Uganda News

The government claims it can’t do much about rising commodities prices.

The Ministry of Finance has stated that the government is powerless to help alleviate the country’s problem of increasing commodity costs because the problem affects the entire world.

Prices for a variety of goods have risen dramatically in the last two months, but this has been attributed in part to the ongoing Russia-Ukraine conflict.

However, some people have petitioned the government to abolish fuel taxes, while others have offered fuel subsidies as a way to control growing commodity costs.

Ramathan Goobi, the Permanent Secretary of the Ministry of Finance, told journalists on Thursday that all of those ideas will not help the situation.

“Nothing will be subsidized by us.” Subsidies are ineffective, and this is terrible economics. Those who have attempted it have encountered difficulties. Subsidies have a habit of going to the wrong individuals and not the ones you intended. Ggoobi stated, “The mafia may organize and take all the money for subsidies.”

He also stated that the government will not regulate commodity prices because this is lousy economics that does not work.

Ggoobi emphasized that price regulation might lead to a slew of unforeseen consequences that are harmful to the economy.

“The first to do it was Idi Amin, but it backfired.” Uganda was in a worse state than it is currently during his reign. Why do you set the price of a product if you are not the one who makes it?

Allow companies to compete. Customers will leave if businesses overcharge. Those that take advantage of this opportunity to overcharge customers may end themselves with burned fingertips. He stated, “We are not going to regulate prices.”

The Permanent Secretary of the Ministry of Finance further stated that the government will not waive gasoline taxes, particularly import duties, because this would deprive the government of necessary money.

“Waiving the tax will not solve the situation; rather, it will exacerbate it.”

Although the government will not have enough revenue, prices will continue to rise. The issues (rising commodity prices) are external. They are found all around the world, not only in Uganda.”

Ggoobi, on the other hand, cautioned that the government must exercise caution in the actions it adopts to address the problem.

“We have to be cautious about the drugs we administer.” Cancer cannot be cured with paracetamol. We must go through the cancer treatment process. The economy is similar to a person. It varies from time to time. The economy is currently sour, but it will soon improve.”

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