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Thursday, October 6, 2022

It’s Global: Economic Crisis Not Isolated to Uganda

Uganda like any other country has been affected by the rising commodity prices as a result of increased fuel prices due to the Russia-Ukraine war. Some nay-sayers have been painting a picture that only Uganda has had an increase in cost of living but this is far from the truth.

The economic crisis was dubbed a ‘Global Economic’ crisis because it is worldwide.  In fact, Uganda is doing much better than most countries elsewhere and an example is Sri Lanka.

The once relatively wealthy Sri Lanka is now suffering economic crisis with shortages of everything, from medicines to gas.

People have resorted to cooking with firewood as the country’s economy burns.

A country that used to be in a middle-income status with GDP of $84 billion according to the World Bank, comparable to the Philippines and living standards that would envy the neighboring India, is now in shutters as the Government runs out of dollars to import fuel.

Due to the outbreak of Covid-19 pandemic, most of Sri Lanka’s leading economic activities were affected. The country could no longer export her agricultural produce as well as the vital tourism industry registered the lowest number of tourists since most flights were suspended.

As a result, the nation has run out of dollars needed to pay for most of the imports and the inflation has increased to 60%. Over 80% of the population cannot afford meals.

Prime Minister Ranil Wickremesinghe, on Tuesday admitted that the country is facing its worst economic crisis in decades leaving millions struggling to buy food, medicine and fuel.

Closer to home in Kenya, Tanzania and Rwanda, the economic situation is worse, with hiked food and commodity prices and cost. This has led to starvation in some parts of these countries and has led to demonstrations in countries like Kenya where demonstrations are ongoing in Kisumu.

However, Uganda is doing a lot to combat the economic crisis amidst COVID19 recovery.

According to Mukami Kariuki, the World Bank Country Manager for Uganda, the rising commodity prices and the overall increase in cost of living has caused new risks to people’s livelihoods that had just started recovering from Covid-19 effects.

In a bid to manage this situation, the Government is adopting targeted and accelerated vaccination efforts against COVID-19 in order to avoid another lockdown which could worsen the economic crisis.

Additionally, Uganda is managing debt through fiscal consolidation agenda and tightening the rising inflation by Bank of Uganda increasing its key policy rate by 1% making it 8.5%.

Uganda is also managing the crisis by strengthening revenue collection and preparing good projects like the Parish Development Model and Emyooga in order to improve people’s livelihood with an effort of ensuring that they are efficiently funded, implemented, maintained, monitored and evaluated.

The economic crisis has taken the world by storm but the flexibility of the Ugandan government has shielded citizens from worse economic situations.

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