Of high commodity prices, unemployment 

Dan Alot Okello

What you need to know:

“...the difficult situation on affordability of commodities is a reality check among all the households lately"

Uganda is in a dilemma -the kind of dilemma that is silently chocking its populace. Already faced with high rate of unemployment and a narrative of poverty written all over the “Wananchi”, our beautiful fertile land is literally not producing enough to sustain itself.

 One would wonder whether the skyrocketing fuel prices is the main reason for the hike in prices for other commodities. Yes. It could be true because we can all assume that the common commodities need to be transported from one end to the final consumer, no doubt there is a ripple effect of the fuel price in the supply chain of all fast moving goods.
Economist will be quick to relate the current high pricing to inflation (increase in prices over a given period) that can only be controlled by the Central Bank. In an ideal world, Bank of Uganda may indicate that the inflation is not at that high to have an impact in the country. But the difficult situation on affordability of commodities is a reality check among all the households lately. 

The economic inference and inflation as predicted by BoU may not reflect the reality on the ground. Unemployment remains a constant factor among our young population and with these soaring prices one can only imagine the trauma unemployed people are faced with. Even with employed categories, the bitter truth remains that the prices go high but salaries remain constant. Surely in this state of events, poverty will reign.
With all hopes not lost, the government may be planning to try and neutraliSe the situation, but how? It would be imperative for the government to reduce taxes on the products that are of high demand to enable the locals afford them as an immediate response.

 Waiting on guidance from economic theories in our ancient academic backdrop may not help in the short time. The production level of cooking oil in Uganda is estimated at 20 per cent, implying  that 80 per cent of the cooking oil is imported and Ukraine being one of the main exporters as well clearly explain the rise in the market since the war has affected the supply chain.
Like many would criticise government’s effort in handling matters of national importance, I may be quick to say they have done significant developments that may quickly transcend Uganda to a powerful economy.

 What makes me say the latter; are the level of commitment in investment in the hydroelectric power dams that has at least solved a bigger problem of energy for running manufacturing companies and the road infrastructure development that has improved the transport network all over the country. These two strong commitments in roads and energy could only bring meaningful transition into trade and industry if the locals can be fully supported to tap and invest into commercial farming that will forever supply the agricultural value chain without depending on the imported goods. We could be good to go if 60 per cent of our production is locally consumed with only imports on goods that we cannot yet produce but not goods like cooking oil and soap.

The much-coveted principles of economics may be applied in the long-term putting aside a deteriorating factor of corruption that has been painted over the years. Also, government interventions to scale up production in agro-value chain should be boosted with keen monitoring right from the grass root if at all they are to effectively address some of the country’s low production issues. 

Locals should be encouraged to scale up growing of raw materials to feed the agro-processing industries that will yield large volumes for local consumption and even for exports. There is no point in waiting further for government actions to try and salvage the situation, rather it should act as immediately  as yesterday to save its population from the appalling prices.

The author, Mr Dan Alot Okello is a skills & employability specialist