The government of Uganda on Thursday, 10 June 2021 presented a Shs44.7 trillion budget for Financial Year 2021/2022, with emphasis on increased socioeconomic empowerment of ordinary Ugandans to recover from the economic downturn occasioned by the Covid-19 pandemic.
Of the Shs44.7 trillion, Shs22.42trillion will be generated from domestic revenue, Shs20.837billion will be tax revenue and Shs1.588 trillion will be Non-Tax Revenue. Domestic borrowing amounts to Shs 2.943 trillion. The Petroleum Fund resource amounts to Shs200 billion and Budget Support Shs3.583 trillion. External financing for projects will amount to Shs6.868 trillion of which Shs5.519 trillion is from loans, and Shs.1.349.4 trillion is from grants. Appropriation in Aid, collected by Local Governments amounts to Shs212.4 billion; and Domestic Debt Refinancing will amount to Shs8.547 trillion.
Amos Lugoloobi, the newly appointed State minister for finance in charge of Planning, who presented the budget, said total expenditure will be Shs.44.778.8 trillion. Excluding domestic debt refinancing and Appropriations in Aid (AIA), it amounts to Shs36.019.4 trillion of which Wages and Salaries is Shs5.528.6 billion, Non-wage Recurrent Expenditure is Shs15.625.4 trillion and Development Expenditure is Shs14.865.3 trillion.
Mr Logoloobi said the economic growth strategy for the medium term aims to achieve faster and inclusive growth and enhanced socio-economic development.
“The target is to raise growth rates from 4.3% estimated for Financial Year 2021/22 to at least 7% in the medium-term. The strategy that will achieve these medium-term objectives is three-fold: i. Restoring the economy back to the medium-term growth path; ii. Improving the wellbeing of the population to ensure a healthy and skilled workforce; and iii. Providing peace, security and good governance,” he said.
Restoring the economy
The minister said restoring the economy to medium growth path requires boosting business of the Private Sector, especially Micro, Small and Medium (MSME) Enterprises by extending Covid relief measures, increasing regional and continental market access, access to long term affordable capital and supporting entrepreneurial development. He added that it also requires the government to aggressively promote agro-Industrialization to unlock the potential of primary production, together with standards development and enforcement including enhanced Market Access.
In this regard, Mr Lugoloobi said Uganda Development Bank will be further capitalized with an additional Shs. 103 billion in financial year 2021/22, in addition to the Shs. 555 billion disbursed this Financial Year 200/21 for lending to Small and Medium Enterprises affected by the COVID19 pandemic, among others.
“The Agricultural Credit Facility (ACF) at the Bank of Uganda, the Emyooga programme through the Micro Finance Support Centre (MSC) and the Uganda Women Entrepreneurship and Youth Funds will continue to provide targeted funding for agriculture, women and youth group projects respectively,” he added.
In order to promote investment, foreign and domestic direct investment will be facilitated. This will increase value addition, as well as enable technology and knowledge transfer. 350,000 direct jobs and 650,000 indirect jobs are expected to be generated. To this end, 23 regional Industrial Business Parks to be spread across the country, will be established, among others, he said.
A total Shs. 1.67 trillion has been allocated to support agro-industrialization initiatives next financial year to develop commodity value chains linking national, regional, district and sub-county level commodity off-takers to private nucleus farmers and Multiply fish, poultry and crop technologies developed by National Agricultural Research Organisation (NARO) and improved breeding stock by National Animal Resources Centre and Databank (NAGRC&DB) to be replicated across the country using the Parish Development Model.
The money is also to operationalize 20 Zonal Industrial hubs for skilling youth and women, wealth creation and value addition, for Carpentry, Welding, Tailoring, Knitting, Weaving, Bakery, Shoe Making, and Stone Cutting trades, and value addition facilities for commodities such as Coffee and Maize.