent.
The street protests were fuelled in part by perceptions that the ruling elite squandered valuable resources on securing re-election in February rather than tackling inflation.
“The government has failed to intervene,” Golooba-Mutebi said. “They have refused to cut tariffs on petrol, diesel and other essential commodities and this has led to public resentment.”

Traders selling fish at one of Kampala’s main markets

But protests have since petered out as rights groups say the government has adopted increasingly repressive tactics, including placing opposition leaders under house arrest and charging critics with treason.
The government says there is little it can do to tackle inflation, which it blames on external factors like high oil prices and increased demand for food from Uganda’s drought-stricken regional neighbours.
“Obviously the government is right, that over the past few years there has been instability for worldwide economies, and that has affected Uganda,” Stephen Biraahwa, the ruling party chairman of parliament’s National Economy committee, told AFP.
“But still we need to do more coming up with inward looking policies to address consumption and try and boost production,” he added.
The country’s central bank recently raised interest rates to shore up the weakening local currency, the Ugandan shilling, after it hit its all time lowest value against the US dollar late September.
But while economists welcomed the move, they said it was unlikely to impact on consumer prices any time soon.
“There is a lag effect in any monetary policy, so it takes three months, six months, maybe a year… said Grace Makako, head of financial markets at Standard Chartered bank in Uganda, warning of “tough times ahead in 2012.”
As for Awino, she doesn’t know how she will continue to support her family if things do not change soon.
“I do not know what to do,” she says, as she chops a small pile of tomatoes for the next meagre meal. “And soon it will be time to pay school fees as well… I don’t know if I can afford it.”

AFP