What you need to know:
The 2023/24 National Budget has opportunities in value-added processing, textile manufacturing, pharmaceuticals and other sectors.
A budget is a plan that details income and expenses to support financial goals, money management and more. It applies to personal as well as institutional projections. In June, the Finance Minister read the national budget with several projections on how the government hopes to get money as well as spend it.
Mr Michael Segwaya, the executive director of ABSA bank, says the budget paints a picture for the next year. You should think about how you fit in and manage going forward, as a business and individual.
The budget has conversations around imports and exports and it is important for the business community to understand the government’s standpoint.
“Pay attention to the gross domestic product growth as that spells an opportunity to sell what you are doing. Additionally, inflation being managed at 5 percent means one can plan. For instance, if one is importing fuel, they should have these figures at the back of their mind to manage their trade,” Mr Segwaya says.
He adds that another figure a business person must consider is the exchange rate as such are crucial for any business person. Mr Matia Kasaija said between April 2022 and April 2023, the Uganda Shilling depreciated by 5.8 percent against the US Dollar, compared to an average depreciation rate of 8 percent within the East African region.
“The stability of the exchange rate is due to the increase in foreign direct investment inflows into the oil and gas sector, significant recovery in tourism, and the recent good performance of exports,” the minister said in part. That points to the fact that sectors such as the growing oil sector are fertile for investment. Mr Segwaya tasks an entrepreneur to see which arm of the sector they can use to become part of the money-making equation.
Mr Stephen Asiimwe, the executive director of Private Sector Foundation Uganda (PSFU), says the budget is an enabler and entrepreneurs can tap into the various resources such as joint ventures, liberalising the investment climate, and increased electricity which catalyse development in various areas.
“We are concentrating on women and youth and ensuring that people have professional export readiness so they can make use of the markets. Therefore, we are helping them with standards, phytosanitary issues, packaging, branding but more importantly to remind them to be committed, with integrity,” he says.
Part of the economic growth strategies is to construct the Standard Gauge Railway and the rehabilitation of the Meter Gauge Railway, among other infrastructure developments. “There is Shs4 trillion allocated for transport infrastructure. Therefore, people such as contractors should prepare themselves to leverage these opportunities,” Mr John Walugembe, the founder of the Federation of Small and Medium-Sized Enterprises, says.
Mr Chariton Namuwoza, the chief executive officer of the National Organic Agricultural Movement of Uganda, says this budget hopes to include 40 percent of the population in the money economy. These are largely farmers in rural areas who are in subsistence and it is availing them with an opportunity to change their lives. One of these opportunities is the Parish Development Model where these can join farmer groups or cooperatives organised around a particular enterprise or commodity that is marketable.
“People need to position themselves along the value chain to tap into the money to buy seed. Cooperatives can grow a marketable product such as coffee, fruits and vegetables. However, I would discourage a farmer in Busoga with half an acre to grow maize because it is a low-value crop,” he says.
In regards to integrated cooperatives engaged in growing different crops and adding value, Mr Namuwoza says the budget has allocated money to the Uganda Development Bank, Uganda Development Corporation and Bank of Uganda’s Agricultural Credit Facility and the lending rates are low.
“These can easily access the funding as it is geared towards those that are well-organised, and already in the market. Farmers that are not part of cooperatives should join so they can benefit,” he advises.
Mr Namuwoza adds that value addition is not only about changing the crop product’s form but also bulking it and selling it at a time when the price is conducive.
“When one harvests coffee and does not sell it immediately but dries and stores it to sell when it is somewhat scarce. Such is possible under the cooperative organisation,” he says.
The other opportunity is capacity building as the budget has allocated Shs60 billion for skilling. Mr Namuwoza says many people who lack skills can not escape poverty. “In the last financial year, 19 skilling centres were established across the country under the Presidential Industrial Hubs initiative. There is also skilling at the Uganda Industrial Research Institute.
Additionally, the minister said 761Km of transmission lines and associated power sub-stations will be constructed to improve the stability and reliability of the networks. Coupled with extra skilling of Uganda’s Electricity generation and transmission companies, Mr Matia said Shs1.3 trillion was allocated for electricity interventions.
Mr Asiimwe says tourism centres are some of the 820 centres the government is equipping with WiFi.