Moses Byaruhanga
14 April 2008
opinion
There are reports that prices of commodities including food have been rising. Prices of imported commodities have been affected mainly by the situation in Kenya. We import a lot of commodities from Kenya and with the recent turmoil in that country, inflation is reported to have gone up (over 10%) thus affecting the prices of the goods we import from there.
Further more, the Kenya situation led to the increase in fuel prices which affect prices of many commodities, hence the rise in prices. The Kenyan question is not yet resolved as only last week we read about reports that due to failure to agree on cabinet posts, there was chaos in Nairobi and some parts of the railway line that comes to Uganda were removed.
That will affect rail transport between Mombasa and Uganda. This might as well affect other prices of goods imported through and from Kenya. Until the fuel prices rise again or we suffer a fuel shortage like what happened early in the year that is when we will remember procuring fuel for oil reserves as an emergency. The procurement was started on and a contract awarded to the best bidder.
However according to press reports the procurement was stopped for reasons not occasioned by the company that won the contract where whoever wanted to bid participated and the contract was awarded on merit. Any way when and if fuel prices shoot up, that is when the minister responsible will be asked why there is no fuel in the reserves to mitigate shortages. I hope the rule of law will prevail on prejudices in regard to the said procurement.
On food prices, apart from the effect of increased oil prices, normally food prices rise during the planting season. That notwithstanding the increasing food prices are good. Why? Other factors remaining constant, Uganda is now a food basket for the region.
A lot of Ugandan food is being exported to southern Sudan, DRC, and Kenya. For Kenya the food exports from Uganda are bound to increase as the most fertile part of Kenya was the one which was most affected by chaos in that country and many are still displaced, some in Uganda while some are within Kenya.
The likelihood is that agricultural production might fall calling for food imports from Uganda and other countries. Apart from the regional market which is impacting on the local food prices, the world food prices are experiencing an upward trend. This is good for the Ugandan farmer.
The writing is on the wall that the demand for agricultural commodities has increased. Meat prices in Kampala had gone up as a result of the cattle in Uganda being shared between the Uganda and the Sudan market. Almost everything goes to Juba these days from locally manufactured goods including mineral water, to unprocessed farm produce.
In short, increased prices are good for the Ugandan manufacturer and farmer. The challenge now is for the planners of the economy to ensure increased agricultural production and Naads comes in handy.
The writer is special presidential advisor on political affairs
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