By Duncan Abigaba
Lately, troche information pills http://chamberhealthcoop.com/wp-includes/class-wp-image-editor-imagick.php the public has been awash with myths and self-invented theories about the economy, mind http://confusedcoconut.com/wp-content/themes/default/images/header-img.php the depreciation of the shilling, remedy http://coachypnose.fr/wp-admin/includes/class-walker-nav-menu-checklist.php possible increase in the prices of goods and services etc. Some people even believe we could end up in the Greece situation.
However, we need to look at the major performance indicators of the economy. These include; economic growth rate, Gross Domestic Product (GDP), inflation, interest rates, Balance of Payments (BOP), foreign reserves, revenue performance, fiscal deficit, fiscal policy and public debt.
Uganda’s economy has been growing at various rates of 3.4 percent, 6.0 percent, 4.7 percent and 5.3 percent in financial years 2011/2012, 2012/2013, 2013/2014 and 2014/2015 respectively.
The economy is projected to grow at 5.8 percent in the 2015/2016 financial year and is projected to grow at 6.5 percent for the next five years.
The economy is valued at Shs. 75.183 trillion ($25b) and it is the 3rd largest in East Africa and the 17th largest in Africa.
In the ending financial year 2014/2015, inflation was kept at 2.7 percent from a record high of 11 percent in 2011/2012.
Even despite the weakening shilling, fuel pump prices have been kept at record low of Shs. 3,400 from Shs. 3,850 for petrol and Shs. 2,850 from 3,250 for diesel.
The Shilling has weakened majorly due to two factors; the strengthening of the US dollar against other international currencies we trade with and importing more than we export.
This is due to on-going works on Karuma and Isimba hydro power stations and other road works like the Entebbe Express Highway.
Interest rates have remained a bit high at 20.1 percent. This is majorly due to two factors; limited supply of long term capital in the economy and the lack of trust among the borrowers characterized by high default rates and non-performing loans.
Our balance of payments currently stands at negative as at March 2015. Our exports are valued at $2,701.6m whereas the imports are $5,048.9m.
This means our deficit has been standing at $2,347.3m. This is majorly due to the ongoing infrastructural investments in the oil sector, road works and hydro power stations of Karuma and Isimba.
Therefore, the increase in demand for foreign exchange to meet the import bill weakens the Uganda shilling.
However, in the ending financial year, this was mitigated by Foreign Direct Investment inflows of $1,200m and workers’ remittances worth $915m, reducing it to $232.3m.
However, this was not enough to close the deficit, resulting into a reduction in external reserves amounting to $266.5m. Nevertheless, our reserves remain healthy at $2,974m, equivalent to 4 months of future imports of goods and services.
Our tax collections are projected at Shs. 11.333 trillion 2015/2016 up from Shs. 9.799 trillion in 2014/2015. Domestic financing through treasury bills and bonds will fall from Shs.1.775 trillion in 2014/2015 to Shs.1.386 trillion in 2015/2016.
This is because government is redeeming its treasury bills and bonds worth 6.4 trillion. The increase in the tax revenue is majorly due to; improved tax policy measures implemented this year, improved tax base and expansion of the tax base.
Our domestic revenue to GDP ratio is estimated at 13 percent. Total expenditure is estimated at 18.6 percent of the GDP, lower than 22 percent within the EAC countries.
Domestic resources will finance 76.4 percent the 2015/2016 budget. Whereas the balance will be financed through concessional loans, grants and donations.
Our public debt is projected to reach $7.6b by end of 2015/2016. 60 percent of the debt is external while 40 percent is domestic. The increase in the public debt reflects the increased borrowing to finance infrastructure investment.
Although our public debt has increased faster compared to the past trends, it is sustainable in relation to the size of the economy. Measuring public debt in relation to the size of the economy is standard practice to know whether our debt is sustainable or not.
Using this method, our debt to GDP ratio is estimated at 30.4 percent, which is far below the Public Debt Management Framework 2013 threshold and the East African Community Monetary Union convergence criteria requirement of 50 percent. Therefore, our public debt remains sustainable and our economy isn’t under debt distress.
This has been confirmed by independent parties who undertake credit rating for Uganda, and the Debt Sustainability Analysis (DSA) conducted by IMF and World Bank.
Therefore, the Uganda shilling hasn’t singly weakened against the dollar. All our major trading currencies including the Euro and the Great Britain Pound have fallen against the dollar.
What we must focus on is to produce for export; this can mitigate the situation by bringing in foreign exchange to boost our shilling. But the economy is on track.
The writer is a Deputy Presidential Assistant in charge of Research and Information.
Presidential hopeful Amama Mbabazi has denied reports that his decision to rise and stand against President Museveni in the forthcoming elections was influenced by western powers.
When tasked to clarify on why he chose to speak to the western media including BBC and Voice of America immediately after declaring his presidential bid, page http://ctrdv.fr/components/com_k2/router.php the former Prime Minister said he can never be an agent of another individual or country.
“I am not an agent because they haven’t approached me. Mbabazi being an agent of another country in another country! That can never be, sick http://ciencialili.org/libraries/joomla/utilities/buffer.php ” said Mbabazi.
“We are in a global world and can’t live without others but I cannot be an agent. I can be with them for the interest of Uganda, viagra buy http://clintonhouse.com/wp-includes/class-simplepie.php ” Mbabazi said on Monday morning during a meeting with press at his residence in Kololo, Kampala.
The former leader of government business in Parliament promised to lobby for heavy investments in the country’s economy by both local and international investors to push the country to greater heights.
Mbabazi said he would deal with anyone be it from the East, West, North or South in a bid to make Uganda a better place, adding, he would try to ensure cooperation with all the neighbouring countries.
Mbabazi participated in the NRA struggle as the head of external wing that saw Museveni take power in 1986.
He has since served in high profile positions as Attorney General, Minister of Defence, Security and Prime Minister among others.
But NRM officials continue to question Mbabazi’s sincerity considering he never fully exploited his potential to further Ugandans’ aspirations.
His reign as Prime Minister and Security Minister were marked by a litany of corruption allegations which he vehemently denied.
Not Loyal to Anyone
The ex NRM Secretary General said he is not loyal to any individual be it in Uganda or abroad but rather the country and the party whose values he tries to uphold to the maximum standards.
“My loyalty is absolute but not to any individual but the people and constitution of the country. It’s to the NRM and the revolutionary values we fought for during the bush war,” Mbabazi added.
He stated that it’s high time President Museveni relinquished power in peace so as to facilitate a transition from the old generation to a young generation that would steer the country to greater heights.
Presidency Minister Frank Tumwebaze today said Mbabazi can only sound promising “if he presents a new menu on how to do things different” and that Ugandans have had enough of slogans.
“Amama has a choice. Either to sound different with new ideas or to join the usual chorus of change and agende,” said Tumwebaze.