Africa’s Inflation Rate Climbs as Food Prices Jump

NAIROBI (Capital Markets in Africa) — Kenya’s inflation accelerated to 5.6% in April from a revised 5.5% in the previous month as food prices rose by double digits, the Kenya National Bureau of Statistics said Thursday in an emailed statement. Prices rose 0.9% in the month. Prices of food and non-alcoholic drinks, which make up a third of the inflation basket, climbed almost 12%. The transport index climbed to 5.4% even after the government cut gasoline prices by 16% for the month beginning April 15. Inadequate food production is likely to remain the most significant risk factor contributing to inflation this year. Farmers are facing challenges with accessing seeds and fertilizers as well as a shortage of labor due to the coronavirus pandemic. A locust invasion plaguing East Africa could also harm farm output. The central bank said on Wednesday, when it cut interest rates to an almost nine-year low, that it sees inflation remaining inside the target band of 2.5% to 7.5% in the near term and that demand pressures is subdued.

Zambia Inflation Rate Surges to 43-Month High in April
Zambian inflation accelerated for a 13th straight month in April to the highest rate in almost four years as its currency continued to plummet. Consumer prices rose 15.7% from a year earlier, compared with 14% in March, the Zambia Statistics Agency said Thursday. That’s the highest rate since September 2016. Prices rose 2.2% in the month. The kwacha has weakened 2.5% against the dollar this month, taking its plunge for the year to 24%, the worst-performing currency in Africa. The depreciation was partly driven by investor fears that the southern African nation will default on its debt. Moody’s Investors Service and Fitch Ratings both flagged that risk when they downgraded their assessments of the country’s debt in April. Inflation has now been above the target band of 6% to 8% for 12 consecutive months and is expected to remain high in the earlier part of the central bank’s two-year forecast period. That’s preventing the Bank of Zambia from cutting interest rates to help cushion the economy against the the impact of the coronavirus pandemic. The International Monetary Fund projects gross domestic product will contract 3.5% this year.
Africa’s second-largest copper producer experienced a severe drought in the southwest of the country during the 2018-19 rainy season, which pushed food prices higher and slashed output at the hydropower plants, resulting in daily rolling blackouts lasting as long as 12 hours. The southern African nation relies on hydropower for about 80% of electricity generation.

Uganda Annual Inflation Quickens to 3.2% in April
Inflation in the East African country accelerated from 3% last month, Uganda Bureau of Statistics says in an emailed statement. Core inflation rate rose to 3.4% from 2.5% in March. Prices of food crops and related items declined 2%, compared with a 2.5% increase in the previous month Monthly inflation 1% from 0.1% in March.

Mauritius March Consumer Prices +2.9% Y/y; +0.8% M/m
Mauritius’ inflation rate accelerated from 2.1% in February according to data published by the Port Louis-based statistics agency. Food & non alcoholic beverages prices +7.9% y/y, +2.3% m/m