In an effort to boost private sector borrowing, the Bank of Uganda (BoU) has reduced its Central Bank Rate (CBR) by 1 percentage point to 10 percent in June 2017, a Monetary Policy Statement issued by the bank’s Governor, Professor Emmanuel Tumusiime-Mutebile, reads.

Mutebile says that the further cut in the CBR should encourage commercial banks to cut their prime rating rates downward to encourage private borrowing, noting that the average lending rates have been declining to 20.5 percent in April 2017 from a peak of 25.2 percent in February 2016, a cumulative decline of 4.7 percentage points.

Stanbic Bank is the only one so far that has cut its prime lending rate to 19%, as the lowest. Other banks are reluctant to reach this level.

Mutebile also confirmed the annual inflation as measured by the change in consumer price index (CPI) increased to 7.2 percent in May 2017, from 6.8 percent in April 2017, largely driven by a sharp increase in food crops and higher energy prices.

Food crops inflation rose to 23.1 percent from 21.6 percent in April 2017, largely on account of the impact of adverse weather conditions on food crop production, Mutebile states in the press release.

The Governor says the relative stability of the exchange rate and subdued domestic demand have contributed to the dampening of core inflationary pressures over the last 12 months, adding that the economy continues to grow at a moderate pace.

According to the latest gross domestic product (GDP) estimates released by Uganda Bureau of Statistics (UBOS), the economy is estimated to grow by 3.9 percent in the Financial Year 2016/17 compared to a growth rate of 4.7 percent in the Financial Year 2015/16.

The slowdown is mainly due to the drought that affected agricultural production, coupled with slow implementation of public investment projects and weak private sector credit growth.

Mutebile says that economic growth is projected to pick up to 5.0 percent in Financial Year 2017/18; supported by improved efficiency and effectiveness in implementation of public investments; higher Foreign Direct Investments, particularly in the oil sector; and recovery in private sector credit growth, as lending interest rates continue declining.

Growth in the agricultural sector is also projected to improve, as normal weather conditions return.

According to Mutebile, the supply side shock that caused inflation to edge-up in the last six months is temporary and is expected to wane in the first quarter of 2017/18. Moderation of food prices is expected over the near to medium-term, he adds.

In addition, Mutebile says, the favourable inflation outlook is to be driven by downward revisions to international oil prices that should lower fuel prices in Uganda as well

“In line with the previous forecast, inflation is forecast to stabilise around the target of 5 percent in 12 months,” he says.

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Uganda Breweries Limited (UBL) has announced a special promotional offer for Ngule Lager in celebration of the Kabaka’s 24^th coronation anniversary, on July 31.

Dubbed ‘Omutanda Agabudde’, the offer will see the beer sold at a special price of Shs1,500. Ngule is a Luganda word that means ‘crown’ or ‘reward’.

The announcement was made at a press conference at Bulange addressed by the Buganda Kingdom Deputy Minister of Finance, Owek. Mulema Mukasa and Uganda Breweries Marketing Director, Juliana Kagwa.

Ngule, which was launched in January 2016, is the official kingdom beer produced under a partnership between Uganda Breweries and the Buganda Kingdom. This partnership consists of a revenue sharing agreement that is beneficial to both entities.

“In celebration of His Majesty’s coronation anniversary, we today announce a special promotional offer of Shs1, 500 on Ngule as a reward to his loyal subjects. Our brands are made to be part of celebratory occasions and we would like to join the people of Buganda to commemorate the Kabaka’s coronation and celebrate this joyous occasion,” said Kagwa.

This year’s coronation anniversary is being held under the theme ‘Useful utilization of land for the upliftment of the wellbeing of the people of Buganda’.

In his remarks, Buganda’s Deputy Minister of Finance, Mulema Mukasa said the promotional offer was a reward to Kabaka’s loyal subjects as they celebrate his coronation.

“The Kingdom of Buganda is essentially about promotion and sustenance of culture and heritage. The Kabaka’s coronation is one such celebration. It is only fitting that our people celebrate with Ngule, the official Kingdom beer,” he said.

He further thanked the people of Buganda for heeding the call to grow cassava from which Ngule is brewed.

“In the 2016/17 budget, the kingdom set aside UGX 500 million to start a cassava nursery in all the 18 counties and UGX 3 billion to procure coffee, matooke, and cassava seedlings. This was done to enable farmers meet the demand from UBL to brew Ngule. This support has been channeled through Majestic Brands and Buganda Cultural and Development Foundation (BUCADEF),” he added.

In the previous financial year, the Kingdom earned royalties worth UGX.515 million from Ngule between January and June 2016. This was handed over to Katikkiro Charles Peter Mayiga.

The beer is made from local ingredients; cassava and sorghum, which are exclusively sourced from the kingdom.

“This beer has contributed to socio-economic growth of the Kingdom. Through the local sourcing of agricultural inputs like cassava to brew the beer, Ngule has contributed to the uplifting of livelihoods of His Majesty’s subjects. Buganda Kingdom has a 5-year strategic plan that focuses on leveraging all the kingdom’s resources to lift His Majesty’s people out of poverty and the partnership with Uganda Breweries to produce Ngule beer, is one of those projects,” Katikkiro added.

Ngule is one of the most affordable beers on the market, a deliberate decision by UBL to get more Ugandans to consume formal beer, thus moving them away from illegitimate, poor quality and potentially hazardous alcohol.

Owekitibwa Mulema Mukasa further said the royalties that the Kingdom was earning from the commercial venture with UBL were being re-invested to develop key sectors in Buganda such as health, education and sanitation.

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The price of groundnuts has dropped in markets like Lira and Owino but most noticeably in Kalerwe market where it eased down by shs500 to retail at shs 5,500, a kilogram. A kilogram further dropped shs250 for wholesalers to buy at shs 4,750, the latest market analysis report released for this week shows.

Traders attributed the decrease to the increased supply of the commodity from markets such as Kaliro in Busoga region that grows considerable amounts of the legume.

Simsim, mainly grown in the north of the country, had its prices drop by shs1, 000 and shs850 for retail and wholesale respectively, as other commodities such as rice (Kayiso), cow peas, fresh cassava, beans, soya beans, among others also had their prices come down.

However, commodities such as sorghum flour and grain, maize flour and millet grain all had price increases due to the increased demand for the commodities. Beef and super rice maintained a constant price due to steady supplies to markets.

Matooke prices on average dropped by shs2,350 on retail and shs2,700 on wholesale and traded at shs23,000 and shs20,650 for retail and wholesale, respectively. Of recent there has been a steady supply of matooke from western region where it is most grown.

Meanwhile the report shows that the average fuel prices across all regions of the country reached shs3,350, shs2600 and shs3550 for diesel, kerosene and petrol respectively.

The eastern region, the nearest to the Kenyan fuel suppliers, had the lowest average fuel prices of shs3000 and shs 3450 for diesel and petrol respectively.

Upcountry, the price of processed honey dropped across markets such as Kabale and Katuna by up to shs1,500 and shs1,000 for retailers and wholesalers respectively trading a litre at shs16,500 for retail and shs14,000 for wholesale.

Traders attributed the drop in prices to a decrease in demand of the honey by local consumers. Despite its benefits most Ugandans don’t consume honey putting the blame on high prices. Suppliers have to find market in neighbouring countries.

The central and western regions had the highest average prices of petrol selling at shs3650 and shs3600 respectively.

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