Bleak outlook as weatherman issues rainfall warning

September 9, 2016 in Business, Land & Agriculture by Editor

KAMPALA, SEPTEMBER 8 – The Ugandan economy is likely to slide further into suspended animation as the weatherman predicts weak second season rains related to the La Nina weather phenomenon.

That is likely to result in a spike in inflation on the back of poor crop performance. Releasing the weather forecast for September throughout December 2016 with an 80 percent probability, Fred Luboyera the Executive Director at the Uganda National Meteorological Authority said the country was likely to witness a weak second rainfall season as a result of La Nina conditions over the eastern pacific ocean that are predicted to persist through the remainder of 2016 and early months of 2017.

“Because of the expected La Nina period, most parts of Uganda will receive suppressed rainfall and this will be a negative phase for the economy as rainfall is a catalyst for most of the country’s economic activity. Socio-economic activities will be stressed because of the reduction in water levels, shortage of pastures, human and animal disease outbreaks, food insecurity leading poor nutrition and a possibility of an outbreak of diseases related to dry conditions,” Luboyera said.

He says from the above predication, the agricultural and food security sector needs to plant early maturing crops such as beans, upland rice and drought resistant varieties like non-cooking bananas, drought tolerant cassava and sweet potatoes as well as diversifying livelihood options for easy adaption.

Headline inflation had slumped to 4.9 percent in July; in line with the Bank of Uganda’s target of 5 percent but with food accounting for 29percent of Uganda’s inflation basket, weak food crop performance is likely to see that rise. Were that to happen, the central banker will likely raise the CBR reversing recent gains that saw the policy rate sink to 14 percent last month.

The economy continues to perform below potential with growth stagnating below five percent. Economists blamed tight credit conditions for the slowdown as firms postponed expansion plans in light of steep lending rates that reached 30percent.