As Uganda starts preparing for the financial year 2024/2025, the nation’s budget is set to focus on stimulating growth in key sectors such as industry, services, and agriculture.
The strategy, outlined by the Acting Director of Budget at the Ministry of Finance, Ishmael Magona, is anchored in the National Development Plan 3, with the primary goal of creating more opportunities and fostering economic growth.
The current budget for the financial year 2022/2023 stands at 48.13 trillion shillings. However, preliminary figures from the Ministry of Finance indicate that the budget for the next year, 2024/2025, will exceed this amount, reaching an impressive 52.722 trillion shillings.
Magona emphasized that these figures are supported by various factors. Projections include 29.97 trillion shillings from domestic revenues, 0.028 trillion shillings from Budget Support, 4.12 trillion shillings from Domestic Financing (Domestic Borrowing), 8.88 trillion shillings from project support, 9.46 trillion shillings from Domestic Refinancing, and 0.29 trillion shillings from local revenue for local government.
Recognizing the pressing need for youth employment and development, the Ministry acknowledges that job creation will be a crucial strategy to combat unemployment.
The overarching goal of this budget is to drive economic growth of at least 7%. This will be accomplished by transitioning from raw-material-based industries to a manufacturing and knowledge-based economy. Furthermore, the plan aims to improve the business environment to enhance competitiveness.
Nevertheless, the budget strategy has elicited mixed reactions. State Minister for Trade, Harriet Ntabazi, expressed her concern, stating, “The Ministry of Finance didn’t allocate any funds for trade, and I am glad you noticed that Uganda traded at a deficit, with exports falling short of imports. After production and value addition, what’s the next step?”
The successful implementation of this budget will require addressing potential risks, including inflation, exchange rate depreciation, and the global and regional surge in demand for petroleum products, among other challenges.
Uganda’s upcoming financial year will be a critical juncture in the nation’s economic trajectory. As the budget is debated and refined, it will shape the path towards a more prosperous future and determine the country’s ability to navigate through complex economic challenges.
