The aim of re-basing is mainly to ensure that new items in the economy, which could have become more important that before, are included and their weight put into consideration.
The annual headline inflation for the year ended March 2021 now drops to 2.7% from the 4.1% that was recorded before rebasing.
The Uganda Bureau of Statistics
will now calculate the Consumer Price Index, CPI, (inflation) based on the year
2016/2017 from the previous calculations that were based on the year 2009/2010.
This following a rebasing
exercise for the price indices to make sure the statistics provided are as
up-to-date as possible or closer to the period for which prices changes or inflation
is being calculated.
The CPI is designed to measure
the change in prices overtime for a fixed basket of goods and services that are
commonly consumed by a household within as area or economic territory.
That period of time is the base
year, and when it is chosen, a collection of goods and services on which the calculation
of price movement is made, is also selected. The items in the collection are
then arranged in their relative importance or contribution to the average price
This relative importance is
referred to as the weight of the item. Moving from basing the price
changes on one year, to a more recent year is referred to as re-basing.
The aim of re-basing is mainly to
ensure that new items in the economy, which could have become more important
that before, are included and their weight put into consideration.
Rebasing is usually done every
UBOS The Executive Director, Chris Ndatira Mukiza, says this is aimed
at producing statistics which are as accurate as possible to aid development
Third National Development Plan recognizes statistics as a “public good” and calls
for collection, management, analysis and dissemination of integrated, relevant,
reliable and timely statistical data and information for development planning,”
adds that rebasing to ensure more accurate statistics is even more important
since Uganda adopted the programme Based Budgeting approach which focus on results.
it is only statistics that can tell the results attained by the different
programmes as highlighted in the NDP III.”
2019, the government rebased the size of the economy or GDP on the 2016/2017 as
base year, and the new figures shows that the economy had expanded by 20% to $34
however noted that as the need for accurate and more statistics grows, will
need more resources from government and other support organisations.
Juliet Nakayenga, Senior statistician prices at UBOS says the aim of the rebasing was specifically to Incorporate the
best practices recommended for the compilation of the CPI particularly the
classification of products, so as determine Changes in Household consumption
The exercise also aimed at incorporating changes
in innovations and technological, changes in the developments in Methods of
compiling CPI, and taking into account the recommendations by international
organisations like the IMF, COMESA and EAC.
The sources of the weights for the consumer
price index included the Uganda National Housing Survey of 2016, the 2017
Tourism Expenditure and Motivation Survey, the 2016/17 Balance of Payments,
informal cross-border trade surveys as well as education surveys, among others.
Rebasing saw new items of goods and
services included in the basket, including personal care, social protection and
Some items gained weight over others.
The largest contributor to the index
remains food and non-alcoholic beverages, which account for 27.1% of household
expenditure, though it slightly dropped from 28.5%.
It is followed by housing, water, electricity,
gas and other fuels which also fell in weight slightly, followed by Transport.
Transport now accounts for 10.5% down from 13.8.%.
It also led to reallocation of some districts
to different regions, especially as some new districts came into place since
the 2009/2010 base year.
According to UBOS released Monday, the
rebased inflation for the year ended March 2021, was 2.7% up from 2.3% recorded
for the 12 months ending February 2021.
These figures are lower that the figures
recorded before the rebasing.
On 31st March, UBOS released the
its CPI showing that that heading inflation had risen by 4.1% for the year
ended March, up from 3.8% for the year ended February 2021.
The rise in inflation was due to the increase
prices of foods, mainly vegetables, as well as services and fuel, among others.