As the government of Uganda moves to ensure attainment of the middle income status by the year 2020, State Minister of Finance for Planning, David Bahati has revealed that country’s economy is steadily progressing.
Currently Uganda’s population growth rate is 2.8%, and it is projected to be about 41million by 2020.
The economy will therefore need to grow from the current USD 25.7billion to USD 42.3billion by the same period which calls for, according to the Minister, swiftly dealing with the challenges the country faces today in order to achieve faster growth.
Bahati, speaking Thursday morning at the Kampala Serena Hotel, where he was representing the Line Minister, Matia Kasaija, to unveil the Budget Strategy for FY 2018/19, revealed that the government has already tested its potential to achieve the target.
“Our resilience was tested last FY 2016/17. Economic growth was at 3.9%, below the NDP II expected average of 6.3%. Slowdown in growth had strong links to constraints to private sector growth and adverse weather that negatively affected outputs, and consequently incomes and consumption of majority of households,” he said.
In July 2017, the headline inflation dropped to 5.7% from 6.4% in June 2017, majorly because of reduction in food price inflation from 18.1% to 12.9% during the same period.
Business Tendency Index improved by 2 percentage point to 55.6, well above the threshold of 50. And, the rate of NPLs fell from 10.7% in December 2016 to 6.3% in March 2017.
The above figure figures indicated pick-up in the economy.
The proposed budget strategy majorly aims at among others increasing production and productivity in agriculture and incentivizing industrialization ensuring preparedness to deliver first oil by 2020.
It will also focus on harnessing tourism potential; mindful of the urgent need to promote environmental protection, efficient urbanization, equity and socioeconomic inclusion of those at the bottom of the economic ladder.
In order to stick to the development path, Bahati further said, there was need to “put in place required infrastructure needed to fuel industrialization and productivity enhancement.”
East African Community members have adopted a common budget theme for the medium term, which is Industrialization for Job Creation and Shared Prosperity.
Achieving middle income status by year 2020, the Minister stated, would necessitate tackling the current challenges to growth and making good the opportunities available to us.
He listed them as; Inadequacy/absence of Policies to guide Implementation of Government Plans, Poor Coordination and institutional weaknesses, Delays in project execution attributed to weak Public Investment Management, Decline in Agricultural Production and Productivity, Constraints to Private Sector Growth and Macroeconomic Challenges.
Despite the challenges, the Minister revealed, that there were also opportunities that could be taken advantage of, and these are; Investment in the Petroleum Sector, optimizing current Revenue base to generate more Revenue, Strengthening Public Investment Management (PIM) and Improving economic Inclusion of the Marginalized.
Below is the full statement on Budget Strategy for FY 2018/19