Senior Economists have indicated that Uganda’s 2019/20 budget that was read by the Finance Minister Matia Kasaija on Thursday evening predicts no bright future for Uganda going forward.
Dr. Fred Muhumuza, a Former Senior Economist at the Ministry of Finance and now working at the Makerere University-based Economic Policy Research Centre (EPRC) said that since in the budget, there was less money put into the agriculture sector, which is Uganda’s backbone and employs the majority of the people, industrialization for job creation and shared prosperity cannot be achieved.
“You can’t continue to do the same thing over and over again and expect different results. It’s a structural issue, not a budget issue.
“The reason being given to us for putting too much money in infrastructure development is to bring down the cost of doing business, has the cost of doing business ever gone down? Is the price of electricity down?
“Without investing more money in Agriculture where the majority of the population is, there will never be a transformation in Uganda,” said Muhumuza at a budget breakfast that was organized by Ernst and Young to shed more light on Uganda’s 2019/20 Budget at Kampala Serena Hotel.
Finance Minister Matia Kasaija, under the theme “Industrialization for job creation and shared prosperity” read a Ushs40.487 Trillion ($10.81b) budget where about Ush6.46 trillion was allocated to the Ministry of Works and Transport, Education and Sports (Ush3.3 Trillion), Energy and Minerals (Ush3 Trillion), Health (Ush2.6 Trillion) and Security (Ush3.6 Trillion).
Agriculture ranked eleventh among the top earners in the budget at Ush1.052 trillion or 3.2% of the total budget. This, according to Muhumuza is too little to have an impact or transform Uganda into a middle-income country.
In the Budget, Uganda Revenue Authority is targeted to collect revenue of Ush20.895 Trillion or ($5.58b) which is 51.6% of the total resource envelope.
Ushs12.2 trillion will be raised through internal and external borrowings while the remaining Ushs7.3 Trillion covering 18.1% will be obtained from General Budget Support, General Re-financing and Appropriation in aid.
Gideon Badagawa the Executive Director Private Sector Foundation Uganda (PSFU) who was also among the discussants of budget and tax highlights, noted that the target to generate 600,000 jobs per through industrialization can’t be attained at a 6.1% growth rate.
“If the country wants to attain that, maybe in 400years at a 25% growth rate. That’s when the GDP per Capita of $9000 per person per year can be attained. The World Bank also estimates that Uganda can only reach lower middle-income status at a growth rate of 12% sustained for not less than 10 consecutive years,” said Badagawa.
Badagawa also advised all concerned to get politics out of leadership and get leadership into politics.
VG Somasekhar, the Managing Director of Airtel Uganda also discussed the progress of the telecom industry last year, where he said that they experienced the worst growth in a number of years.
“The mobile money tax wiped out almost a year’s growth progress. 35% of all the mobile money agents left the business,” said Somasekhar.