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Rise in commodity prices is a good thing
Author: Phillip Matogo. PHOTO/FILE
What you need to know:
- As we get poorer, the very motive force of change will be underlined by a Chinese proverb which says “things will develop in the opposite direction when they become extreme.”
This week, it was reported that Parliament appealed to the Government of Uganda to stick out its chest and take some muscular measures to wrestle the rising prices of basic commodities to the ground.
The prices of basic commodities such as cooking oil, rice, sugar, bread, milk and other items have risen sharply in recent weeks making them growingly unaffordable to the poor.
“I wonder if the local person in the village can afford a bar of soap at Shs10,000. This cannot be an issue of studying; this has to be worked on immediately. The local person needs to be rescued in this matter,” Deputy Speaker Anita Among, who represents Bukedea District as Woman MP, said during Parliament’s plenary session.
Predictably, the Minister of State for Finance, Planning and Economic Development (General Duties), Henry Ariganyira Musasizi, seemed to be at sixes and sevens about what exactly was going on.
“I need to go back and make an analysis and come back with a comprehensive statement,” he reportedly insisted.
Without pre-empting the minister or trying to pretend I could fit in his supposedly analytical shoes; I would advise him to follow the trail of breadcrumbs which lead to a Uganda Bureau of Statistics (Ubos) Consumer Price Index report.
This report reveals Uganda’s inflation in its primary colours as having climbed to 3.2 percent up from 2.7 percent registered in January,
The Ubos report adds that the said inflation is filliped by the multi-layered increase in prices of education services, furnishings and routine household costs that went up by nine percent.
The Ubos report also states that restaurants and accommodation services went up by 3.2 percent, clothing and footwear 2.5 percent, transport 0.6 percent, personal care, social protection and miscellaneous goods by 4.6 percent.
Also, according to this bruit, the annual energy fuel and utilities inflation (EFU) increased to seven percent, up from 6.5 percent in January 2022.
The increase in EFU Inflation, the statistics agency stated, was due to annual liquid energy fuels that increased to 25.2 percent in February 2022 up from 22.6 percent in January.
Specifically, annual petrol inflation increased to 34 percent in February 2022 up from 30.5 percent registered in January 2022.
Although statistics only tell part of the story, God is in the details. So, let’s wade through this stream of data towards the promised land of understanding.
According to a recent ministry of Finance report, revenue collections have increased by 48 percent in the last five years.
The report states that revenue collection has increased from Shs13.4 trillion in 2016/2017 to Shs21.1 trillion in the 2020/2021 Financial Year.
The Finance ministry says revenues have gone up because the Ugandan economy has grown.
It adds that revenue collection will continue to grow owing to the recent reopening of the economy, which is expected to broaden and deepen economic activities to reflect increased taxation to actuate government’s provision of good and services to long-suffering Ugandans.
Accordingly, while prices have gone up on one hand, revenue collections have risen on the other.
However, the increased revenue collections (and attendant taxes) seem to do nothing but promote a patronage system which keeps the ruling regime up and the rest of us down.
Ironically, however, this is a good thing.
That’s because the more Ugandans suffer, the more they shall realise that the government has debauched our democratic structures and principles to tools of oppression and State control.
Thus, as we get poorer, the very motive force of change will be underlined by a Chinese proverb which says “things will develop in the opposite direction when they become extreme.”
Mr Matogo is a professional copywriter
