Kampala, Uganda | THE INDEPENDENT | The Ministry of Finance, Planning and Economic Development has launched the 2024/2025 national budget process, with the aim of growing the economy by at least 6 percent during the year and 7 percent in the medium term.
The Theme for the next budget remains the same as the one for the current year: “Full Monetization of Uganda’s Economy Through: Commercial Agriculture, Industrialization, Expanding and Broadening Services, Digital Transformation, and Market Access”.
It comes at a time that the country is experiencing some uncertainty over the growing differences with development partners led by the World Bank, which has announced the suspension of new loans over human rights concerns.
Finance Minister Matia Kasaija said the plans will be achieved through “a shift from a raw material to a manufacturing and knowledge-based economy by improving the environment of doing business in Uganda and making it more competitive.”
Speaking at the opening of the Prime Minister National Budget Conference 2024/25, Prime Minister, Robinah Nabbanja said the government, with the support of Development Partners, the Private Sector, and the Civil society ‘has put in place the environment and key interventions to drive the desired economic growth.”
“As we start the planning and budgeting process for the financial year 2024/25, our task is to ensure we are all committed to the efforts of lifting the 39 percent of the population from the subsistence economy to the money economy,” she said.
She stressed the government’s commitment to continue to guarantee peace and security as well as ensuring the protection and promotion of fundamental and other human rights and freedoms.
“Working through the Parish Development Model, Emyooga, provision of financial services through the Microfinance Support Centre and other village-based technologies such as the Nyakana model, we shall be able to create more jobs and wealth,” said Nabbanja.
According to the Ministry of Finance, the preliminary domestic revenue is projected to increase to 29.958 trillion Shillings the next financial year from the current year’s target of 29.672.3 trillion, while the total resource envelope projection amounts to Uganda’s 52.72 trillion.
While the external sources of budgetary support could further reduce, the government is also putting in place and implementing strategies to reduce the public debt stock through reduced borrowing, going for more concessional as opposed to commercial loans as well as increasing domestic revenue mobilization.
Currently estimates show that the nominal stock of the public debt increased from 78.833 trillion shillings (21 billion dollars) at end June 2022 to 86.78 trillion (23.6 billion) at end June 2023, according to Minister Matia Kasaija.
He says the budget for the year 2022/23 achieved “tremendous progress” in light of recovering the economy from COVID-19 impact, growing at 5.5 percent compared to 4.6 in 2021/2022.
This was better than the average Sub-Saharan Africa growth rate of 3.6 percent estimated for the calendar year 2023.
Kasaija said the next budget will focus on building an integrated, independent, and self-sustaining economy through ensuring security, good governance, and the rule of law, maintaining macroeconomic stability, boosting household incomes through the Parish Development Model, and commercialization of agriculture.
Other areas are the oil and gas and petrochemical industries, the mineral sector, investing in tourism supporting private sector growth, and investing in human capital, among others.
The government plans to continue investing in Science, Innovation, Research and Development, Digital Transformation, and Automation of the Economy and Public Sector effectiveness and Accountability, especially by addressing factors of production line capital, land, labor, and entrepreneurship as well as climate-smart agriculture.
“We have put aside 354 million dollars for mechanization, multiplication and research, scaling up small scale solar power use among others,” he said.
He also gave an account of what the government has done in response to the concerns raised by leaders including the civil society in the last budgeting process.
These included rationalisation of government ministries, departments and agencies, increasing domestic revenue, and managing debt among others.
In his statement read by Prime Minister Nabbanja, President Yoweri Museveni insisted that the PDM will do the magic to transform the communities livelihoods.
The civil society leaders present hailed the government on the way it had steered the economy through the shocks last year when countries experienced high inflation rates.
Uganda’s highest-recorded rate was 10.3 percent and is currently the lowest in eastern Africa at 3.5 at the end of August 2023.
However, Julius Mukunda raised concerns about the continued clashes between government agencies which he said was costing the taxpayer, calling for closure coordination.
The goal of the Strategy is to accelerate economic growth by at least 7%, through a shift from a raw-materials based to a manufacturing and knowledge based economy.
We must work together with all of your stakeholders to build an independent and self-sustaining economy.
For economic growth, the budget for FY 2024/25 will focus on building an integrated, independent & self-sustaining economy through Ensuring security, good governance & rule of law, maintaining macro-econ stability, Commercial Agric, Developing the oil & gas industry.