The Ugandan government on Thursday presented a 44.7 trillion shillings (about 19.3 billion U.S. dollars) fiscal budget that is expected to put the east African country on a recovery trend in next financial year 2021-22 as it fights off the devastating impact of the ongoing pandemic.
Economic experts argue that this recovery trend hinges on the severity of the pandemic on the regional and global economies.
The pandemic at country level hit the Uganda economy affecting the growth trajectory, according to ministry of finance. The growth rate had been projected to reach 6.3 percent in financial year 2019-20 and 6.2 percent in financial year 2020-21. The actual growth in the financial year 2020-21 was 3.3 percent.
Many business entities closed, leading to a loss of an estimated 100,193 formal jobs since the pandemic broke out in March last year to June this year. The impact was largely felt by the informal sector.
Uganda’s economy is intertwined with that of the region and global, meaning that its recovery also hinges on how both these blocs handle the severity of the pandemic.
Recovery will be underpinned by among others a rollback of pandemic-induced restrictions, resumption of tourism and a rebound in commodity prices.
Internationally, according to Uganda’s ministry of finance, the growth outlook will depend on whether the new COVID-19 strains prove susceptible to vaccines or they prolong the pandemic.
The availability and uptake of vaccines and availability of additional financing and transformative domestic reforms to promote resilience will be critical in in the recovery path, according to the ministry of finance’s background paper on the national budget for the fiscal year 2020-21.
Uganda is optimistic that the economy will eventually wane the impact of the pandemic, despite ministry of health figures that show that the country is currently facing an upsurge of COVID-19 cases as it goes through the second phase of the pandemic.
A Purchasing Managers’ Index report issued this week showed that there are increasing signs of the economy gradually returning to the old normal. Firms remained optimistic regarding the 12-month outlook, with companies expecting further improvements in new business in the coming months.
Ministry of finance figures show that despite the effects of the pandemic, the country’s per capita Gross Domestic Product has continued to improve growing from 916 dollars in the financial year 2019-20 to 936 dollars in the financial year 2020-21.
According Amos Lugoloobi, designate minister of state for finance in charge of planning, in next financial year 2020-21, which starts on July 1, government will concentrate on increasing household incomes and improving the quality of life of its citizens.
Lugoloobi said focus will be put on economic recovery through increased production and market access, supporting livelihoods through addressing poverty, and continued investment in growth enablers like infrastructure and skilling.
According to the ministry of finance, the signing of key oil agreements April this year and the anticipated start of commercial production of oil is projected to bolster the country’s economic growth.
According to Lugoloobi, government has also re-strategized its fight against poverty by developing the Parish Development Model, an approach to organizing and delivering public and private sector interventions for wealth creation at the parish level as the lowest economic planning unit.
The 200 billion-shilling-model aims to increase commercial production of priority commodities at the parish level and increase household incomes in the process. Uganda has 10,594 parishes. Enditem