Govt has taken steps to curb inflation
Apr 21, 2011
THE suburbs of Kampala have experienced disruption by the opposition protests against increased prices in fuel and hence food and transport. The Police on the other hand has made it clear that no demonstration will go on because the law mandates them to keep law and order.
Rogers Wadada
THE suburbs of Kampala have experienced disruption by the opposition protests against increased prices in fuel and hence food and transport. The Police on the other hand has made it clear that no demonstration will go on because the law mandates them to keep law and order.
The Police cannot let demonstrations go on unnoticed. The obvious question on the mind of the Inspector General of Police is the motive for the demonstration. The opposition simply wants to discredit the Government.
If I were one of the ring leaders in the demonstrations, I would pick on some of the radical leaders disguising themselves as NRM to join in the struggle and also entice some of the civil servants and the middle class to walk to work. In that case it would appear like a national issue other than a ‘V’ finger flashing group.
Note that many Ugandans including foreigners have invested a lot of money in the economy on the assurance by the Government that there will never be a replica of the Amin era.
Attempts by anyone to demonstrate, in my view will escalate the problem in the economy.
As such the business community should wake up and resist any attempts by demonstrators to pull down their businesses. Violent exchanges between the Police, army and demonstrators forced many businesses in Kampala, Jinja, Masaka, and Mbarara to close for fear that their property would be stolen or destroyed.
What Ugandans should be doing now is to pray and bind in the name of God what the world has preferred to call the oil curse. Indeed it is a blessing to discover oil within our boarders, but who knows, many are silently and cunningly watching like a hyena. He who has oil controls the world and when he sneezes the world catches a cold only if the sneezer is a force to reckon with.
But who is to blame for the inflation or the rising fuel and food prices?
The current inflation rate figure is not the worst that Ugandans have witnessed in the recent past. In the month of February 2009, Uganda’s inflation rate shot to a record high of 11.9% at the height of the ripple effects of the global financial crisis.
The annual food price inflation alone increased to 23.7% in March 2011 compared to the 8.9% figure that was recorded in February 2011. Prior to this, there had been a steady rise of the country’s price levels for the last six months due to draught.
The Government takes the blame for not spending a lot on agriculture since it is the backbone of our economy.
Infact the current rate of inflation is already forcing banks to revise their lending rates upwards and some have in the past few days increased their prime lending rates from 15 to 17.5% and 18.5% to 19.5% respectively which certainly is a burden on the borrower.
Last year, fuel interruptions became rampant in September when we had inadequate supply for three weeks.
The majority of oil marketing companies operating in Uganda import their products through Mombasa and would ideally truck the product from Western Kenya whose pumping capacity is too low to satisfy the demand.
This situation will remain so until the expansion of line four terminating at both Eldoret and Kisumu is complete, probably at the end of this year. Oil marketing companies’ are now forced to alternatively load from Mombasa and Nairobi.
Is government doing enough?
Efforts to address the supply problems have always been in place, but following the September 2010 supply crisis, the Government has been doing everything possible to avert the problem.
For example, the Permanent Secretary in the Ministry of Energy led a delegation to Kenya and met with the Government of Kenya officials to find ways of increasing supply to us and also to look through the causes of supply interruptions. All these efforts point to one thing, the Government is not sleeping, but doing everything within its means to address oil supply problems to Uganda.
On reporting back home, the Permanent Secretary Ministry of Energy invited all oil marketing companies in Uganda for a meeting on October 12, 2010 where an Interim Supply Coordination Committee was appointed to jointly advise Government in addressing supply problems to Uganda.
This committee was balanced and it comprised a representative from Ministry of Energy and Mineral Development, Uganda Revenue Authority, Uganda National Bureau of Standards and representatives of the Oil Marketing Companies.
The Committee met twice and made a brief to the ministry with the following recommendations in line with:
It was recommended that the Minstry of Energy here in Uganda requests the Tanzania Government for 60 days instead of the present 30 days for Transit time.
It was observed that incentive and rebate is a result of the difference in transport costs via the Southern Corridor from Dar as compared with the Northern Corridor through Kenya. It was recommended that the benchmark should be Dar compared with Nairobi loading by trucks. The quantum of the incentive came to $60 per cubic metre. This incentive would apply on diesel and petrol only since Kerosene has no major supply problems given the low consumption.
The Uganda Government was requested to negotiate with the Kenya Government to scrap the VAT charged on services when Ugandan companies load in Nairobi. All Ugandan Oil companies requested to be freed to load in Nairobi and Mombasa in view of the continuing low capacity in Western Kenya.
