Bank of Uganda Deputy Governor Michael Atingi-Ego has said the soaring food inflation is hitting the poorest Ugandans hard.
“Food inflation has soared over the past few months, from 0.7% in February 2022 to 16.4% in July 2022, because of dry weather conditions across the country,” he said.
“This adversely affects the bottom of the pyramid in society who are mainly engaged in informal activities and spend a large proportion of their incomes on food. Their ability to adapt to these challenges is not helped by the fact that most of them are financially excluded,” he said.
Atingi-Ego made the remarks at the annual financial inclusion and financial literacy forum in Kampala on Thursday, August 10.
The forum is part of BoU’s review for the National Financial Inclusion Strategy, which comes to an end in September 2022.
Many Ugandans are suffering from the COVID-induced cost of living crisis that has been aggravated by the war in Ukraine.
The prices that have sharply risen are those of soap and cooking oil, sugar, rice, petrol and diesel.
Atingi-Ego said as they embrace the adoption of digitalisation to kindle the demand for financial services, and access to quality and affordable financial products by people at the bottom of the pyramid, they should remain cognizant of the effects of their innovations on environmental sustainability, social well-being, and governance.
He said their data had shown that about 75% of Uganda’s workforce remains in the informal sector, with the youth and women over-represented.
“Youth and women are, indeed, focus groups identified within the financial literacy strategy and the focus of today’s sessions. How can technology supplement or enable our efforts to propel the youth, women, micro, small and medium enterprises into the formal financial sectors?” he asked.