By Munguongeyo Ivan
The painful rise in the prices of virtually all commodities, including staples such as food, soap, bread, sugar, and oil, is both an economic and a political issue. While the Ugandan monetary authority appears to have been overburdened by several economic interventions, the fact remains that the government has done a poor job of managing inflation, and everyone is paying the price.
In retrospect, the World Bank had recently issued a warning about Uganda’s inflation issue, noting it as a major factor in the country’s rising rate of poverty. While the Russia-Ukraine situation has received much of the blame for the current inflation surge, the lingering structural and security issues that are pushing food and basic services prices beyond the means of the poor and the essentially nonexistent middle class have also gone unnoticed.
Uganda’s inflation rate increased to 6.8% and 5.5 percent in June 2022 from 6.3 percent and 5.1 percent, respectively, in May. The latest UBOS figures show that the annual inflation rate for food crops has drastically increased from 0.7 percent in February 2022 to 14.5 percent in June 2022.They explained the rise in inflation by pointing to ongoing cost pressures brought on by rising food and energy costs globally, enduring production issues on a global scale, distribution issues, and dry weather across the nation.
Unfortunately, many do not appear to support UBOS’s perspective, which they claimed needed to do more to persuade Ugandans, particularly those who rely on their data for study and important decision-making, that the figures are not manipulated to fulfill predefined goals.
Contrary to UBOS’s assertion, households all around the nation are ensnared by steadily rising living expenses. Every other week, the cost of staple foods rises by a double-digit percentage.
President Museveni recently asserted that Uganda had attained middle-income status during the annual State of the Nation Address (SoNA).The World Bank study from two weeks later said that Uganda continues to be a low income nation. According to the research, Uganda’s gross national income (GNI) per person was roughly $840 in FY2021 and has only slightly improved during the intervening year, placing it significantly below the lower-middle income criterion of $1,045 per person.
While spending has been largely focused on food and essential commodities, food inflation has equally made it challenging for many households whose incomes have not witnessed any improvement. Indeed, the disparity between income and inflation has widened, mounting pressure on how much can be defined as disposable spending. For many Ugandans in recent times, access to food and consumer items is getting difficult by the day.
With the war in Ukraine, matters are going quickly from bad to horrid. For many households, rising inflation poses a significant challenge. Higher prices are eroding the value of real wages and savings, leaving households poorer. Already, Ugandans are beginning to witness a trend where more people are borrowing to survive, with quick loan apps taking advantage of the circumstances.
To address inflation, it is time to address structural issues and triggers. Notably is corruption. A lot of money are being swindled by a few which could have helped to cushion the economy, more subsides and deliberate efforts are needed to regulate the fuel and commodity prices otherwise Ugandans should prepare for more tougher times ahead!
Email:ivanmungu12@gmail.com
