BY LUCKY AGABA
Unemployment in Uganda continues to bite on Uganda’s most vulnerable as businesses and companies close over high fuel
prices. Uganda’s unemployment rate for 2021 was recorded at 2.94%, a 0.17% increase from 2020 and is expected to reach 3.10% by the
end of 2022, according to trading economics global macro models and analysts’ expectations. Joy Muhumuza, a resident of Lumuli,
Mukono district woke up one day to a hopeless world when she finally decided to close up her small mudala where she used to sell tomatoes,
greens, onions and fruits. Muhumuza says she had opened this business after end of lockdown when the economy opened. With only capital of Ugx 200,000, Muhumuza was able to start up her business and could finally afford a meal unlike the COVID-19 times.
She says she has been earning a profit of fifteen thousand shillings each day from her sales and could save ten thousand shillings, which later changed as prices went up. A hopeless and stress stricken 35-year-old woman says she later realised that a tomato, which she would buy at Ugx 100 and sell at Ugx 300 was now at Ugx 500 wholesale price. “At first, I thought I could work through it since the whole country is affected but I lost it when I one
day went shopping and bought tomatoes that stayed unbought for a week and half of them went bad.” Muhumuza says people gave up
on buying spices and opted for spiceless foods due to the high places. She saw herself close down when she realised her business was no longer moving and her capital could hardly make any profits to afford space rent. Like Muhumuza, many Ugandans are undergoing this terrible situation. Duncan Ahisibwe, an Uber driver in Kampala says he was forced to stop working when fuel rose to Ugx 6000 as he could hardly make enough for even domestic support. “I used to earn fifty thousand a day, I would save twenty thousand and the thirty would cater for my wife’s kameza money (money for home needs). However, I found myself not able to earn even ten thousand shillings.” Ahisibwe says this has impacted
on his family and relationship with his wife. According to Uganda Bus Owners Association-UBOA, of the over 80 operational bus companies in the country at present, not more than 60 are in operation. Some of the bus companies that have ceased operating include: Saviour coaches, Bwizi
coaches, Lyantonde coaches, Zahura coaches, Dk coaches, Horse coaches, Stairway 5 coaches on the western route and Gaagaa Enterprises Limited. During the FY 2021/22, government increased excise duty on fuel imports from Ugx 1,350 to Ugx 1,450 per litre of petrol. The tax on diesel rose from Ugx 1,030 to Ugx 1,130 per litre.
This sparked the beginning of fuel price increase in Uganda along other factors. Fuel being a major driver that moves all other sectors, its price rise automatically increased the cost of doing business and increase in the general price of
commodities all over Uganda. Fuel has increased since then, with a litre costing between Ugx 6000 and Ugx 8000 in different places. This is an average increase of Ugx 1400 from the prices during COVID-19 before the crisis hit in 2022. This situation has forced many businesses to close, leaving thousands of people unemployed, both large and small scale, adding on the already huge number of the unemployed in the country. Thaddeus Musoke, the chairperson of Kampala City Traders Association during their meeting in Kampala on 12th July 2022 said about 70 percent of their members are in deep financial crisis because the current economic crisis in the country is making them fail to service their
loans.
He revealed that most traders are chocking on loans because their sales and profitability is low due to the current economic crisis in the country. Traders say government should set up a special fund to save the collapsing businesses and also scrap off some of the taxes being levied on their goods and services.
During the national budget reading at Kololo ceremonial grounds in Kampala on June 14, 2022, Finance Minister, Mr Matia Kasaija said government will support farmers to grow more fast-maturing food and oil seeds to ensure sufficient domestic supply; maintaining a market-based determination of prices to support a continuous supply of the goods and services. He also said government tends
to create alternative fuel import routes across Lake Victoria to avoid possible unnecessary supply disruptions and using appropriate fiscal and monetary policies to mitigate the impact of price shocks.
During a parliamentary meeting on 12th July 2022, Mr Peter Lokeris, the State minister for Energy said government is focused on securing continuity of supply through Kenya and Tanzania and reiterated the government’s commitment to haul in fuel via Lake Victoria. However, Mr Patrick Oshabe (Kassanda North MP) noted that: “The reluctance of the minister on the fuel crisis shows he does not appreciate the magnitude of the problem. We are asking our government to advise Ugandans on what is going on. We needed to hear about our fuel reserves, what do we have? How long can we be in this difficult situation?” Mr Jonathan Ebwalu (Soroti West Division MP) also faulted the ministry for poor regulation of the oil dealers who he accused of hoarding fuel and forcing the prices upwards. The hopeless situation has left the public helpless and speechless.