Traders say stated inflation rate drop lacks impact

Despite recent government announcement that inflation rate has gone down, food prices have remained high persistently, The Guardian on Sunday can reveal in a random survey.

The National Bureau of Statistics (NBS) stated on October 16, that the September inflation rate fell to 13.5 per cent from 14.9 per cent in August, adding that food and non-alcoholic drink prices eased to 15.6 per cent from 18.8 per cent.

For example, prices for rice, sugar, beans, banana and oil were still high as they were in earlier months in Dar es Salaam city’s commercial sections like Buguruni and Kariakoo.

The price of maize meal was Sh1,000per kilogramme and that of rice per kilogramme was from Sh1800 to Sh2500, while for oil it is from Sh3,200 to Sh4000 depending with the quality of oil.

A kilogramme of beans is sold at Sh1,800. In August when the inflation rate was 14.9 and in July when the inflation rate was 15.7 the going prices were the same as the prevailing ones.

At Kariakoo Valerian Moshi said: “I don’t know what declining inflation means…we understand when the rate is high, the price of food is also high. But if the rate has dropped why are prices not falling?”

Dr Oswald Mashindano, Principal Research Associate with the Economic and Social Research Foundation (ESRF), said the methodology used by NBS to establish the rate did not cover all markets in the country.

He explained that out of 800 markets, the NBS can take 50 or 60 markets only as representative sample.

Meanwhile, Dr Mashindano who is also Economics Lecturer at the University of Dar es Salaam (UDSM) faulted the system used by NBS. “Our data is not good enough and unreliable, “he said.

He explained that the decline in the rate from 14.9 in August to 13.5 of September is small change in a developing country like Tanzania. For that reason the impact of the decline can not observed immediately.

If the country had a strong economy like that of the US, a decline in single digit would have direct big impact that would be notice by the customers.

From 1999 to this year, Tanzania inflation rate averaged 7.5 per cent reaching an all time high of 19.8 percent in December of 2011 and a record low of 3.4 percent in February of 2003.
The inflation rate in Kenya was recorded at 5.4 per cent in September of 2012
Uganda's year-on-year rate inflation slowed sharply in September to 5.4% from 11.9% a month earlier, the Uganda Bureau of Statistics reported on September 28.