Z’bar headline inflation climbs, says BoT review

By The Citizen Reporter

Z’bar annual headline inflation rate increased to 5.2 per cent last December from 4.7 per cent in the year ended November 2009.

The Bank of Tanzania (BoT) attributed the trend mainly to rises in food and other commodities.
The annual food inflation rate increased to 7.1 per cent in December from the 6.8 per cent the previous month because average prices of fish, sugar and maize flour jumped.

“The average prices of fish and sugar increased from Sh3,763 and Sh1,080 in December 2008 to Sh4,116 and Sh1,249 per kilo respectively in December 2009,” it noted.

Late last December; Zanzibar was plunged into darkness following a breakdown of a power cable from the Mainland.

During the three-month blackout, commodity and service prices rose.

“However, the month-to-month headline inflation rate declined to negative 0.9 per cent on account of deceleration of non-food inflation,” it noted in the January economic review.

“The global financial crisis also pushed up inflation to an average rate of 20.6 per cent in 2008 compared with 13.1 per cent in 2007,” the minister of State in the President’s Office (Finance and Economic Affairs), Dr Mwinyihaji Makame Mwadini, said.

Food shortages and escalating food prices pushed up the inflation in 2008.
But the annual headline inflation eased to 4.5 per cent last October from 25.3 per cent in October 2008.

Despite having arable land and favourable rains, Zanzibar still imports most of its food, with vegetables and maize mainly coming from the Mainland.

Dr Mwadini said the government gave priority to farming in its last year’s operational and fiscal plans to increase food production, diversify cash crop production and add value to farm produce.