Summary
Since January this year, prices of fuel, soap, cooking oil and others have been on the rise, triggering public uproar.
The government of Uganda is working towards boosting the reserves of the central bank to fight inflation amid the rising prices of fuel and other basic goods, the Ministry of Finance, Planning and Economic Development has said.
The steady increase in prices of commodities and services over the last 12 months, ending February 2022 has pushed Uganda’s inflation to 3.2 percent up from 2.7 percent registered in January, according to Uganda Bureau of Statistics (UBOS).
According to the Permanent Secretary at the ministry of Finance, Mr Ramathan Ggoobi, the increase in commodity prices is a global issue that they cannot address internally.
“This is an exogenous shock you cannot address internally. We are boosting the reserves of the central bank to fight inflation,” he said.
Since January this year, prices of fuel, soap, cooking oil and others have been on the rise, triggering public uproar.
But Mr Ggoobi said government in now focusing on taking advantage of the rising prices by boosting the import substitution sector and export promotion.
“I am very optimistic that we shall be able to reform the economy. The future looks good,” he said.
The PS was appearing on KFM Radio on Saturday, March 19, 2022.
He also encouraged Ugandan households to rationalise expenditure and first cater for essential necessities as the global situation improves.
“We are monitoring the situation with appropriate monetary policy to ensure inflation stays within target,” he explained.
The PS also revealed that they have identified resources to fund the Parish Development Model next Financial Year 2022/23 without borrowing.
“This is an exogenous shock you cannot address internally. We are boosting the reserves of the central bank to fight inflation,”
rAMATHAN GGOOBI, PS FINANCE MINISTRY
Starting next financial year, government will give each parish Shs100m under the model, hence requiring over Shs1 trillion for the programme.
But Mr Ggoobi said government will only borrow to develop oil and gas sector, industrialisation and revamp of tourism to earn dollars for paying the debt.
Other priorities of government in next financial year include: human capital development (education, health), automation of systems in government, including those for monitoring teachers, and supply of essential medicines as well as infrastructure maintenance (metre gauge railway) to address cost of transport.
He also revealed that the government is addressing implementation challenges through a number of reforms.
“Supplementary budget is a symptom of poor planning & budget indiscipline. A supplementary should be for an emergency such as COVID-19, not for paying wage or buying a car,” he said.
He further reiterated that Government economic policy is focused on supporting economy and households to recover from effects of COVID-19 through the small business recovery fund, Emyooga, UDB and UDC funding as well as accelerating socio-economic transformation which is being done by repurposing the budget.