The companies with storage facilities in Nairobi and Mombasa agreed to extend loading facilities to the small companies to increase on supply.
Companies with railway access were requested to assist other importers into Uganda to offload the wagons or accept wagons in exchange of trucks.
Due to the urgency of the matter, the Government sent another reminder to Government of Kenya on December 31, 2010 and the entire proposal was accepted in the reply sent back to our energy ministry in February 2011. Supply to Uganda since then has been stable.
With such a backdrop, it is wrong for any right thinking Ugandan to mobilise others to demonstrate without demanding to know what has been done so far. Hopefully, we shall educate others who may not get this information so that they are not misled.
The author is a researcher
THE suburbs of Kampala have experienced disruption by the opposition protests against increased prices in fuel and hence food and transport. The Police on the other hand has made it clear that no demonstration will go on because the law mandates them to keep law and order.
The Police cannot let demonstrations go on unnoticed. The obvious question on the mind of the Inspector General of Police is the motive for the demonstration. The opposition simply wants to discredit the Government.
If I were one of the ring leaders in the demonstrations, I would pick on some of the radical leaders disguising themselves as NRM to join in the struggle and also entice some of the civil servants and the middle class to walk to work. In that case it would appear like a national issue other than a ‘V’ finger flashing group.
Note that many Ugandans including foreigners have invested a lot of money in the economy on the assurance by the Government that there will never be a replica of the Amin era.
Attempts by anyone to demonstrate, in my view will escalate the problem in the economy.
As such the business community should wake up and resist any attempts by demonstrators to pull down their businesses. Violent exchanges between the Police, army and demonstrators forced many businesses in Kampala, Jinja, Masaka, and Mbarara to close for fear that their property would be stolen or destroyed.
What Ugandans should be doing now is to pray and bind in the name of God what the world has preferred to call the oil curse. Indeed it is a blessing to discover oil within our boarders, but who knows, many are silently and cunningly watching like a hyena. He who has oil controls the world and when he sneezes the world catches a cold only if the sneezer is a force to reckon with.
But who is to blame for the inflation or the rising fuel and food prices?
The current inflation rate figure is not the worst that Ugandans have witnessed in the recent past. In the month of February 2009, Uganda’s inflation rate shot to a record high of 11.9% at the height of the ripple effects of the global financial crisis.
The annual food price inflation alone increased to 23.7% in March 2011 compared to the 8.9% figure that was recorded in February 2011. Prior to this, there had been a steady rise of the country’s price levels for the last six months due to draught.
The Government takes the blame for not spending a lot on agriculture since it is the backbone of our economy.
Infact the current rate of inflation is already forcing banks to revise their lending rates upwards and some have in the past few days increased their prime lending rates from 15 to 17.5% and 18.5% to 19.5% respectively which certainly is a burden on the borrower.
Last year, fuel interruptions became rampant in September when we had inadequate supply for three weeks.
The majority of oil marketing companies operating in Uganda import their products through Mombasa and would ideally truck the product from Western Kenya whose pumping capacity is too low to satisfy the demand.
This situation will remain so until the expansion of line four terminating at both Eldoret and Kisumu is complete, probably at the end of this year. Oil marketing companies’ are now forced to alternatively load from Mombasa and Nairobi.
Is government doing enough?
Efforts to address the supply problems have always been in place, but following the September 2010 supply crisis, the Government has been doing everything possible to avert the problem.
For example, the Permanent Secretary in the Ministry of Energy led a delegation to Kenya and met with the Government of Kenya officials to find ways of increasing supply to us and also to look through the causes of supply interruptions. All these efforts point to one thing, the Government is not sleeping, but doing everything within its means to address oil supply problems to Uganda.
On reporting back home, the Permanent Secretary Ministry of Energy invited all oil marketing companies in Uganda for a meeting on October 12, 2010 where an Interim Supply Coordination Committee was appointed to jointly advise Government in addressing supply problems to Uganda.
This committee was balanced and it comprised a representative from Ministry of Energy and Mineral Development, Uganda Revenue Authority, Uganda National Bureau of Standards and representatives of the Oil Marketing Companies.
The Committee met twice and made a brief to the ministry with the following recommendations in line with:
Due to the urgency of the matter, the Government sent another reminder to Government of Kenya on December 31, 2010 and the entire proposal was accepted in the reply sent back to our energy ministry in February 2011. Supply to Uganda since then has been stable.
With such a backdrop, it is wrong for any right thinking Ugandan to mobilise others to demonstrate without demanding to know what has been done so far. Hopefully, we shall educate others who may not get this information so that they are not misled.
The author is a researcher