Change in mobile money use, eases Uganda’s inflation

Uganda’s inflation for August stood at 3.5% which is the lowest inflation rate in the last 15 months, down from the 4% it recorded a month prior,

According to the Ugandan Bureau of Statistics as reported by the Ugandan newspaper, The Monitor, the reduction was partly due to the decline in mobile money (sending) charges.

The head of macroeconomics at the Bureau of Statistics, Mr. Samuel Echoku, revealed that mobile money inflation reduced from 13.4% in July to 10.8% in August

Mr. Echoku also stated that, despite the reduction, service costs remained the largest source of inflation, which decreased from 6.5% to 6.2%.

The use of mobile money is an effective means of combating expensive transfer fees but is marred by tax challenges and other similar fees.

Areas that saw an ease in inflation include passenger transport which went from 8.2% in July to 6.9% in August . Food and beverage services inflation dipped to 2.7% from 3.8%.

Additionally, energy, fuel and utilities prices also saw a decline in inflation levels going from 6.2% in July to 4.7% in August.

This was in-turn driven by the deflation of liquid energy fuels which went from 5.1% to 3.8% largely resulting from a reduction in fuel and diesel cost, and the deflation of solid fuels which went from 13.3% to 9.4% during the same period.