However, a successful communication strategy requires a central bank to be credible. And this, in turn, means matching words with deeds. Our success to date in controlling inflation expectations depends crucially on the lessons we learnt from the oil price shocks of the 1970s. Central banks must now avoid the mistakes that were made then in a number of countries.
Furthermore, the vulnerability of agriculture to the weather, pests and other hazards means that surpluses cannot be produced with any degree of reliability. In these circumstances, agriculture assumes a very high risk premium, and borrowing money to purchase agricultural inputs is very risky for farmers, and they will unavoidably struggle to repay loans. Modernising smallholder agriculture in Uganda requires a holistic set of interventions.