Uganda Inflation Hits 5.8%: Shilling Slump Pushes Food Prices to a Three-Year HighUganda Inflation Hits 5.8%: Shilling Slump Pushes Food Prices to a Three-Year High
Key Highlights
- Uganda's inflation has reached its highest level in more than three years as a weakening shilling lifts the cost of everyday food.
- Food inflation more than doubled in one month, while the central bank's emergency rate rise has yet to cool prices.
- The squeeze reaches Kenyan traders who rely on Ugandan shoppers and a currency that keeps losing ground.
Uganda's annual inflation climbed to 5.8% in October, the fastest pace in more than three years, as a collapsing shilling pushed up the cost of fuel and food across Kampala's markets.
The figure matters well beyond Uganda's borders. Kenyan exporters, truckers and traders at Busia and Malaba sell into a market where shoppers are suddenly paying more and the currency they pay in is worth less, which squeezes demand for Kenyan goods.
Food prices more than double their pace
The Uganda Bureau of Statistics said annual inflation rose to 5.8% from 4.6% in September, the highest since June 2023, when energy price spikes linked to the pandemic and the war in Ukraine were still easing. Food inflation jumped to 10.7% in October from 4.5% a month earlier, more than doubling in a single reading.
Reuters reported that the rise followed a sharp slump in the shilling in recent months, alongside higher oil and food prices. The currency traded at about 4,245 to the dollar (KSh 129.94 at the 8 October rate) on Friday, against 3,614.50 at the end of 2025, and is down almost 15% since June.
The central bank has already moved
Mwenendo earlier reported on how the Bank of Uganda lifted its key rate to 12% at an unscheduled meeting on 14 October. That was before the October figure was known, and the new reading shows why the bank acted. The central bank also raised the banks' reserve ratio and, according to local traders, has intervened in the foreign exchange market.
Governor Michael Atingi-Ego had warned that the shilling's slide could feed inflation. The bank's medium-term inflation target is 5.00%, and the 5.8% reading is above it.
What it means for Kenya
As Mwenendo earlier reported, Kenya's steady shilling leans on a thinning cushion of reserves while Uganda's currency weakened. The Ugandan reading adds a trade angle: a weaker shilling makes Kenyan goods dearer in Uganda, a major destination for Kenyan exports, while higher living costs leave Ugandan households less to spend.
Whether the bank raises rates again will depend on the November data and on whether the shilling steadies. Another increase would raise borrowing costs for Ugandan importers who buy from Kenyan suppliers.
In Summary
- What did Uganda report?
- Annual inflation rose to 5.8% in October from 4.6% in September, the fastest since June 2023.
- Who released the figure?
- The Uganda Bureau of Statistics, on Friday 30 October 2026.
- Why did prices rise?
- A sharp slump in the shilling and higher oil and food prices; food inflation reached 10.7% from 4.5%.
- How has the central bank responded?
- It raised its key rate from 9.75% to 12% on 14 October and lifted the banks' reserve ratio.
- Where does Kenya feel it?
- Through cross-border trade at Busia and Malaba, where a weaker Ugandan shilling makes Kenyan goods dearer.