Food price shock pushes Uganda’s September inflation to 4.0%

The Ugandan economy is grappling with a cost-of-living crisis, driven almost entirely by a sharp surge in food prices that is offsetting efforts to moderate inflation in core sectors like goods and utilities.

According to the latest Consumer Price Index (CPI) report from the Uganda Bureau of Statistics (UBOS), annual headline inflation for the year ending September 2025 jumped to 4.0 percent, up from 3.8 percent in August. The data highlight a volatile marketplace where soaring prices for basic foodstuffs are forcing policymakers to focus squarely on stabilizing the agricultural supply chain.

Food Price Volatility Drives Inflation

The primary driver of the overall increase is the agricultural sector. UBOS reported that annual food crops and related items inflation more than doubled, climbing to 7.4 percent in September from just 3.0 percent in August. The bureau attributed the surge to sharp reversals in key staples.

“Tomatoes saw their price change spike to 30.4 percent in September, a dramatic swing from minus 6.4 percent the previous month,” UBOS noted. Pineapples also jumped, with prices rising 44.6 percent compared to 9.4 percent in August. Matooke recorded a 14.8 percent increase, fresh leafy vegetables reversed a decline to post 2.7 percent, and onions rose 1.8 percent after falling 31.3 percent the prior month.

This volatility is straining household budgets and squeezing margins for restaurants and catering businesses that rely heavily on fresh produce.

Core Inflation Shows Modest Relief

The broader “core” economy, which excludes volatile items like food and energy, offered some relief. Annual core inflation eased slightly to 4.0 percent from 4.1 percent, while core goods inflation fell to 3.0 percent from 3.2 percent, reflecting moderating prices for manufactured goods, household items, and imports. Energy, fuel, and utilities (EFU) costs also eased into deflation at minus 0.1 percent, driven largely by lower charcoal and firewood prices.

Despite this, services inflation is rising. Kampala’s high-income segment saw overall inflation of 5.7 percent, largely due to a 9.1 percent jump in food and non-alcoholic beverage prices.

Regional Differences Highlight Local Pressures

Inflationary pressures vary across Uganda’s major centres, reflecting localized market dynamics. Masaka recorded the highest annual inflation at 4.7 percent, up from 4.6 percent, driven by food and restaurant costs. Food and non-alcoholic beverages inflation surged to 6.9 percent, while restaurants and accommodation services rose to 6.7 percent.

By contrast, Mbale reported the lowest annual inflation at 0.4 percent, largely due to falling housing and utility costs. UBOS noted that housing, water, electricity, gas, and other fuels inflation dropped to 2.0 percent from 4.6 percent, keeping overall inflation subdued.

The Road Ahead

The data underscore a dual challenge for Uganda: managing structural volatility in the food supply while maintaining macroeconomic stability. For households, the impact is immediate, with higher food costs driving the cost of living. For businesses, falling transport and utility costs are offset by soaring raw material prices and rising service costs in key hubs like Masaka.

As policymakers respond, the focus remains on strengthening the agricultural supply chain, stabilizing volatile food prices, and balancing core inflation pressures to ensure the broader economy remains on track.