Before the outbreak of COVID-19, the government had projected the economy to grow by 6.3 per cent, but this was disrupted when Uganda and its trading partners shut down their economies, virtually halting most of the economic activities.
The Ugandans economy is
projected to grow by 3.1 per cent this financial year, according
to the Ministry of Finance, Planning and Economic Development.
Before the outbreak of COVID-19, the government had projected the economy to grow by 6.3 per cent, but this was
disrupted when Uganda and its trading partners shut down their economies,
virtually halting most of the economic activities.
Although the projected growth is on
the lower side of the forecast made by the Central Bank at its February 2021 Monetary
Policy Committee sitting, of between 3.0-3.5 per cent., it is slightly higher than
the 2.9 per cent growth posted in the previous year ended June 2020, when the economy
expanded to 138,841 billion Shillings (USD 37.4
Finance Minister Matia Kasaija, like
the Central Bank, put hope for faster rates of development in the coming years,
on how well the country manages the pandemic especially through vaccination, and
whether the country will experience more waves. He was launching the
National Budget Week, a series of events aimed at creating awareness about priorities of the budget and the opportunities it presents to Ugandans, giving more information and
clarification on key issues and concerns raised by the Public.
It is also part of the
Budget Transparency Initiatives that enable the government to interact with
citizens on budget-related matters. Previous budgets have been
affected mainly by the reallocation of resources along the implementation of
already approved expenditures, otherwise called supplementary budgets.
The Chief Executive of the Civil
Society Budget Advocacy Group, Julius Mukunda, says this indiscipline must stop
if the budgeting process is to be meaningful for the development of the
country. He also urges the government
to take the National Budget Month seriously for the good of transparency and
fight against corruption, not as a ritual.
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The FY 2021/22 National Budget
will focus on interventions aimed at sustaining recovery from the socio-economic
setbacks caused by COVID-19 and other domestic shocks, according to Kasaija. These include the locust invasion and floods,
as well as external shocks such as supply disruptions caused by lockdowns the world over, and
trade barriers that affected the export of some commodities.
The budget strategy prioritizes investment in
Public Infrastructure and supporting the private sector to increase production
and productivity plus interventions to address the health impact of COVID-19.
“Arising out of this Budget
Strategy for FY 2021/22, we are projecting a growth rate of 4.3 per cent, up from the projection of 3.1 per cent for this Financial Year
2020/2021. This is based on the
assumption that the negative consequences of the pandemic will subside with
COVID-19 vaccinations and other clinical trials,” Kasaija says.
The growth rates are
expected to reach levels of between 6.0 per cent to 9.0 per cent in three to five years, as
more economic activities are expected to boost demand, fruits of ongoing public
infrastructure investments as well and the oil and gas development. Kasaija is particularly
excited about the prospect of the oil and gas sector and its impact on job
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According to the budget strategy, major
allocations will be to Human Capital Development, sectors like health and
education, taking 7.766 Billion Shillings,
followed by governance and security with 6.968 billion Shillings. Integrated Transport Infrastructure and
Services will take 5,070 billion Shillings, while agro-industrialisation takes 1,688 billion Shillings.
But in the meantime, Kasaija urged Ugandans and the
business community as a whole to pay taxes so that the country reduced on its
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The debt level is projected to stand at 52 per cent of the GDP next
financial year, a level considered dangerous for poor countries like Uganda.