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Wednesday, 3 August 2011

Uganda’s Economy in Intensive Care



Sugar scarcity is hitting Ugandan market harder with prices shooting up in every part of the country, a situation that has been subjected to fluctuating production owing to inadequate raw materials and derisory electricity supply.

Sugar prices in leading supermarkets and groceries have doubled and a kilogram now goes for between Shs4, 800 to Shs6, 000 up from Shs3, 500 in April; not forgetting the three Kilogram per customer quarantine slapped on the commodity! I was shocked on Monday when a customer supervisor at Uchumi stores asked me to return the extra 2 Kgs I had picked, saying that the management was “portioning sugar to meet every customer’s needs!” This means that if you want to shop ten Kilograms of Sugar, you need to go with your wife, and at least two children so that each of you carries and pays for three kilograms of sugar!

It is sad to remember that the government, in its June budget announced 100% tax sever on sugar but since then, prices have increased by more than 50% as if it’s to quickly conform the criticism by economics who regarded the tax slash as inconsequential since the tax on sugar was 50UGX only and also that the prices of fuel; which is vital on all commodity prices was never catered for. Traders are now among other things pointing at the high transport cost to a main cause of many commodity price increments.

Sugar could be seen as opulence but its necessity can’t be downplayed, its continued scarcity will definitely impact on prices for bread and other final items in which sugar is an ingredient. According to the Daily Monitor (a daily newspaper in Uganda), several people in some parts of the country like Gulu are continually doing away with sugar because of the high cost, leaving the beverage to the sick and children.

This biting economic crisis is growing stronger and deeper yet the government has stubbornly continued with its indiscipline spending on big and unnecessary administration, used fighter jets, charitable donations on presidential foreign trips not forgetting billions lost to government officials in corruption deals. The problem seems to be just beginning, inflation at now 18%, no minimum wage in place, scornful unemployment levels…. The days of the past our parents used to tell us are ultimately and inevitably coming back….