Legislators on the finance committee of parliament yesterday disagreed with the state minister for finance David Bahati on Uganda’s economic outlook, with some calling these statistics a hoax.
While presenting the Finance budget framework paper to the committee, Bahati painted a glossy picture of the economy which he indicated had expanded by more than four times to 101 trillion shillings despite geopolitical shocks.
Notably, he stated that Foreign Direct Investment (FDI) had increased by 6% to 1755 million dollars the previous year, and that Domestic Revenue had nearly tripled from 5 trillion shillings in 2010 to 16 trillion last year.
“The economic growth outlook remains positive. Real GDP growth is projected at 6.3% and 6.2% in FY 2019/20 and FY 2020/21 respectively and is expected to reach 7.0% percent by 2024/25,” Bahati intimated.
However, Bahati his explanations were not well received by some MPs on the committee.
West Budama North MP, Okoth Otieno (NRM) queried the minister’s submission calling it a persistent story that is not in tandem with reality on the ground.
“It’s a hoax; this is not real growth. In 2014 the exchange rate was around 1 USD for Shs 3800 and today with expansion of the economy the massive growth registered year after year it is 3700,” Otieno pointed out.
“In 1980, Vietnam exported 77,000 bags of coffee. Uganda was producing 2.1 million bags of coffee. Come 2018, Uganda is stagnated at 5.4 million bags of coffee Vietnam has 29 million bags of coffee,” he added.
On his part, Amos Lugoloobi the committee chairperson expressed concern over the country’s declining trade balance which he said reduced from 932 billion shillings in 2017/18 to 11 billion last year.
Lugoloobi also cited Uganda’s foreign debt which has risen to 36.1%.
“When you look at you the amount of available resources, before you even set wages and other fixed expenses, we are almost running to a situation where national resources may get way below 10 trillion shillings.”
Butambala legislator Muwanga Kivumbi accused the finance ministry of pedalling falsehoods yet in a space of two years; government had borrowed approximately seven trillion to settle its domestic debts.
Bahati however explained that other countries within the region had gone beyond the 50% threshold save for Uganda which was taking caution as far as external borrowing is concerned.
According to Statista.com a financial site, Uganda Debt to Gross Domestic Product (GDP) averaged 43.04% from 1997 until 2017, reaching an all-time high of 71.50 percent in 2003 and a record low of 19.20 percent in 2009.