Museveni full address: Why government won't intervene amid rising cost of living

The Ugandan government will not intervene amid an outcry over the rising cost of living.

President Yoweri Museveni, in a televised state address on Sunday night, said government subsidies or removing import taxes would collapse the economy.

As we speak today, many of these challenges have been handled. Indeed, many Ugandans may have even forgotten about these problems. Where are the locusts? Where are the floating islands, etc.? Of all these problems, the Covid-19 pandemic, was the most challenging. Why? It was because, after a quick but careful analysis, we saw that the pandemic could, indeed, be handled but with massive lockdowns, starting with the unprecedented sending home, prematurely, of our 15 million grandchildren (the learners – pupils, students) in the primary schools, the secondary schools, the tertiary Institutions and universities and keeping them there for one and a half years. I do not think that this figure included the pre-primary pupils. No sooner had the pandemic confronted us, than the “struggle between the two lines”, to use Mao Tse Tung’s words, started.

In 1986, as we were beginning to deal with the catastrophic situation of shortages that had characterized Uganda for 14 years, starting with the 1972 mistake of Idi Amin expelling our Asian business people, there was talk by some of price and rent control. In one Cabinet meeting, we were informed of an Indian known as Gandesha that owned many buildings in Kampala and was charging exorbitant rents. Some were saying that we should invoke the Rent Control Act and the Government should set the rent levels itself. After careful analysis, we rejected that logic. The solution we adopted, was letting rent-levels remaining high for that time. This would attract many people to invest in housing. It is that flooding into housing, that would solve the problem of high rents by making rentable buildings many. That is how the huge growth of buildings in the Kampala – Entebbe – Wakiso – Mukono area, was triggered. Within a year or two, I started hearing of there being so many houses for rent, that many of them had no People to rent them.

Straight away, a serious problem solver, would cluster the commodities with high prices into two clusters: the imported ones on the one hand and the locally produced ones on the other hand. Some of the ideas people think about when confronted with high commodity prices, are the idea of subsidy (Government okutu kwatirako) or removal of taxes by Government from those commodities. With imported commodities, this is a recipe for disaster. It will lead to collapse. Why? Let us take the example of petrol. A litre of petrol before the rise of prices in November 2021, was UGX4,590 which meant USD 1.3 at that time. A litre of petrol is now UGX 5,500 which means USD 1.48. This is all with the tax. The more expensive litre of petrol (ey’obuseere), is doing two bad things: emptying the pockets of the consumers, but also emptying our national dollar reserves. We now have USD 4.5 billions in our Reserves.

Actually, in my opinion, the only, really serious, vulnerabilities for Uganda, are two: continuing to depend so much on rain-fed agriculture and the damage to our incomparably good environment by encroaching on the wetlands (ebisharara, ebitoogo), Lake Shores (emyegyeego), river banks (enkuungu), forests and steep gradient mountain cliffs (ensa). I have agreed with both the Ministries of Agriculture on enhanced irrigation and with the Ministry of Environment on restoring our wetlands by promoting fish-farming on the edges (emiiga) instead of drying them with swamp rice growing, restoring the forests, etc. We should even agree with the Coastal Countries (Kenya and Tanzania) on, possibly, using nuclear energy to desalinate sea-water as an insurance in the face of the erraticness of the rain caused by the sabotage by the mistakes of global mistake-makers.

Museveni full address: Why government won't intervene amid rising cost of living

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