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East Africa: Rising Inflation Hits Region Hard
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The Citizen (Dar es Salaam)
21 May 2008
Posted to the web 21 May 2008
Polycarp Machira
East African states have been hit hard by the current inflation caused by surging global fuel and food prices.
However, Kenya appears to have suffered the most compared to Uganda or Tanzania.
Statistics show that Tanzania's rate of inflation stands at 9.7 per cent, a 0.7 per cent increase from last month, while Uganda has a 9.5 per cent inflation rate, representing a 0.9 per cent increase during the same period.
Kenya's inflation rate stands at 26.6 per cent as of last month or a 5 per cent increase from the previous month.
State House director of communication Salva Rweyemamu told reporters in Dar es Salaam yesterday that price increases have continued to haunt many low income households in Tanzania.
The same situation pertains in the other Southern African Development Corporation (Sadc) countries including the neighbouring Malawi, he added.
He said data from the National Bureau of Statistics (NBS) show that inflation averaged 6.2 per cent between 1998 and 2006. This was mainly due to favorable global economy.
Mr Rweyemamu however, said inflation started to worsen off early this year following unfavorable trade at the global market caused by increased fuel and food prices coupled with depreciation of the US dollar value.
By January this year, he said, inflation rate in the country stood at 8.6 per cent, rising to 8.9 in February and reaching 9.0 per cent in March before hitting the 9.7 per cent mark by April.
"Increased food prices have caused fear in many countries and destabilised the world economy, with the International Monetary Fund (IMF) warning that if the trend continues, it may ruin economies of most African countries," observed Mr Rweyemamu.
He said the IMF has also warned that the inflation may interfere with Tanzania's drive on poverty eradication.
But despite the anxiety caused by the everrising food prices, the State House has expressed optimism that the situation may improve during the next crop harvest season.
"Experts foresee improved food supply that will push down food prices," Mr Rweyemamu added.
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The Government has also taken the initiative to discuss with stakeholders in the petroleum sector to prevent further increase of petroleum products prices in the country.
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