UBOS today released its monthly market report indicating that the annual headline inflation rate for the year ending January 2012 dropped to 25.7% from 27.0% recorded for the year ended December 2011.

Releasing the report in Kampala, the director macro economics statistics, Dr. Mukiza Chris states that food inflation decreased to 27.3% in January 2012 from 34.6% in December 2011 with non food prices inflation rising to 24.2% in January 2012.

UBOS Sya that the reduction on fuel prices, as well prices of food stuffs contributed greatly to the drop inflation.

Dr. Mukiza says that Arua registered the highest annual headline inflation rate of 39.3% compared to40.7% in December followed by Mbale and Kampala standing at 26.1% from 24.7% in December due to high income.

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1.     Two-thirds of African people derive their income from agriculture and spend between 50 and 80% of their income on food. These figures show the importance of agriculture on the continent.

2.     Food insecurity remains the biggest challenge in developing countries and African countries in particular. The measures to be taken by G20 countries may have a direct impact on the daily lives of people in Africa hence their importance for us.

3.     Food security is a matter of sovereignty and a national security challenge. That is why any actions in this regard should be discussed with Governments and regional organizations. The specific mechanisms in a good number of countries or implemented by specialized regional institutions should be at the heart of deliberations with our partners when working on systems to mitigate the effects of food insecurity. This is especially true when it comes to the sensitive issue of managing strategic food reserves.

The role of the G20

4.     Considering that the G20 countries account for more than 85% of global production and food exports, one can easily understand the huge responsibility these countries have when it comes to implementing measures that contribute to the well-being of the general community .We welcome their efforts. Their influence in the global food balance is paramount and we encourage them to embark on ambitious goals, such as restoring production and stock levels to limit tensions on the market. This may yield benefits for the community as a whole.

The African perspective

5.     African countries are not looking forward to depending continuously on external supplies that will remain uncertain in prices and quantities. Actually, our ultimate and unquestionable ambition is to develop our agriculture and markets. In this regard, NEPAD is working towards this goal through its Comprehensive African Agriculture Development Program (CAADP). In our opinion, we must rely on our own production to meet our food needs. In fact, importation is not Africa’s goal .

6.    All developed and emerging countries started out by conquering their domestic markets before taking advantage of production gains to end up exporting. This choice to focus on domestic demand was warranted by an enabling and stable economic environment, enhanced for instance by access to credit facilities that were mostly on concessional terms, and by bright and predictable revenue prospects due to regulated prices or deficiency payments. This is only what we are asking for our producers: let us apply the recipes accountable for success in the G20 countries.

7.    Developments at the WTO equally remind us that little has actually changed regarding international negotiations on agriculture over the last 10 years. The failure of Doha is an opportunity for us to bounce back positively and in a pragmatic manner to make progress with issues of importance to all developing countries, and African countries in particular. Hence, efforts should be made to conclude early agreements (harvest) in matters concerning vulnerable countries. This should apply also to certain export products that play a central role in the fight against poverty in some parts of Africa. Our countries are in need of stability; that is why the arrangements made since 2004 in the farming agreement need to give birth to concrete measures regarding particularly special safeguard mechanisms or subsidies for specific products.

8.    We are calling for pragmatism in providing support to African farmers by facilitating the purchase of fertilizers through smart subsidies where the market is not running smoothly, for fertilizers to be made available at reasonable prices. We support the idea of an innovative mechanism to finance access to farming inputs and would like the private sector to be involved as a stakeholder. On our part, we are working in this direction and we encourage any initiatives along these lines from our G20 partners.

9.    This gives us the opportunity to recall that the mandate received by the G20 at Seoul envisaged an examination of the issue of increasing the share of supplies on the market for small producers and expanding their access to markets. We hope the G20 will address this issue that involves virtually all Africa’s producers and accounts for the majority of the volumes produced.

10.   Africa has close cooperation and dialogue with the international community and this is improving by the day. Our countries are attached to multilateralism. The reform of FAO that Africa heavily contributed to, mobilized the energies of each and every one of us. We should be confident that this reform will bear fruit. Therefore, in keeping with the mandates conferred on it, we need to emphasize its central role for the benefit of all in the G20 proposals with regard to food markets and food security.

11.  The decision taken by the AU in 2010 at the Kampala summit to set up a development agency under its supervision, namely the NEPAD agency, is evidence that Africans are increasingly equipping themselves with the means to build a common destiny. This year, NEPAD will be 10 years old. It is sustained by facilitating major changes in the different countries working towards their own development. This renewed commitment is certain.  State revenues that are now the main source of development financing account for more than 80% of overall sources of financing in Africa. With growth rates near 7% before the financial crisis, Africa is showing it can become a power to be reckoned with.

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Food stuffs in Nakasero Market Kampala Uganda

The price of cassava millet, Banana, potatoes, beans and rice has continued to rise in most of the west Nile district.

A kilogram of beans is selling at 3500 from 2500 shillings a month ago. The cost of groundnuts has gone to 4000. In Jupara market in Vura sub-county the price of rice has shoot up from 2000-2600 shillings while the cost of maize flour has increased to 2500 per kg.

The soaring food prices have been attributed to the prolonged drought.

Martha a trader in Arua market says the prices of crops such as cassava and beans will only come down if farmers take time to utilize the planting season consumers on the other hand are concerned that prices continue to soar while their incomes are not increasing.

Vivian Bayowa of Dadamo sub-county in Arua district says government must consider increasing salaries to the march with rising food prices.

Ultimate Media

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This comes after opposition parties organized a demonstration against high prices of fuel and essential commodities. The walk to work protest under their umbrella Action for Change that has lasted for one month demanding government intervention into the cause during his 4^th inauguration week the president reviled his plans to tackle the issue of skyrocketing price of fuel and other commodity  prices.

He promised to hold talks with the government of southern Sudan to seek modalities of importing fuel because it is cheaper there.

Museveni said his government would consider purchasing fuel in bulky and seal its reserves to avoid crisis in times of scarcity.

The government though its financial ministry plans to revive food storage granaries and encourage irrigation farming.

Residents have asked the president to fulfill his pledge in solving the food crisis which they say has sparked violent demonstrations in the country.

By Mugisa Isaac Mathias

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