Govt in talks with World Bank – Minister Musasizi

Minister of State for General Duties Henry Musasizi has revealed that government and World Bank are engaged in heavy negotiations regarding the recent decision halting funding to Uganda over the passing of the Anti-Homosexuality Act.

He made the remarks while appearing before Parliament Committee on National Economy to present the Performance of the Economy, State of Indebtedness and Strategies to improve the economy.

He urged Ugandans not to worry about losing the lender because the negotiations will yield positive results.

“We are involved in heavy negotiations with the World Bank and we have made significant progress. There are a number of benchmarks they have given us to do, and there is information they have asked us to provide and also evidence that certain things they were querying will be addressed,” he revealed.

Musasizi told the committee that they have provided all the information and addressed all the issues that World Bank keeps raising.

“We are optimistic that we shall reach a position between us and the World Bank which is very positive, so there shouldn’t be any reason to worry about the decision World Bank took,” added Musasizi

He further explained that the Ugandan economy is steadily recovering from the effects of economic shocks like the COVID-19 pandemic adding that the resilience of the economy is attributed to sustained support by government through various programs.

“Estimates by Uganda Bureau of Statistics indicate that the size of the economy increased to UGX 184,895 billion in FY 2022/23 from UGX 162,750 billion registered in FY 2021/22,” he stated.

This expansion, according to Musasizi was on account of good performance of all sectors of the economy.

He further explained that inflation has continued to slow down due to appropriate and well-coordinated monetary and fiscal policies.

“Headline inflation declined from a peak of 10.7% in October 2022 to 2.7% in September 2023 and now 2.4% in October 2023,’ he said.

Export receipts grew by 42.5% to USD 5,466.99 million from USD 3,836.58 million in FY 2021/22 largely driven by increase in earnings from mineral products, coffee, maize, tea among others.

Coffee export receipts amounted to US$ 121.64 million in August 2023, representing a 15.9 percent increase compared to the US$ 104.99 million receipts in July 2023.

Musasizi noted that Uganda continued to register growth in foreign direct investment (FDI) inflows.

“FDI inflows increased by 68.3 percent in 2022/23, largely hinged on the developments in the oil sector as Uganda prepares for its first oil. FDI inflows rose from USD 1,688.56 million in FY 2021/22 to USD 2,842.65 million FY 2022/23,” he said.

Remittances to Uganda increased to USD 1,431.23 million in 2022/23 higher than the value of USD 1,133.94 million registered in 2021/22.

In FY 2023/24, he revealed that the economy is projected to grow at 6.0% mainly supported by continued investments in Oil and Gas plus government interventions through PDM, Emyooga, Investment for Industrial Transformation and Employment project, Small business recovery fund.

As at June 2023, nominal debt to GDP was 46.9% and is projected to stabilize below 50% over the medium term.