Economic Downturn in Uganda

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ECONOMIC DOWNTURN IN UGANDA In just one morning and prices of certain basic commodities are increasing. All of a sudden the gasoline meters at most gas stations are reading Ushs 3,920 per litre, a considerable rise from the Ushs 3,150 consumers had got accustomed to for a while. A few days later it makes it to Ushs 3, 980 and Ushs 4,000 in some places! Sugar which had been stable at Ushs 2,400 for some time has also made it to Ushs 7, 000 within days! Such was the situation mid last year when things took a turn for the worst. “What had happened?” one would ask. There was this economic crisis that had started out there and it had spread its tentacles to Uganda. What had caused it? Anyway, government said it had been caused by high international fuel prices and temporary food shortages. The recent global economic crisis therefore presents further challenges for the economy which, if not mitigated, may slow economic growth and exacerbate these ills. It was originally thought that Uganda would not suffer from the financial contagion on account of the limited linkages of its financial system to the global financial system, but the signs are that the impacts have already been felt. What else had it caused apart from just the increases in the prices sugar and fuel? Realistically speaking, some effects of the economic downturn in Uganda were: an increase in the standard of living, increased levels of public dissent albeit expressed in various ways, increased reliance on donors and increased income for the local farmers. 1. One of the main effects of the recent economic downturn in Uganda is an increase in the standard of living. * There was a rise in the price of fuel and this led to hiking of taxi and bus fares. As a result, commuting to work and travelling became expensive for ordinary citizens. Some people opted to walk to work; they had no choice. Perhaps this
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