Uganda banks on security for economic development
What you need to know:
- Uganda’s economy, burdened with a public debt stock of over Shs73.5 trillion and inflation exceeding 6 percent in June, has been on the brink of an economic collapse with government attributing the crisis to Covid-19 and the war in Ukraine
Uganda has allocated Shs3.9 trillion of its Shs48 trillion budget to security observing that boosting the defence budget would be the “the bedrock of socio-economic transformation in the Financial Year 2022/23.”
“Peace, security and stability as well as rule of law must remain key government priorities,” Finance Minister Matia Kasaija emphasized on Tuesday.
Uganda has enjoyed relative peace for close to four decades with isolated cases of conflicts in the Northern region amid risks of deadly rebel group incursions at some South-Western border points and the Karamoja in north eastern part of the country.
Mr Kasaija disclosed that the funding was also to bolster extended military operations including in the war-torn eastern DR Congo.
“The UPDF will also continue with the pacification of the eastern DR Congo in line with the agreement with the Government of the DR Congo,” Mr Kasaija noted at Kololo ceremonial grounds in Kampala.
Uganda’s economy, burdened with a public debt stock of over Shs73.5 trillion and inflation exceeding 6 percent in June, has been on the brink of collapse with government attributing the crisis to Covid-19 and the war in Ukraine.
“Sustaining peace, security and stability as well as macro-economic stability are key foundations for economic recovery, growth and socio-economic transformation,” Mr Kasaija said on June 14.
Government now projects a revenue collection shortfall of Shs939 billion in FY2021/22 but Mr Kasaija observed that the Finance Ministry was aiming to increase revenue by 0.8% of GDP in the coming FY.
“Economic activity has been more buoyant at the growth rate of 4.6 percent per annum this financial year up from 3.5 percent of last year. This shows that the economy is on a path to full recovery from the Covid-19 disruptions,” he said.
Tuesday’s budget address happened hours after top opposition activist Dr Kizza Besigye was arrested downtown Kampala over holding a protest against government’s handling of an economic crisis marked by soaring energy and food prices.
“To enhance the rule of law and to step up the fight against corruption, I have provided Shs381.6billion for the Judiciary, Shs95.0billion for the Directorate of Public Prosecutions, Shs 876.4 Billion for the Uganda Police, and Shs308.7billion for the Uganda Prisons Service. I have also allocated Shs79.4 billion for the Inspectorate of Government,” Mr Kasaija informed.
Mr Kasaija re-echoed government’s long-sought attempts to “fully monetize the nation’s economy through commercial agriculture, industrialization, expanding and broadening services, digital transformation and market access.”
Mr Kasaija listed implementation of the Parish Development Model, promotion of agro-industrialization, commercialization of oil and gas, enhancement of transport, energy and ICT infrastructure, enhancing human capital development, science, innovation and knowledge transfer and enhancing public sector effectiveness and efficiency as the government’s gateway to maintaining over 44 million people with annual incomes of at least Shs3.7million.