Pressure grows on Finance minister over soaring prices

Minister of Finance Matia Kasaija on the floor of Parliament on May 12, 2022. PHOTO/DAVID LUBOWA

What you need to know:

  • The Finance minister  says he  can only make a statement on rising prices after President Museveni has weighed in on the issue.

Deputy Speaker of Parliament Thomas Tayebwa has instructed Finance minister Matia Kasaija to furnish the House with a comprehensive statement on how the government is addressing the skyrocketing prices of goods in the country.
Rising prices—driven by increases in the cost of fossil fuels—have triggered a cost of living crisis in the country.

 In its Monetary Policy Report for April, Uganda’s central bank noted that “the heightened geopolitical tensions in Europe [and] persistent supply side disruptions induced by the pandemic…have caused global food, energy, and non-energy prices to skyrocket.”
The Bank of Uganda also forecasted that inflation will “rise slightly above the five percent target in the medium term (two to three years ahead).” Annual headline and core inflation now stand at 5.2 percent and 4.7 percent respectively.
Speaking on the floor of Parliament, Mr Martin Muzaale (Buzaya County) decried what he construed as a “slow response” from the government to the cost of living crisis.

“Day in and day out, prices of goods are skyrocketing and government hasn’t come up with a definite answer and the public is calling us all sorts of names,” he said, adding, “The public is losing confidence in this Parliament. They feel we haven’t done enough to give answers to them. I ask if it is possible for a private member’s Bill to be brought before Parliament so we have a definite solution to this problem.”
The Finance minister told the House that his ministry can only present a statement on rising prices after President Museveni has weighed in on the issue.
“The issue of escalating prices is a big concern to all of us. I don’t want to go into the narrative, you all should know the causes. This matter is before Cabinet and President, and we have sent him all the facts. And once he pronounces himself we shall come here,” Mr Kasaija revealed.

Last month, the House tasked the Finance ministry to outline plausible short-term measures to be taken to  get the country out of the cost of living crisis. Junior Trade ministers, Mr David Bahati and Ms Harriet Ntabazi had—separately—presented to the House interventions that were deemed as being short to long-term such as undertaking full blown palm oil production to cure the current high prices.

On Thursday, Mr Mathias Mpuuga, the Leader of Opposition in Parliament, urged the government not to dilly-dally for too long.
“We can’t be at the mercy of the minister going to Cabinet where we don’t sit. Our space is here,” the LoP said, adding, “May you order for debate and we take a decision for which we shall compel government to consider.”
Whereas Mr Kasaija was not ready to commit himself on an exact date to revert to the House, Mr Tayebwa intervened to force his hand.

 The Finance minister will now be expected to make a statement on the matter on Wednesday next week.
“We are living in a dynamic world. Things are changing every day. What may be true last week may not be true the next week. That is why I am saying we come back here with an updated statement which is researched. People are researching all over the world so when we come here, we will tell you the situation as it is,” Mr Tayebwa said.

INFLATION
The Monetary Policy Committee (MPC) assessed that inflation expectations remain contained, and the ongoing economic recovery still requires monetary policy support. Thus, based on the current economic conditions, the outlook, and balance of risks, the MPC decided that keeping the central bank rate (CBR) unchanged at 6.5 percent would be consistent with meeting the inflation objective of 5 percent sustainably in the medium term, while supporting economic growth recovery.’ Bank of Uganda’s Monetary Policy Report for April 2022.

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