As an immediate solution to skyrocketing prices, President Museveni has reiterated that government will not consider reducing taxes or subsidizing goods.
President Yoweri Kaguta Museveni has reiterated that government will not consider reducing taxes or subsidising prices of goods as an immediate solution to the skyrocketing prices.
Museveni made the remarks on Wednesday during a televised address to the nation.
He said subsidies would mislead the people to over buy and consume a particular item without economising which would in the end inflate the country.
“Me as a rebel, when I see this situation and I say, we must migrate to something else, not subside…Because when we subside, people will continue buying more and more. You will create an artificial comfort to the people for them to think things are normal when they aren’t normal and you do that by bleeding yourself,” Museveni said.
In addition, he said the subsidies will lead to the encroachment of the foreign reserves, which are $4b, and then create a situation similar to what is in Sri Lanka.
In Sri Lanka, the country’s foreign reserves dropped because they couldn’t import fuel and other necessities, prompting protests and the fall of the government.
Museveni said it is better to continue buying commodities expensively than facing a shortage. He said shortage of tax collection will also stall development projects.
“There is a difference between high prices and a shortage of commodities, so which is better? In this situation, the biggest challenge is that we can no longer have plenty.
Taxes are meant for development. We want to build new roads and other projects and when we cut taxes or subsidize commodities, the projects are stopped and money is taken for eating and buying fuel to drive cars,” he added.
Meanwhile, commodity prices have continued to shoot up in the recent weeks with a litre of petrol now being sold at about sh6,600 from the previous sh3,800 while that of diesel is sh6,400 from Shs3,400.
Advising the country, he said people should take his earlier advising of buying alternative products that are being manufactured locally because these are even cheaper.
On fuel, he said it is in government’s plans to see Uganda switching to the use of electric cars in favor of those that use fuel.
“We should plan for electric cars. It is something we should go for. We made the Kira EV bus. Engineers have told me need shs20 billion to manufacture more. Instead of spending on subsiding mistakes, we would rather use it to get out of mistakes,” Museveni suggested.
“Electric vehicles are cleaner; don’t have pollution, cheaper and less maintenance costs. This pressure to spend little money we have on problems, we would rather use it to get out of problems permanently. The long term solution is the electric car and trains,” added.