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Explain economic policies in language people understand
These are not just figures for economists. They show up at the fuel pump, the market stall and the school gate. Transporters in the Lango sub-region have already raised fares to Kampala. Food takes the largest share of a family’s budget, so food inflation hurts the low-income earner the most, writes Rogers Edward Kiyega
Rogers Edward Kiyega. (File)
By: Admin ., Journalist @New Vision
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OPINION
By Rogers Edward Kiyega
On October 14, the Bank of Uganda (BOU) announced that its monetary policy committee had “raised the Central Bank Rate (CBR) by 225 basis points, from 9.75% to 12.0%.”
For most Ugandans, that sentence means very little, yet it touches every household. The CBR signals what money should cost in the economy: when it rises, borrowing becomes more expensive, people and businesses spend a little less, and price increases slow down. The decision came at a difficult time.
At the end of last year, $1 cost about sh3,615; by October 30, it cost about sh4,245. Most of that fall, almost 15%, has come since June. Because Uganda imports all its fuel, a weaker shilling means more shillings for every litre, and higher fuel costs push up transport and, in turn, almost everything else. Bad weather has also hurt food crops.
The Uganda Bureau of Statistics reports that annual inflation rose to 5.8% in October, the highest in three years, while food inflation jumped to 10.7% from 4.5% in September. The finance ministry says the rate hike was meant “to contain inflationary pressures, limit second-round effects from higher energy prices and exchange rate depreciation, and anchor inflation expectations...”
The medicine has a cost: BOU has cut its growth forecast for 2026/27 to between 6-6.5%, down from 7-7.5%. These are not just figures for economists. They show up at the fuel pump, the market stall and the school gate. Transporters in Lango sub-region have already raised fares to Kampala. Food takes the largest share of a family’s budget, so food inflation hurts the low-income earner the most.
Over the coming months, commercial banks are likely to pass on the higher rate, making business loans, school fees loans and savings and credit co-operative societies’ credit more expensive. Much of Uganda’s foreign debt is owed in dollars and other foreign currencies, so a weaker shilling means more shillings to repay it, leaving less for health, schools and roads.
Speaking during the Independence Day celebrations on October 9, President Museveni said: “It is not correct to squander our dollars.” Yet, how many citizens understand why?
Ever since my days in an economics class, I have asked one question: Since these theories shape every household’s life, why are they so rarely explained in a way households can understand? An uninformed citizen reacts to events; he panics and buys dollars at the worst rate, takes on expensive debt just as rates rise, or blames the wrong people for the rising prices.
The Uganda Bureau of Statistics reports that annual inflation rose to 5.8% in October, the highest in three years, while food inflation jumped to 10.7% from 4.5% in September. The finance ministry says the rate hike was meant “to contain inflationary pressures, limit second-round effects from higher energy prices and exchange rate depreciation, and anchor inflation expectations...”
The medicine has a cost: BOU has cut its growth forecast for 2026/27 to between 6-6.5%, down from 7-7.5%. These are not just figures for economists. They show up at the fuel pump, the market stall and the school gate. Transporters in Lango sub-region have already raised fares to Kampala. Food takes the largest share of a family’s budget, so food inflation hurts the low-income earner the most.
Over the coming months, commercial banks are likely to pass on the higher rate, making business loans, school fees loans and savings and credit co-operative societies’ credit more expensive. Much of Uganda’s foreign debt is owed in dollars and other foreign currencies, so a weaker shilling means more shillings to repay it, leaving less for health, schools and roads.
Speaking during the Independence Day celebrations on October 9, President Museveni said: “It is not correct to squander our dollars.” Yet, how many citizens understand why?
Ever since my days in an economics class, I have asked one question: Since these theories shape every household’s life, why are they so rarely explained in a way households can understand? An uninformed citizen reacts to events; he panics and buys dollars at the worst rate, takes on expensive debt just as rates rise, or blames the wrong people for the rising prices.
An informed citizen plans ahead, adjusts their budget, delays borrowing that can wait and asks leaders better questions. A 2014 review of 201 studies by Fernandes, Lynch and Netemeyer found that classroom financial education does little to change behaviour, and its effect fades within months. People learn best at the moment they make a decision, in their own language and from someone they trust.
So how do we turn economic policy into knowledge that citizens can use? It starts with those who make the decisions. BoU and the Ministry of Finance should publish a one-page, plain-language summary of every policy decision, translated into the major local languages and aired on community radios. The media should go beyond the headline figure and explain what each decision means for a household budget.
SACCOs, churches, mosques, employers and schools should hold short money conversations at decision moments, such as before school-fees season or before members take loans.
Citizens, for their part, can act now: budget for higher food and transport costs, delay borrowing that is not urgent, compare loan terms carefully and avoid panic-buying dollars. Economists and leaders also carry an ethical duty to speak plainly, because knowledge kept behind closed doors protects no one.
The economy is not only what happens in the central bank’s boardroom; it is what happens at the market stall, at the fuel pump and at the school gate. If we want informed citizens, we should explain economics in the language of the people who live it.
The writer is an economist and facilitator in ethical management and leadership
So how do we turn economic policy into knowledge that citizens can use? It starts with those who make the decisions. BoU and the Ministry of Finance should publish a one-page, plain-language summary of every policy decision, translated into the major local languages and aired on community radios. The media should go beyond the headline figure and explain what each decision means for a household budget.
SACCOs, churches, mosques, employers and schools should hold short money conversations at decision moments, such as before school-fees season or before members take loans.
Citizens, for their part, can act now: budget for higher food and transport costs, delay borrowing that is not urgent, compare loan terms carefully and avoid panic-buying dollars. Economists and leaders also carry an ethical duty to speak plainly, because knowledge kept behind closed doors protects no one.
The economy is not only what happens in the central bank’s boardroom; it is what happens at the market stall, at the fuel pump and at the school gate. If we want informed citizens, we should explain economics in the language of the people who live it.
The writer is an economist and facilitator in ethical management and leadership