What you need to know:
- Government says it is investing in a number of interventions to increase tourism revenues from $1.6b to at least $5b
The Ministry of Finance is confident that the tourism sector is on the path to full recovery, promising an increased inflow of foreign exchange, after a serious slump due to Covid-19 since 2020.
In his presentation during the National Budget Conference for the 2024/25 Budget Strategy, Finance Minister Matia Kasaija, said tourism receipts have risen since 2022, averaging at $260m in the quarter ended March, compared to $238m in the same period in 2022.
However, Mr Kasaija said “this was still below potential,” noting that a number of interventions have been outlined to increase tourism receipts to $5b per annum by 2028”.
Current data indicates that Uganda earns a little more than $1b from tourism. However, the earnings are still lower than the $1.6b that the sector was earning pre-Covid-19.
Therefore, Mr Kasaija said there is need to unlock constraints to tourism by improving roads, investing in ICT and tourism sites, ensuring security and countering negative publicity and travel advisories.
Other interventions, he said, include enhanced promotion and marketing, supporting training in hospitality, grading of tourism facilities based on international standards and enforcement of sanitation standards.
Government also notes that there is need to promote domestic tourism within Uganda and regional markets, many of which have untapped potential yet tourist facilities have to wait for peak seasons to survive.
Besides tourism, government also said remittances have increased to $1.38b in the year ended March on account of improved economic conditions in source countries while Foreign Direct Investments, which had reduced sharply to $874m in 2020 rose to $1.52b in 2022, the highest level on record.
“Uganda was one of the 10 top African countries in FDI inflows in 2022 and number one in East Africa due to growth in the minerals sector, and oil and gas, which recorded increased activity after the Final Investment Decision in February 2022,” he said.
However, during August, Mr Kasaija said, revenue performance was under target with government realising Shs4 trillion against a target of Shs4.13 trillion, which resulted in a shortfall of Shs100.67b
However, he said, despite the shortfall, there was a 12.5 percent growth in revenues worth Shs405.21b.
Mr Kasaija also noted that government has actively pushed for job creation, realising a total of 1.8 million jobs between 2016 and 2021 in different sectors of the economy, noting that the budget would continue to invest in science education and skilling through vocational and apprenticeship training to improve innovation, research and development.