Uganda’s economic outlook is optimistic, says Museveni

President Yoweri Kaguta Museveni has assured Ugandans that the country’s economy is continuing to expand despite the effects of climate change on agriculture and infrastructure by the floods, the conflict in Eastern Europe, which led to a rise in the prices of some strategic commodities such as oil as well as the recent rise in interest rates globally.

“Uganda’s economic outlook is very optimistic. This is mainly because  of  the consistent support to the private sector through supportive policies that create a business friendly environment, infrastructure investments in energy, transport and ICT, enhanced access to credit (through the Parish Development Model (PDM), Small Business Recovery Fund, Emyooga, Agriculture Credit Facility, UDB, UDC, etc.), as well as the swift and comprehensive response to the impact of the previous health crises and the regional geopolitical security issues,” he said.

The President made the remarks yesterday while delivering his 38th National Resistance Movement (NRM) victory Anniversary speech at State Lodge, Nakasero.

According to President Museveni, Uganda’s economy grew to Shs 184.89 trillion (US$ 49.5 billion) in the financial year 2022/2023, up from Shs 162.750 billion (US$ 45.6 billion) registered in the financial year 2021/22.

“In real terms, the economy grew by 5.2 percent in the financial year 2022/2023, better than 4.6 percent registered in the financial year 2021/22. This expansion was a result of good performance of most sectors of the economy, with services growing at 6.2 percent (especially in trade, tourism, education, ICT, arts and entertainment); agriculture at 4.8 percent with food crops growing at 4.7 percent from 3.5 percent, livestock at 8.8 percent from 8.3 percent, and fish activities at 8.6 percent from 0.3 percent in FY2022/23 and FY2021/22, respectively. The growth in industry was 3.5 percent, slower than the 5.1 percent recorded in the same period the previous year,” the President noted as he congratulated Ugandans upon reaching the 38th NRM Liberation Day Anniversary.

He said the size of the economy will further grow from Shs 184.3 trillion in the financial year 2022/23 to Shs 204.9 trillion (USD 55 billion) by end of financial year 2023/24 and then leap to Shs 225.5 trillion in the financial year 2024/25 (equivalent to USD 60 billion).

The President explained that this will be driven by the higher output in the services, industry and agriculture sectors of the economy; the recovery in aggregate demand as inflation slows down; the continued implementation of the Parish Development Model; expediting investments in Oil & Gas Sector; continued recovery in tourism; growth in regional trade including in the EAC, COMESA and globally.

“The implementation of the interventions to accelerate economic growth through productivity improvements and value addition to our abundant raw materials in the anchor sectors of agro-industrialization, oil and gas, mineral development, tourism and knowledge economy development, will shift the economic growth path to a level of 8 percent per annum on average over the medium term. This will increase the pace of our socio-economic transformation and building an independent, integrated and self-sustaining economy as was enunciated in point no.5 of the 10 Point NRM Programme.”

Inflation

President Museveni asserted that the general increase in the prices of goods and services (inflation) in Uganda, slowed down from a peak of 10.7 percent in October, 2022 to 2.6 percent in November, 2023.

“This is expected to remain within the policy target of 5% over the medium term, supported by increased agricultural production, the increase in the supply of locally manufactured goods, increased exports which increase the supply of foreign currency in the economy, increased efficiency in economic activities due to increasing integration of new technologies including ICT capabilities in our manufacturing and other businesses and good economic policies,” he noted.

The President also disclosed that the merchandise exports increased significantly, growing by 54.9 percent from USD 4,194 million in the twelve months to October, 2022 to USD 6,497.9 million in the twelve months to October, 2023, largely driven by gold, coffee and maize exports.

“Imports grew by 26.2 percent, much slower than the growth in exports, resulting in the narrowing of the trade deficit by 11.2 percent in the same period. This is the main reason why the Ugandan Shilling has remained stable, together with the strong foreign direct investment inflows and remittances of Ugandans working outside the country.  This shows that the Uganda economy remains attractive to investment, and it remains a profitable investment location,” H.E Museveni said.

“Export receipts are expected to increase even further as Uganda accelerates the production of light manufactured goods and middle high-tech industrial products through value addition processes especially to the abundant mineral reserves that the country has.”

To accelerate the process of value addition on Ugandan products, President Museveni stressed that the Government is reducing further the cost of electricity for manufacturers, improving transport infrastructure including roads and railways, eliminating bureaucracy in Government especially in procurement in order to attract new investments and technology transfer, making available affordable capital and intensifying the fight against corruption, through accelerating automation of Government processes, frequent audits of Government interventions and rationalization of Government institutions and departments.”

