Last Friday on press conference the Trade and Industry minister Amelia Kyambade announced that the government had set a maximum price of UGX 5000 for a kilogram .
Despite that statement sugar prices have continued to sky rocket in some areas reaching shs 9000.
Cox media Ug research has unveiled the following reasons which among other include the following;
Uganda operates a mixed economy
but largely the prices of goods and services are determined by market forces of demand and supply which rendered the maximum price set 'a joke'. The shortage of sugar has influenced its high prices but what remains unclear is why a shortage at this time.
Conspiracy theories such as hoarding to create artificial scarcity, importing of sugar to other countries to earn more profits or blackmail against the government have all sprung up.
Many people especially politicians have suggested importation of sugar from countries like Brazil where it is cheaper and automatically would lead to lower prices in the domestic market .
Many citizens would view it as a better alternative and cheaper option ,Research by cox media Ug shows that this will only be a short run solution as this will lead to the collapse of the sugar producing factories in Uganda as a result of increased competition from imported sugar. As a developing country there is need for protectionism to some extent to ensure growth and development of the domestic industries.
At a moment there is a need to diagnose and identify the root causes of the shortage other than opting to import sugar or setting a maximum price which kills investors iniatives not only in the sugar sector but across the entire sectors of the economy.
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@twinphile
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