Government unveils plan to grow economy

Kampala- Government has unveiled a plan it says will rapidly grow the economy and create jobs.

The 2019/2020 draft Budget Estimates for Financial Year 2019/2020 show that five priority areas have been identified, including lowering the cost of credit, cost of doing business, growing exports and improving import substitution industries.

Others are increasing opportunities for youth employment and commercialisation of subsistence agriculture where government will support commodity value chain.

Finance minister Matia Kasaija presented the draft budget statement to Parliament last week.
Delivery of quality inputs, farm mechanisation, irrigation and fertilisers are some of the key interventions that government will provide in the agriculture sector to increase productivity.

“Commercialising agriculture has the greatest potential for increasing household incomes and addressing unemployment in the rural communities. This will address the livelihoods of more than 68 per cent of Uganda’s households that are engaged in agriculture and related agribusinesses,” the 2019/20 budget statement reads in part.

To lower the cost of credit, government will give Microfinance Support Centre Shs77b for lending out at an interest rate of 8 per cent.
Bank of Uganda lends to commercial banks at 9 per cent but most commercial banks interest rate averages at 21 per cent.

Government will also renegotiate the Umeme concession agreement to “provide better terms that lower tariff.”

Government will also lower internet costs by implementing the new national broadband policy and build capacity of local firms to participate in critical sectors such as in construction, mining and oil and gas.

With the African Development Bank issuing the Africa Economic Outlook Report of March indicating that East Africa will be the fastest growing region on the continent, Mr Kasaija said Uganda has since revised its growth projections.

“The medium-term outlook is positive, with real GDP growth projected at 6 to 7 per cent per annum. The main drivers of faster growth in the medium term include accelerated growth in trade, manufacturing, private construction, public sector investments in infrastructure, agriculture and tourism,” he said.

Reaction
Mr Julius Mukunda, the coordinator of Civil Society Budget Advocacy Group, said yesterday that “this time, government got the priorities right,” especially on agriculture and youth employment.

“We will be waiting to see how government actualises those priorities. The devil is in the detail. But agriculture is where we have the comparative advantage. The problem will come when government supplies fake seeds,” he said.

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