KAMPALA — Hon. Karim Masaba, MP for Industrial Division, Mbale City, has called for urgent Government intervention to cushion traders and consumers from the effects of the rising US dollar and its impact on the cost of imported goods.
Speaking in Parliament under a matter of national importance, Masaba said he had received numerous concerns from traders who are already feeling the effects of the weakening shilling and rising exchange rate.
He explained that a stronger dollar increases the cost of imported goods, putting additional pressure on importers and ultimately pushing up prices for consumers. He urged the Minister of Finance to appear before Parliament and provide an account of the measures being taken to address the situation.
Masaba particularly raised concern over the exchange rate used by the Uganda Revenue Authority to calculate taxes on imported goods based on their Cost, Insurance and Freight (CIF) values.
He said traders whose consignments are already in transit face a difficult situation because some purchased their goods when the exchange rate was lower but could now be subjected to a higher rate when their taxes are assessed.
The legislator therefore appealed to the Uganda Revenue Authority and the Ministry of Finance to consider maintaining the earlier exchange rate for goods that had already been purchased and were in transit before the sharp movement in the exchange rate.
Masaba also drew Parliament’s attention to Uganda’s foreign exchange reserves, which he said had risen to about US$6.5 billion. He questioned whether part of the reserves could be used to help stabilise the shilling and reduce the pressure being experienced by traders.
He further questioned the decision to increase the cash reserve requirement for commercial banks, arguing that Parliament should be provided with a clear explanation of how the measure is expected to address the current foreign-exchange pressures.
Masaba urged Government to pursue practical measures that protect businesses and consumers from the immediate effects of exchange-rate volatility, saying the concerns raised by traders require timely attention from both the Ministry of Finance and the Bank of Uganda.
