Govt readies self for cost of living protests

The government of Uganda (GoU) is taking no chances and will not allow any public demonstrations and protests against the rising price of commodities and cost of living in the country, Sunday Monitor has learnt. 

Several sources we have spoken to indicate that both the military and the police have orders to “decisively” deal with any whiff at a protest or social dissent. 

Former FDC president, Dr Kizza Besigye was on Thursday met with a heavy-handed restriction that ended in a preventative arrest after he tried to protest rising fuel and commodity prices.

Before springing to action outside Dr Besigye’s abode in Kasangati, security forces—including the military and police—maintained a quiet presence in the “protest hotspots” of Kampala. There, they conducted routine—if mundane—foot patrols. 

The orders asking them to be eagle-eyed preceded the latest warning by the International Monetary Fund (IMF) that surging food and energy prices caused in part by geopolitics in the Black Sea region could lead to “social unrest” in Africa.

Prices of commodities and fuel were rising in the country long before the Russia-Ukraine war. 

Observers put the inflationary pressures down to the 2021 General Election and Covid-19 pandemic disruptions/responses.

Faced with fuel inflation spillover effects, the government has been adamant on subsidies and other interventions. It has instead recommended varied belt-tightening measures. 

This is in spite of the IMF suggesting that countries, like Uganda, need a careful policy response to address the daunting challenges at hand. The international lender says fiscal policy will need to be targeted to avoid adding to debt vulnerabilities.

“Policy makers should as much as possible use direct transfers to protect the most vulnerable households. Improving access to finance for farmers and small businesses would also help. Countries that can’t provide targeted transfers can use temporary subsidies or targeted tax reductions, with clear end dates,” IMF said in an April 28 analysis.  

If well-designed, IMF researchers say households can be protected by providing time to adjust to international prices more gradually. “To enhance resilience to future crises,” the lender adds, “it remains important for these [Sub-Saharan] countries to develop effective social safety nets.

History won’t repeat itself

The Uganda government is not taking any chances given the chaos that Dr Besigye’s “Walk to Work” protests fomented 11 years ago. The government used a heavy-handed approach to stop Uganda from having its ‘Arab Spring’ moment. The “Walk to Work” protests were triggered by a cost of living crisis not dissimilar from the one that saw a street vendor in Tunisia—Mohammed Bouazizi—self-immolate in December 2010. The ensuing protests after Bouazizi’s self-immolation led to the collapse of a number of regimes, including in Tunisia and Egypt.

Protests over rising prices and shortages, which gained momentum in April, have already caused the collapse of the government in Sri Lanka, where people rose up because of a classic cost of living crisis.

The allegations of looting the country’s coffers by the embattled Rajapaksa regime in Sri Lanka have been tied to Uganda by money laundering claims. The allegations are yet to be independently verified.

On May 11, court granted bail to five Makerere University students. The quintet was part of a larger group of 15 university students, who were arrested while protesting over skyrocketing prices. 

The incarcerated students were only granted bail to allow them to write their end of semester exams.

Earlier, on May 5, police mounted a brutal crackdown on a group of university students. 

The students had chained themselves together and staged a demonstration near Parliament in Kampala over the increasing prices of essential commodities and services. They said they were left with little choice after attempts to get in touch with their respective MPs to present their plight before the House failed. 

Business as usual

In its Monetary Policy report for April, Uganda’s central bank stopped short of painting a rosy picture. It cited “the shilling [that] continued to appreciate, gaining 3.5 percent year-on-year and 0.5 percent quarter-on-quarter against the US dollar in the quarter to March 2022.” 

A balance of payments surplus in the 12 months to February also came in handy, with the Bank of Uganda saying it “reflect[s] robust capital inflows and tourism receipts, which more than offset the deficit on the current account.” 

Elsewhere, the Finance ministry has blamed the recent inflationary pressures on the fact that “Uganda is a net-importer of intermediate raw materials used in production of items such as refined cooking oil and laundry bar soap.”

The ministry says the Covid-19 restrictions across the world disrupted supply chains, leading to higher transport costs and shortage of intermediate raw materials used to produce items such as soap, cooking oil, among others.