On the other hand, the President said the East African Community, as a single trade bloc, remained the major destination of Uganda’s exports in the 12 months to October 2023, accounting for 43.5 percent of total exports followed by the Middle East (18.1 percent) and Asia (17.6 percent).

“Within the EAC region, the top three destinations for Uganda’s exports in the same period were Kenya (31.5 percent), Democratic Republic of the Congo (24.6 percent) and South Sudan (23.3 percent).”

On the issue of expanding regional trade and support development, H.E the President said Uganda is undertaking joint projects with DR Congo and implementing interventions to reduce transportation cost and improve the border infrastructure to facilitate trade and financial services across the region.

“We are undertaking joint projects in the roads sector and electricity to Eastern DR Congo. Securing this market is good for Ugandans in terms of exports and jobs. The Uganda Government and President Tshisekedi of DR Congo will continue to work together to improve the security situation in Eastern Congo,” he emphasized.

“Uganda has gained competitiveness in recent years in a number of tradable goods including animal products such as beef and milk, agricultural products especially coffee, tea, fish, sugar, fresh and processed food and industrial products such as cement, iron and steel products, light manufactured goods, etc. However, we continue to face non-tariff barriers to our exports which are being resolved through our discussions with the leaders of the EAC and COMESA.”

Implementation of PDM

President Museveni further informed Ugandans that the PDM, is the NRM Government initiative to spur growth from the bottom-up and for transforming the population currently in subsistence to the money economy.

“The PDM is a pillar of point No.5 of the NRM’s 10-Points Programme to build an independent, integrated and self-sustaining economy. To-date, the Government has invested Shs. 2.32 trillion in the financial inclusion pillar of this Model, targeting all the 10,459 parishes across the country for job creation and increasing household incomes,” he said.

“At least Shs 1,018.8 billion has been successfully disbursed to 1,032,183 households in 10,455 out of 10,585 SACCOs, across the country. The balance will soon be disbursed when the remaining beneficiaries meet the conditions successfully. Government, is working to improve the PDM by improving monitoring, operationalization of the other 6 pillars of PDM beyond the financial inclusion pillar; and Streamlining all Government program interventions and service delivery at the parish, to ensure the realization of PDM.”

On the issue of oil and gas development, Gen. Museveni said the commercial production of oil and gas will provide revenues to support productivity enhancement in the economy through economic activities such as oil refineries, petrochemical plants, petroleum products distributors, natural gas distribution companies and retail outlets.

“Government is enhancing investments in this area by fast-tracking the construction of the East Africa Crude Oil pipeline (EACOP) and the Oil Refinery. The pipeline will have the capacity to pump up to 230,000 barrels of crude oil daily.

Security guaranteed

President Museveni also assured citizens that security infrastructure and interventions to maintain peace and security of the people of Uganda, investors and visitors, is guaranteed.

“These included, strengthening the capacity of security agencies to address emerging security threats; addressing discipline issues of security personnel in the Uganda People’s Defence Forces (UPDF), Uganda Police and Uganda Prisons Services; enhancing the security infrastructure to detect crime before it happens; and addressing the welfare of personnel in security uniforms,” he said.

“This includes the security interventions and achievements under the Anti-livestock Theft and Disarmament Operations in Karamoja and Operation Shujaa in DR Congo. The security infrastructure we have built will eliminate the very few remaining loopholes where ADF terrorists are exploiting to carry out cowardly attacks on civilians. As we commemorate the 38th Anniversary of NRM’s victory, I want to assure everybody, including our visitors and investors, that Uganda will remain a peaceful, secure and prosperous country.”

In a special way, President Museveni thanked Ugandans for the discipline they displayed as the country hosted the two international summits;- the Non-Aligned Movement (NAM) and G-77 plus China recently.

“There were 1918 delegates from 129 Countries, Sixteen Presidents, nine Vice Presidents, sixteen Prime Ministers, seven Special category, coming into Uganda by Airlines and 32 private jets. I thank the Ugandans for the discipline in receiving these visitors. These Countries have 6.6 billion people-80% of the human race. More importantly, look at the facilities we built partly for this occasion but in order to improve the infrastructure of the Country – some of them built in one year. Look at the New Terminal built by the UPDF Engineering Brigade, and the Conference Centre built by Sudhir’s Company, using Government money,” he said.

“There is nothing we cannot do. It is just a question of priotization. Some people always talk about the potholes of Kampala. They should also talk about the good up – Country roads – from Kisoro to Nimule, Busia-Busuunga in Bundibugyo. Without corruption, we have the capacity to do everything. I have instructed the Engineering Brigade to start preparing to build the Standard Gauge Railway, instead of only waiting for outsiders to do it.”