Jaluum Herbert Luwizza, a business consultant and Founder of Young Treps believes that the Government has the power to regulate prices of essential goods to avoid exploitation of citizens, a move that it is yet to exercise.
Since the beginning of March 2022, there has been a public outcry over the drastic increase in prices of essential commodities such as soap, cooking oil, sugar, rice, matooke and posho, among others that have left the average citizen struggling to provide for and sustain their families.
Essential products such as a bar of laundry soap increased from 4500 shillings to 9000 shillings, cooking oil from 5000 a litre to 9000 shillings, and even 10,000 or 11000 shillings depending on the district. This meant a 21 percent rise in the price of cooking oil between December 2021 and February 2022 and a 20 percent increase of soap prices from December 2021 to February 2022, a period of just 3 months.
While appearing on RX Radio’s Brunch Talk with Olive, Luwizza acknowledged that prices for essential goods have increased due to soaring fuel prices globally and the interfered supply due to the Russia-Ukraine war. In the US, he gave an example of a barrel of fuel increasing from 4 dollars to 7 dollars, justifying that with Russia being one of the world’s largest producers of oil and now at war, the supply has reduced hence the increasing demand resulting in the prices skyrocketing upwards.
However, locally, he said that the tax regime has influenced the increase in prices of commodities, a burden that is levied on the final consumer since oil that runs all other manufacturing industries is imported. But in his opinion, the Government can regulate the prices of commodities, despite the presence of a free market economy.
“A government that cares about its people should get on top of things because at the end of the day, such issues can cause unrest. We've seen it in Sudan where things can get extreme especially when it comes to food,” he said.
Luwazza continued, “The Government could create some form of subsidies; for example the ones being imposed on the prices of bread in Egypt since Egypt imports its bread from Russia and with food, the taxes being levied on products like sugar and soap could be dropped in the meantime,” he said.
He further proposed that the Government reduce its expenditure and allocate the money into more vital income-generating prospects.
“From my observation, the Government’s operational budget increases every year and the reaction of the state is to increase taxes as a way to collect more of what is needed to spend. So because we have very many unnecessary operational costs, advisers, cabinet members and MPs, I think it's common sense not only from a government point of view but also from a personal point that when your income is not increasing, you find a way of reducing expenses and spending more money on the necessities.”
He further advised the Government to adopt measures that will control the country’s free market economy as well as a stopgap solution to minimise expenses such as merging ministries that execute duplicated work and injecting more funds into fundamental sectors such as infrastructure that can enhance transportation of products and ease access to services.
Luwizza gave the same advice to individuals to minimise expenses during this time of spiking inflation rates depending on what is favourable to each, given their different priorities.
Meanwhile, the Uganda Bureau of Statistics posited that the increase in prices of essential commodities pushed Uganda’s inflation rate to 3.2 percent from the 2.7 percent registered between December 2021 to February 2022. Prices of cooking oil have registered the highest rise in the last one year by 77.6 percent, and laundry bar soap by 47.8 percent in the same period. Consumer price index for February 2022 increased to 3.2 percent from 2.7 percent in January 2022.
Brunch Talk is hosted by Olive Najjuma Monica every Saturday from Midday to 1pm on RX Radio.