Dec 4, 2022

Mawazo Writing Africa

Writing about the main

High fuel, commodity prices dampen Museveni’s first year in his sixth term

The high cost of living, a growing budget deficit, corruption and uncertainties about growth continue to weigh on Ugandan President Yoweri Museveni’s sixth term in office.

The president is expected to address the nation this weekend after the end of the first During his current tenure, he has been urged by business and the public to tame the escalating cost of commodities, particularly fuel, which has seen its retail price rise by over 70 percent over the past year.

The Last Time President Museveni speaking to the nation about soaring prices was Labor Day when he advised Ugandans to choose between buying bread and cassava.

Finance Minister Matia Kasaija urged the nation to take action foreseeing the worst said the government cannot intervene and/or cut taxes.

Household budgets and operating costs in Uganda sin d has risen sharply given the government’s stance of not granting tax rebates on fuel, making the economic recovery more uncertain.

Although the Bank of Uganda says the economy is recovering from the pandemic downturn, domestic growth weakened in March 2022 due to rising food and fuel prices.

Juliet Najjinda, head of taxation at PricewaterhouseCoopers Uganda, said it was time the government introduced fuel subsidies to drive down pump prices as the manufacturing sector feeling the heat.

“Leaving fuel prices to market forces is no longer acceptable,” Ms Najjinda said, adding that the government is between Ush1,200 ($0.33) and 1,300 Ush ($0.36) per liter of fuel.

Until the government provides specific funding, opposition MPs Cecilia Ogwal, Muwanga Kivumbi and Anthony Akol said the Greater north – Busoga, Bukedi, Teso, Karamoja, Acholi, Lango and West Nile – will continue to suffer.

“The country’s prospects seem to indicate that there are two countries in one; the greater north and south,” said Mr Kivumbi, the shadow minister for finance and economic planning. “If not addressed, it poses a threat to the country’s security and posterity.”

Corruption

Willis Bashasha, Director of Manifesto Implementation at the Office of the President , said they face challenges in implementing their policies.

“Corruption is our number one enemy. It affects the implementation of the projects,” he said.

Although the government has set up anti-corruption institutions, much remains to be done. A government inspection survey found that the country loses US$20 trillion (US$5.5 billion) annually to corruption in key government agencies and US$590 billion (US$161.7 million) to fraudulent procurement deals.< /p>

Report helped Parliament Question multi-million dollar single-source government contracts. Members have called on the government to cancel the deal that gives Uganda Vinci Coffee Company Ltd the exclusive right to buy all of Uganda’s coffee. In 2019, the same company was hired to manage the construction of the stalled Lubowa Specialty Hospital without going through a tender process. The government issued a promissory note in the amount of US$397 million.

The hospital received US$348 billion (US$95.4 million) in the 2021/2022 budget and in the 2022/2022 budget proposals/ An additional US$319 billion ($87.4 million) will be allocated to the project in 2023 before the Finance Committee.

The political financial watchdog Alliance for Financial Monitoring says single sourcing appears to be synonymous with large-scale procurement deals.< /p>

“That makes It is by far the most expensive hospital to be built in Uganda compared to Kiruddu which cost Uganda $25 million. The Lubowa hospital project is about 16 times more expensive,” said Henry Muguzi, a lobbyist. “The lack of transparency in this procurement makes the process vulnerable to abuse. This is what is revealed in the case of Lubowa Hospital, which makes it the subject of financial crimes.”

The increase in administrative units is also putting pressure on the state budget. The 14 districts in the country in the 1960s have grown to 146 districts today.

Overstretched Resources

“Many resources must be expended to support the new units, which has repercussions delivery of services when resources are being stretched,” said Mr. Bashasha.

Uganda faces the persistent problem of a budget deficit given low domestic revenues.

“Over the past decade years Uganda’s tax rate has risen by more than three percentage points to around 12 percent. It stagnated at this level in the years leading up to the Covid-19 pandemic. Although revenues fell during the pandemic, the tax-to-GDP ratio held up well,” said Izabella Karpowicz, resident representative of the International Monetary Fund Uganda 0.5 percent of GDP per year.

She said that a further stagnation in revenue could push Uganda to borrow more or curb spending, including on priority spending. This would further delay the implementation of the Sustainable Development Goals.

President Museveni’s year has borne some good fruit, such as restoring ties with Rwanda, culminating in the opening of the border at Katuna. Rwandan President Paul Kagame visited Uganda last month to attend the celebration of General Muhoozi Kainerugaba’s 48th birthday. It was the first visit in four years.

Uganda’s engagement and cooperation with DRC forces to root out Islamist rebels from the Allied Democratic Forces who are destabilizing the region and killing thousands of people in the past two Decades – is also a positive act. The government has also started building roads in the DRC to ensure security, promote trade and open up new markets in the vast, mineral-rich country.

This year President Museveni also hosted Mozambique President Felipe Nyusi and the two countries have pledged to increase cooperation on defense and security, immigration, agriculture, energy, oil and mineral development.