KAMPALA – The Minister of Finance, Planning, and Economic Development, Matia Kasaija, reiterated during the Budget presentation Day that the country’s economy had grown by 5.5 per cent in the current financial year surpassing the 2021/2022 rate.
Kasaija who presented the 2023/2024 Budget at a sitting of Parliament presided over by Speaker Anita Among on Thursday at the Kololo Ceremonial Grounds, said that the economy had reached Ugx184.3trn compared to Ugx162.9trn the previous financial year.
The minister stated that despite initial challenges, the services sector experienced a growth rate of 6.2 per cent while Agriculture grew by five per cent.
He added that the industries saw a growth of 3.9 per cent, driven by manufacturing and construction activities, particularly in the oil and gas sector.
Regarding inflation, Kasaija highlighted a steady reduction due to coordinated fiscal and monetary policies. He stated that inflation decreased from as the government implemented measures to combat inflation, including an increase in the interest rate to 10 per cent, resulting in a slight rise in commercial bank lending rates.
To support the private sector, government reduced domestic borrowing and provided affordable capital through initiatives like the Uganda Development Bank, Emyooga, the Agricultural Credit Facility, and the Small Business Recovery Fund, totalling Ugx2.77trn.
Kasaija said that Uganda’s exports of merchandise goods increased to $4.2bn driven by export of gold, coffee, fish, sugar, beans, maize, and light manufactured products. Kasaija also announced a $200m investment secured from the World Bank to support Small and Medium Enterprises in the manufacturing and export sectors.
According to Kasaija, next year, Wi-Fi will be deployed to 820 locations, targeting schools, hospitals, markets in the selected sub-regions.
“The Greater Kampala Metropolitan Area network will be upgraded to monitor service provision over the national backbone infrastructure. We will also digitally transform public service delivery by connecting all essential services, such as schools, hospitals, tourism sites, and the police to the national backbone,” he said.
In terms of healthcare, Kasaija highlighted government’s efforts to upgrade health facilities and build new ones.
An allocation of Ugx22.6bn has provided to clear outstanding arrears for medical interns and senior house officers.
“Government will in the next few weeks resolve the plight of medical interns and doctors designated as Senior House Officers in view of their important role in supporting the healthcare system,” said Kasaija.
Kasaija addressed tax administration, regional integration, and public debt, emphasising cooperation among tax authorities, modifying taxes on goods imported from outside the East African Community, and maintaining debt sustainability.
The total budget for the Financial Year 2023/2024 amounts to Ugx52.7trn.
President Yoweri Museveni, later – through a video conferencing from State House – Entebbe – made remarks in regard to the budget –preaching value addition to improve economy.
Vice President, Jesca Alupo represented President Museveni at the Kololo function.
President Museveni reiterated that all efforts should be made to add value food and minerals to boost their market price.
The President listed coffee, cotton, timber, cocoa, gold, iron ore, copper, phosphates, maize and fish products as items that can improve the economy through value addition.
“By doing this, the economy will jump to $550bn instead of the mere $55.2bn projected from exported raw materials. If I process a kilogramme of coffee from bean to powder, I earn $40 instead of two,” said Museveni.
He added that industrialisation of products like sugar, recycling of steel products; soap manufacturing, beer, beverages and cement among others have an import substitution value of approximately US$3.6 billion and bring export earnings of US$1.6 billion into the country.
“Now that we have an educated work force, enough electricity, good roads and that we are building or repairing the railway system, every effort must be made to add value to all our products,” he said.
Museveni, however, noted that 39 per cent of Ugandan households have not yet transitioned into the money economy, and cited the example of Richard Nyakaana, an upcountry farmer whom he advised Ugandans to emulate.
He said Nyakaana’s farm that sits on 1.25 acres in Rwengaaju Parish, Kabarole District earns him Ugx172.8m annually from rearing cows and poultry, processing animal feeds and producing manure and gas for sale.
“Nyakaana now employs 15 people on his farm. If seven million one-acre farmers created a mere 10 jobs each, we would create 70 million jobs, more than the population of Uganda. Therefore, no games, delays or corruption by leaders and officials on the issue of value addition,” said Museveni.
The President observed that Ugx17trn of the Ugx52trn 2023/2024 national budget will go towards paying debt, and said the way forward is to borrow less or not borrow at all.
“In order to do industrialisation, we do not need to use government money. The strategy is to handle the private sector well because it can help us in industrialising our sector,” he added.