By Benjamin Jumbe
The government has revealed that it cannot influence prices whose changes are caused by external shocks.
The remark has been made by finance minister Matia Kasaija during the reading of the national budget for FY 2022/23.
“Government cannot influence price levels whose changes are driven by external shocks that are outside its control. We will therefore not be applying measures which can lead to long-term and painful distortions in the economy. For example persistent shortages of goods, hoarding, and black markets,” Mr Kasaija reiterated in his budget speech for the 2022/ 2023 financial year.
The minister maintained that the increase in prices of essential commodity prices was due to events out of Uganda including covid-19 restrictions which caused shortage in supply chain and the Russia- Ukraine war.
He has however outlined several measures in the short and medium term to be undertaken by government including Supporting farmers to grow fast maturing foods to ensure sufficient domestic supply; maintaining a market-based determination of prices to support a continuous supply of the goods and services intended to ensure that demand does not outstrip supply.
He added that expediting improvement of alternative fuel import routes across Lake Victoria to avoid possible unnecessary supply disruptions and using appropriate fiscal and monetary policies to mitigate the impact of price shocks are some of the long term and short term measures government has undertaken to curb the rising commodity prices.
Others are construction additional fuel storage infrastructure in the medium term, and stock them adequately as well as expediting commercial oil production and development of the oil refinery.