Figures just released by the Uganda Bureau of Statistics, in conjunction with the Bank of Uganda put the annual inflation trend for the month of July 2011 now at 18.7 percent, bringing it to an 18 year high with no end in sight.
Inflation even in Kenya has now gone above 15 percent but in Uganda it is also combined with the lowest level of the value of the Uganda Shilling, which has last weekend fallen to below the 2.800 mark versus the US Dollar. Across the region have the effects of high international fuel prices driven inflation and drought has affected harvests to the point of having the UN declare a famine in parts of the Horn of Africa and the Eastern African region. This spells badly for already hard hit consumers, as increased fuel prices translate instantly into even higher food prices, a crucial element in the monthly spending budget by ordinary people.
Political attempts to belittle the problem have only fuelled anger and given the leading opposition figures fresh impetus, who have already vowed to resume their ‘walk to work’ protests which a few months ago caused major disruption to life in and around Kampala as well as key municipal centres across the country. Said a leading safari operator when questioned on the impact of the inflation on his business: ‘We quote in US Dollars and Euros, not in Uganda Shillings. So our rates are stable in foreign currency but we are still faced with all local cost escalating month by month. Fuel, food inputs, spare parts have all increased so whatever we get more for our dollars by higher exchange rates is also being consumed by higher prices. New equipment, new vehicles for instance, need to be paid in hard currency. We are lucky to earn hard currency but for others they need to find the shillings to make up for the gap now.
But our main problem for Uganda tourism is marketing. Our neighbours are doing more, spending more and are united between private and public sector. In Kenya especially the sector associations are drivers of dialogue and development, but here we lack that sort of structure. In Tanzania the hotel association is issue driven, here they go for owners individual objectives and interests. In Uganda we need to come together as a whole group and give government our principle demands and tell them what it will cost them to propel tourism ahead. Our sector has a great deal of potential but for 20 years we have not fully exploited it. That should change now that we have our own ministry again. But let me also say that political events have not helped and if opposition wants to walk again the international TV stations will show our own riots and not those in London. That puts potential visitors off and travel warnings then also play a part. Inflation here in Uganda combines with power outages, high cost of production because of long access from the sea ports and people find it hard to make ends meet. Government has not come forward to show positive action and compassion, they have confrontations with traders, oil companies and now we hear a section of Mabira Forest is being given away again. I think we are heading for some very tough times now’