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Why Gov’t Has Refused To Give Subsidies, Reduce Taxes Amid Skyrocketing Commodity Prices

Ugandan President Yoweri Museveni has defended his government’s decision not to give subsidies or reduce taxes in the wake of a sharp rise in the cost of living.

He was addressing the nation in a televised speech on Wednesday night amid high fuel prices and food shortages in some parts of the country.

Mr Museveni said subsidies mislead people to think that there was plenty and would deplete the country’s foreign reserves.

He said tax cuts would also lead to the stalling of infrastructural projects.

Mr Museveni also warned that the price of fuel was likely to remain high even after the Russia-Ukraine war.

He said the way forward would be to begin the move away from petrol to electric cars and rail transport.

Mr Museveni urged Ugandans to explore a variety of other foods available like cassava, plantains and millet amid the high cost of wheat.

His stance is a sharp contrast against measures that other countries in the region have taken.

Neighbouring Kenya announced on Wednesday a fifth stimulus package on food subsidies to cushion its citizens against the cost of living, while the Tanzanian government announced a $43m (£36m) fuel subsidy in May.

In Uganda, the cost of fuel has shot up from $1 last year to $2 in some parts of the country. A kilogramme of maize flour is retailing at almost $1 from $0.47.

 

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