Members of Parliament blame rising inflation on excess liquidity during the February and March elections.
The rise in inflation in Uganda is an issue of considerable concern in Parliament. MPs are questioning the capacity of the Bank of Uganda to manage the sudden spike and want an investigation into any irregularities.
The latest Uganda Bureau of Statistics consumer price index report shows that the annual headline inflation rate for the year ending February 2011 rose to 6 percent from 5 percent for the year ended in January. Food crops registered an annual inflation rate of 6.9 percent compared to 1.5 percent the previous month and the annual energy fuel and utilities inflation rate also rose by more than one percentage point.
Isha Otto, the Oyam North MP, believes there is something suspicious at play. He says it is possible that the large amount of currency released for the general elections caused excess liquidity that was not met with sufficient goods supplies.
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On Thursday, the Bank of Uganda held a news conference to explain the inflation. It said the rise was caused by both domestic and global factors like the tensions in the North African countries of Libya and Tunisia.
However, Elijah Okupa the Kasilo County MP sees a more direct link with the excessive flow of money during the recent campaigns.
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Frank Tumwebaze, chairperson of the parliamentary committee on national economy, says blaming the elections for the inflation is simplistic. He notes that the prices of only a select number of consumables have risen and the market has largely been stable.
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According to the Bank of Uganda, the shilling-to-dollar exchange rate has depreciated for six consecutive months.