(Bloomberg) -- Zambia’s annual inflation rate leapt to a more than two-year high as its worst drought on record for large parts of the country led to a surge in food prices.

The consumer price index rose to 13.7% in March, compared with 13.5% last month, acting Statistician General Chola Daka told reporters in Lusaka, the capital, on Thursday. Prices rose 1.2% in the month.

The main drivers of the acceleration in inflation were higher bread, cereals and meat prices. Food inflation soared to 15.6% from 14.1% last month. Non-food inflation slowed to 11.2% from 12.7% in February, helped by an appreciation in the kwacha. 

Food and non-alcoholic beverages account for more than half of the CPI basket. 

Zambian President Hakainde Hichilema last month declared the dry spell that’s hit farming and hydropower generation in Africa’s second-biggest copper producer a national disaster and emergency.

The government plans to realign its national budget to mitigate the impact and import corn, a staple, to cover a projected shortfall. 

The prolonged dry spell, blamed on the El Niño weather phenomenon, is an indicator of how severely Africa is being impacted by extreme weather events that scientists say are becoming increasingly frequent and severe because of climate change — even though it produces far less global-warming gases than developed regions.

Still, an almost 8% appreciation in the kwacha since February against the dollar helped temper inflation as it meant some imports were cheaper.    

The currency strength has been driven by steps taken by the central bank to support the kwacha, including increasing the reserve-ratio requirement for lenders, raising the benchmark interest rate to an almost-seven-year high in February and improved investment sentiment after Africa’s first pandemic era-defaulter reached an agreement to restructure $3 billion in eurobonds this week.

The impact of the drought on inflation may prompt the central bank to hike rates again in May. It’s also likely to put a strain on economic growth this year after it is estimated to have expanded 5.8% in 2023.

©2024 Bloomberg L.P.