The minister of Finance and Economic Development, Matia Kassaija has revealed that the increase of prices of essential commodities is beyond their abilities as policymakers.
Addressing the journalists at Uganda Media Centre on Tuesday, Kasaija noted that although Ugandans are crying that prices of essential commodities like laundry bar soap, cooking oil and fuel are high beyond normal, in other countries such as Rwanda and Kenya prices are almost twice than those in Uganda and this is because of the increase of annual inflation in large producing governments.
“The rise of prices in Uganda, however, is much lower compared with current global trends. Inflation has risen everywhere in the world including in advanced nations, emerging economies and poor countries. For example, the annual inflation rate in the US, accelerated to 7.9 per cent in February of 2022, the highest they have recorded in 40 years since 1982.”
Kasaija advised that Ugandans should not panic because this is a temporary situation that is going to subsdued sooner or later.
“As we may all observe, the main causes of the recent increase in commodity prices are external and thus beyond the ability of policymakers in any one country to deal with directly.”
He, however, revealed that the government through the Bank of Uganda will continue to monitor the situation and respond, whenever necessary, with appropriate monetary policy to ensure inflation stays within target and maintain macroeconomic stability.
The Minister also promised that Government will continue to support farmers to grow more food and vegetable seeds and cereals to take advantage of the rising global and regional prices to boost the country’s export earnings.
“In addition, the Government has started implementing the Parish Development Model so that the 39 per cent of the households in subsistence may join the money economy and build capacity to withstand shocks as price hikes. Furthermore, we will expedite implementation of projects activities to ensure a timely start of oil production to bring in more dollars to boost our reserves so that Bank of Uganda has enough arsenal to fight the inflation.”
Kasaija further re-emphasized that the recent rise in prices of some essential goods and services is a temporary shock, having been caused by disruptions in the global supply chains due to covid-19 and geopolitical tensions.
“The situation will soon normalize. We are putting in place policy interventions to ensure macroeconomic stability and affordable cost of living for all Ugandans. We are also taking advantage of these global crises to boost our import substitution industrialization strategy to support the private sector to produce domestically some of the intermediate goods used to produce most of the affected goods and service.”
Minister Kasaija’s address follows the current increase in prices of some of the essential goods. Particularly, the prices of cooking oil, laundry bar soap, fuel (Petrol and Diesel) and some services such as transport fares and education services.
According to the Uganda Bureau of Statistics (UBOS), cooking oil has registered the highest rise in price by 21 per cent between December 2021 and February 2022 and 77.6 per cent in the past one year. While the price of Laundry Bar Soap has increased by 20 per cent between December 2021 and February 2022 and by 47.8 per cent in the past one year. Also, fuel (Petrol) has risen by 15.3 per cent in the past three months and by 34 per cent during the past one year.
Due to such increase of different commodities, the Consumer Price Index (CPI) for February 2022 also increased to 3.2 per cent from 2.7 per cent in January 2022.
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