Tanzania Investment and Consultant Group Ltd

| Economic Research Centre

Food Inflation in Tanzania: Price Stability and Third Place in East Africa
May 27, 2024  
Food Inflation in Tanzania: Price Stability and Third Place in East Africa In March 2024, Tanzania's food prices increased by 1.40% compared to the previous year, reflecting a stable trend as it had an average food inflation rate of 8.05% from 2010 to 2024, peaking at 27.84% in January 2012 and dipping to a low […]

Food Inflation in Tanzania: Price Stability and Third Place in East Africa

In March 2024, Tanzania's food prices increased by 1.40% compared to the previous year, reflecting a stable trend as it had an average food inflation rate of 8.05% from 2010 to 2024, peaking at 27.84% in January 2012 and dipping to a low of 0.10% in March 2019. With future projections indicating a slight decrease to 1.20% by the end of this quarter and around 1.40% in 2025 and 1.30% in 2026, Tanzania remains one of the African countries with the lowest food inflation rates. Comparatively, it stands third in East Africa for low food costs, led by Rwanda and Uganda, amidst varying rates across the continent, including Rwanda (-6.6%), Somalia (-3.97%), and Chad (2%).

Tanzania Food Inflation Overview

  1. Recent Increase: In March 2024, the cost of food in Tanzania increased by 1.40% compared to the same month in the previous year.
  2. Historical Average: From 2010 to 2024, the average food inflation rate in Tanzania was 8.05%.
  3. Extremes:
  • Highest Rate: 27.84% in January 2012.
  • Lowest Rate: 0.10% in March 2019.
  1. Future Projections:
  • End of Current Quarter (2024): Expected to be 1.20%.
  • Long-Term: Projected to be around 1.40% in 2025 and 1.30% in 2026, according to TICGL Economics macro models and analysts’ expectations.

Comparative Analysis with Other African Countries

Tanzania is noted as one of the ten African countries with the lowest food costs and is Third in East Africa, preceded by Rwanda and Uganda. Food inflation rates of selected African countries as of April 2024:

CountryCurrent Rate (%)Previous Rate (%)Reference
Rwanda-6.6-4.1Apr/24
Somalia-3.97-2.04Apr/24
Seychelles-1.92-1.79Apr/24
Morocco-1.40.9Apr/24
Uganda-0.8-0.5Apr/24
Cape Verde0.1-0.6Mar/24
Mali0.8-3.3Apr/24
Tanzania1.41.8Mar/24
Mauritania1.82.3Apr/24
Chad21.6Mar/24

Observations:

  1. Negative Rates: Countries like Rwanda, Somalia, Seychelles, Morocco, and Uganda have negative food inflation rates, indicating a decrease in food prices.
  2. Moderate Positive Rates: Tanzania, with a rate of 1.4%, is among the countries with low positive inflation, suggesting moderate price stability.
  3. Higher Positive Rates: Countries like Mauritania and Chad show higher positive inflation rates, reflecting more significant increases in food prices.

Implications for Tanzania:

  • Economic Stability: The relatively low food inflation rate in Tanzania is indicative of price stability, which can contribute to overall economic stability.
  • Comparative Advantage: Being among the countries with lower food inflation in Africa enhances Tanzania's economic resilience and attractiveness for investments, especially in the agriculture and food sectors.
  • Policy Impact: This performance could be attributed to effective agricultural policies, food supply chain management, and possibly favorable climatic conditions.

Hence, Tanzania's food inflation trends reflect a stable and controlled rise in food prices compared to many other African countries. This stability places it favorably within the region, particularly in East Africa, and suggests positive outcomes for its economic planning and food security measures.

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