Opposition proposes interventions in rising commodity prices

Opposition in Parliament has come up with a list of proposals for government to consider while resolving the escalating commodity prices in the country.

While addressing journalists at Parliament yesterday, Mr Muhammad Muwanga Kivumbi (Butambala County-NUP), the Shadow Minister of Finance, Planning and Economic Development, highlighted the proposals while making a statement on behalf of the Opposition group in Parliament.

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The suggestions include Uganda Revenue Authority (URA) to start printing its own stamps rather than involving SICPLA (U) Ltd, a private company they are accusing of issuing expensive and inefficient digital ones. He added that this would also boost tax collections.

“Manufacturers have started passing on the cost of electronic stamps to the consumer through high prices of goods,” Mr Kivumbi said.

The members also proposed the eradication of fuel marking reasoning that the process imposes additional costs to a litre of petroleum products imported in the country. The marking process involves introduction of a unique marker into petroleum products before distribution.

Mr Kivumbi tasked government to print out the list of beneficiaries of the $742 million (Shs2.6 trillion), money International Monetary Fund (IMF) gave to the country to help in the recovery of the economy following the outbreak of the Covid-19 in March 2020.

In June 2021, IMF issued a statement saying it was giving a three-year financing package to Uganda with the intention of supporting short-term responses to the Covid-19 crisis.

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“The question is, can government account for which agencies and companies have benefited from this (money). The small businesses that should have benefitted didn’t. Money did not go where it was supposed to go,” he said.

The legislator said the money could have been lent out to small businesses to boost production of commodities

The  IMF also gave the country money that include the emergency loan of $491.5m (Shs1.76t) in May 2020 and in June 2020, its executive board approved $ 1 billion (about Shs3.6t).

Mr Ramathan Ggoobi, the permanent secretary in the Ministry of Finance, Planning and Economic Development,  told Daily Monitor yesterday that increasing prices are worldwide.

“The increasing prices have been caused by a combination of the Covid-19 pandemic which disrupted the supply chain, shortage of shipping containers across the world, deficiency of truck drivers, high transport costs, and fuel prices have also increased and once fuel increases, then everything else is affected,” Mr Ggoobi said.

He added that the Ukraine-Russia war also partly affected the supply of oil around the world.

Mr Ggoobi said these are global challenges, therefore attributing the situation to stamps is unfair. 

“We are spending this money [IMF loans] according to structural benchmarks which include areas of governance and in order to qualify for more money, one has to first satisfy them in terms of accountability, including where the money has exactly gone to in terms of expenditure. These guys are very serious about tracking all these things,” Mr Ggoobi said. 

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URA says

Mr Ibrahim Bbosa Kibuuka, the URA spokesperson and Assistant Commissioner Public and Corporate Affairs, said the cost of digital stamps is not necessarily contributing towards the increased prices.

“These digital stamps have been here for the last two years. When these stamps were first introduced, we observed that prices of commodities did not change and the manufacturers were absorbing the cost of the stamp,” Mr Kibuuka said.

Similarly, on fuel marking, Mr Kibuuka said if people feel that the measure is affecting prices, there is a need to speak about the matter.