Drought largest threat to Uganda's growth – Kasaija

What you need to know:

  • Finance Planning and Economic Development was aimed at finding ways of mitigating challenges faced by East African economies. With the drought expected to affect growth in Uganda, Mr Joseph Shevel, President of Galilee International Management Institute in Israel, said it was laughable that a country endowed with so much water sources could be facing food shortages.

Uganda’s economic woes do not seem like they are about to end if the ongoing drought in some parts of the country continues. According to Mr Matia Kasaija, the finance minister, the ongoing drought in several parts of the country is the largest threat to the projected growth in the economy of five percent.
“This drought is very severe. We were discussing this in the cabinet meeting on Wednesday. The rains came, we all got excited in November but now we see that it is slowing down. If nothing is done, it will be a serious impediment to our growth,” he said during the East African Economic Round Table at the Kampala Serena Hotel on Thursday.
Uganda’s economy in the last financial year grew much slow than had been projected due to factors around high inflation, high borrowing costs and a depreciating Uganda Shilling. The economy grew by just 4.8% in 2015/16. The projection for the current financial year is five per cent. However, with drought, this affects food production, resulting in high inflation rates. Due to a shortage of food, prices of commodities tend to surge and that also means Bank of Uganda (BOU) would have to step in to control any sudden rise. This has the potential of hurting growth.
Additionally, public expenditure will also be affected.

“We may be forced to cut expenditure in certain areas so that people do not die. We shall have to stop other things so Ugandans can survive,” Kasaija adds.

The roundtable organised by the Advocates Coalition for Development and Environment (ACODE) and The Ministry of Finance Planning and Economic Development was aimed at finding ways of mitigating challenges faced by East African economies. With the drought expected to affect growth in Uganda, Mr Joseph Shevel, President of Galilee International Management Institute in Israel, said it was laughable that a country endowed with so much water sources could be facing food shortages.

“This country Uganda is fertile, I’ve heard that if you plant a pencil in Uganda it grows,” he said pointing out that a country like Uganda should not be suffering from a drought if there are options for irrigating.
The most affected areas in Uganda are Isingiro, Teso, Masaka and parts of Northern Uganda that have had an influx of South Sudanese refugees.