Prime
Cost saving must be a national culture
According to the Uganda Bureau of Statistics, inflation has hit 6.3 percent up from 4.9 percent and it’s further increasing due to sharp increase in fuel and consumer commodity prices.
All this was expected as the country reels from global challenges such as unending pandemics, geopolitical strife’s and supply chain disruptions.
When the government spends more than it gets and labour gets more than it gives, the empty feeling in your pocket is inflation.
It is an invisible tax which Parliament never passes. Inflation devours democracy; yes it does! It is not self-correcting but self-accelerating.
Inflation rises with the compound vengeance. Of all economic phenomena it is the most ruthless, relentless and remorseless. Experts say that one way of fighting inflation is increasing direct tax collections and reducing indirect tax collections.
A rise in fuel cost gives rise to prices of almost everything across the board. It bites the common man the most through rise in prices of edible oils, fruits, vegetables, and groceries among others which are essential for two square meals for a family if most can still afford them anyway.
While admittedly a modest dose of inflation becomes inevitable in a growing economy it’s spiraling nature is a strict no. Taming it ought to be the priority of any welfare state.
The political cost of the unrest arising out of inflation (which makes it difficult for a common man to make both ends meet) can be very costly. The citizens ought not to miss the message that the Ugandan government has at long last felt the need to control inflation which threatens to run out of control, if not checked.
The need of the hour is that government defers all expenditures which have no bearing on the daily life of a common man. It is necessary that government departments/establishments/public sector entities immediately shift into a “cost savings mode”.
Cost saving should not be seen as a onetime measure but an ongoing exercise and a “national culture”. Ministers, MPs and all other government officials irrespective of their party affiliations should restrict their tour and travel programmes to a bare minimum, on “extreme need” basis and only as a last resort.
All government officials should sacrifice at least some part of their financial entitlements and discharge their responsibilities of conducting the business of the state and that of Parliament without disruptions.
Surely, the presidency should reduce its budget. The Minister of Finance should also stop such errors as being misled into signing Shs.10.6b supplementary budget, cash bonanzas or tax exemptions to the Pinettis of this world should never come up and government must stop irresponsible expenditures.
The above is just illustrative and not exhaustive.
When the President, his ministers, MPs and all government officials set an example of themselves, citizens will be inspired to follow suit.
Having said that, I always have my reservations about the rate of inflation and the cost of living index which are the favourite subjects of the Ministry of Finance and Bank of Uganda.
They all argue that the rate of inflation is being brought under control and therefore the real cost of living will progressively stabilise. This may be true on paper but the common man doesn’t seem to benefit.
I jokingly ask people who go directly to the market to buy foodstuffs. It comes out the same with the cost of living index. I asked someone at the Ubos to give me the cost of living index based on the prices of commodities needed by the common man like beans, salt, cooking oil and soap and not based on a basket that contained many items not needed. Invariably, I found out that this cost of living index was very much higher than that used by Finance and Bank of Uganda assessments.
The next few years may be those in which the Central Bank and the Ministry of Finance will have to reverse national priorities. Inflation is now on every country’s agenda and cost saving must be a “national culture”.
Phillip Kimumwe
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