Multiple international crises are driving up commodity prices in Uganda, increasing public unease.
Multiple international crises are driving up commodity prices in Uganda, increasing public unease, according to the country’s finance ministry.
In a recent statement, Finance Minister Matia Kasaija said that issues ranging from the Russia-Ukraine conflict to the current COVID-19 epidemic are driving up costs of basic products and services such as laundry detergent, wheat flour, cooking oil, education, and transportation.
He said that the Russia-Ukraine war has exacerbated an already perilous position by affecting supplies of oil, cereals such as wheat flour, maize, and sunflower oil, as well as vital metals such as aluminum and nickel.
Kasaija said, “These two nations are important producers and exporters of these commodities.”
According to the minister, Russia and Ukraine account for half of the world supply of palm oil alternatives, and the war between the two countries has worsened global shortages, resulting in increased raw material costs.
According to Kasaija, higher demand for palm oil and lower supply as a result of COVID-19 regulations have raised the price of laundry soap and cooking oil in Uganda.
According to ministry of finance estimates, more than 70% of the crude palm oil required to create these two goods in Uganda is imported.
Aside from the Russia-Ukraine situation, COVID-19 limitations throughout the globe have disrupted supply chains, resulting in greater shipping costs and raw material shortages, according to Kasaija.
“In recent years, the world economy has encountered high transportation prices and shortages of shipping containers, as well as rising fuel expenses, resulting in global supply bottlenecks,” he stated.
The worldwide reopening of economies after COVID-19 relative confinement drove up commodity prices due to higher aggregate demand, although output hampered by COVID-19 limitations has yet to completely recover, according to Kasaija.
The minister said that the rise in domestic pump prices as a consequence of the truck drivers’ strike at the Uganda-Kenya border has pushed up the pricing of vital items.
The administration is now advising the people to be calm while it considers potential solutions to rising costs.
Kasaija said that government authorities are looking into unscrupulous persons who are taking advantage of the situation and stockpiling necessary items in order to push up prices even more.
“We are working with appropriate authorities to examine this situation, and we will take action against any operators found to be engaging in this conduct,” stated the minister.
According to Kasaija, the government is contemplating controlling gasoline prices so that they are a real representation of the economic situation.
This is designed to protect the people from growing gasoline costs, he added, saying that Uganda is learning from its neighbors on how to better deal with rising fuel prices.
Kasaija said that the central bank would continue to monitor the situation and adopt a favorable monetary policy to guarantee that inflation remains within the target range and that macroeconomic stability is maintained.
According to the ministry of finance, Uganda’s goal is to maintain inflation below 5%. Inflation was 3.2 percent year on year last month.
According to Kasaija, the country’s high worldwide prices also provide an opportunity. He said that Uganda has completed all of the preconditions for beginning commercial production in the oil industry.
“We will hasten all project operations to guarantee a prompt commencement of oil production to bring in more dollars to increase our reserves so that the Bank of Uganda has a sufficient armory to battle inflation,” the minister added.