Nov. 9 (Bloomberg) -- Uganda will take more than a year to introduce inflation-targeting, said Elias Kasozi, the executive director for operation at the central bank, five years after first announcing plans to adopt the system.

The Bank of Uganda has started the preparatory work for the introduction of inflation-targeting, he said in an interview on Nov. 6 in the capital, Kampala.

“Groundwork for the introduction of inflation-targeting is ongoing,” he said. “It will take more than a year for us to introduce it.”

The financial market will be more stable under inflation- targeting and it won’t require the central bank to intervene frequently in stabilizing the market as is the case today, said Kasozi. The bank has said it intends to adopt inflation targeting since at least 2005.

In May, central bank Governor Emmanuel Tumusiime-Mutebile said it would take two years to introduce the system.

In preparation for the switch, the statistics agency will need to release data on economic growth and employment on a quarterly basis, as opposed to once a year as at present, he said.

Uganda’s annual inflation rate slowed to 13.3 percent in October from 14.6 percent in September after the price of some foods declined, according to the Uganda Bureau of Statistics.

Uganda, with a population of more than 30 million people and an $11 billion economy, is the second-biggest coffee grower in Africa, after Ethiopia.

To contact the reporter on this story: Fred Ojambo in Kampala via the Johannesburg bureau at pmrichardson@bloomberg.net.

Last Updated: November 9, 2009 02:42 EST