‘Budget may not trigger transformation'

Other than government, few people are optimistic about the 2019/2020 National Budget that will be read by the finance minister in June.
Experts believe government priorities for the new financial year (FY) 2019/2020 may not trigger the much-anticipated transformation because it is not structured to directly respond to the challenges of the common man and low-income earners who constitute the bulk of Uganda’s economy.

Economic analysts and civil society organisations have noted that Uganda has undergone some transformation over the years. However, that change is rather unusual.

According to Mr Ramathan Ggoobi, an economist, proper economic transformation should be from agriculture to industries and not services as it is currently the case.

Uganda Bureau of Statistics (UBOS) figures indicate that agriculture employs more than three quarters of the population yet its contribution to GDP as of last year (2018), reduced to 24 per cent, down from 54 per cent in the 1960s during independence.
This means three quarters of Ugandans are still stuck in a sector that hardly produces a quarter of total economic activities generated in the country annually.

“This is one of the biggest challenges policymakers in Uganda are grappling with. It shows that Uganda has not undergone structural transformation despite GDP growth,” reads an extract from a concept note on, “Budgeting for economic transformation and social inclusion,” held in Kampala recently.
Quoting 2015’s Ubos report, the concept note further read: “This also has been the genesis of the persistent household poverty and low income among Ugandans. Yet Uganda currently has the second youngest population in the world, with 78 per cent below 30 years.”

Transformative budget
Economist Ggoobi noted that the budget needed to direct investments in sectors that encourage structural growth and technological upgrading. This, he says, would then trigger productivity growth.
Implementing the industrial policy is projected to create quality jobs in addition to improved quality of education and training. The budget should concentrate on micro rather than macro developments.

Politics, Budget
Dr Fred Muhumuza, an economics lecturer at Makerere University School of Economics, says the National Budget is a political tool that cannot be discussed in isolation of the ruling regime’s political agenda. This possibly explains why the security budget remains a priority.

With interest payments among those taking the lion’s share of the budget, Dr Muhumuza, believes the transformational agenda of the 2019/2020 budget is far from sight. Jumping from poverty eradication to infrastructure development to services and security and back to infrastructure has not created economic transformation.

Mr Aga Sekalala Jr, the executive director of Ugachick Poultry Breeders, says what matters is the initiative to churn out skilled workforce that can adopt to the changing business environment.
Trade and policy development specialist, Africa Kiiza says a transformative budget doesn’t make much sense with high public debt.

Government’s view
The director budget at the finance ministry Mr Kenneth Mugambe, thinks speakers took a narrow view in analysing the 2019/2020 national budget. Although like the executive director of Uganda Development Cooperation, Mr Patrick Birungi, Mr Mugambe admitted that implementation is more difficult than planning.

Former finance minister Prof. Ezra Suruma says a legitimate Budget should solve key challenges such as unemployment.