SHILLING PLUNGES TO NEW LOWS
Last Friday saw the value of the Uganda Shilling drop to new lows, when demand for the US Dollar soared and previous interventions by the Bank of Uganda evaporated with little visible impact to stem the tide for more than a day or two. Trading in the 2.820 to 2.840 range on Friday, the continuous slide of the value of the local currency is causing growing concern amongst economists, as the impact on the cost of crucial imported ingredients and general goods, especially on oil and fuel products is feared to give inflation a further boost. Already running at nearly 19 percent, the highest in the region, the latest loss of value will drive the cost of transport, and the overall cost of doing business in Uganda further up, while consumers are faced with having to dig yet deeper into their pockets to meet their daily needs. The price of a litre of petrol is now inching up towards the 4.000 UShs level while the cost of diesel is not far behind, but crucially for large sections of the population the cost of kerosene has rocketed too, as has the cost of cooking gas.
While tourist visitors get record returns for their hard currency, helping them to offset the rise in the cost of for instance a local meal, drinks and souvenir sales, this has not reflected in a parallel growth of tourist arrivals as yet, although the local tourism fraternity has hopes for an increase in arrivals with the imminent start of daily flights by Qatar Airways between Doha and Entebbe.
Both Kenya and Tanzania also suffer from double digit inflation figures while notably Rwanda remains firmly in the single digit range, a result of arguably more conscious political decisions on economic policies. No details are available from Burundi.
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