WHETHER KAMPALA DISTRICT IS TO BE PUT ON LOCKDOWN OR NOT, THE DECISION HAS ALSO TO INVOLVE FINANCIAL EXPERTS.

By William Kituuka Kiwanuka

The Observer of October 28, 2022 has an article: ‘Broke Govt to borrow Shs 2 trillion from StanChart to finance budget. 'Broke' govt to borrow Shs 2 trillion from StanChart to finance budget. In the first quarter of this FY, only Shs 10.25tn out of expected Shs 14.57tn was released. In the 2nd quarter, only Shs 7.3tn has been released observer.ug/news/headlines…

We are aware many Governments borrow to finance their budgets as a norm. However, not all is well for Uganda’s economy.

Recently, Dr. Adam Mugume an Economist at Bank of Uganda and Director of Research and Policy is quoted to have said, “We are only assuming now that either we have the Oil revenues coming on board or we go back and ask for debt forgiveness or we default. A part from these options, I don’t see how we shall repay our debts”.

Finance Minister Matia Kasaija while appearing before the Parliamentary committee for finance disclosed to the inquisitive lawmakers that government has totally run short of funds to run the country.

“We are totally overwhelmed at the moment. What we have in the national coffers is too insufficient to sustain the national economy,” Kasaija says. “We have no money to run the country. This work is hectic for me yet I can’t step down. I cannot resign as many of you have been asking me to,” Kasaija added.

https://ekyooto.co.uk/2022/08/12/minister-says-govt-has-run-bankrupt/

We ought to be aware that Uganda is where it stands today mainly because of two developments: 

1. The COVID induced lockdown of the economy 2020 through 2021.

2. The Russia invasion of Ukraine since February 2022.

Following the COVID lockdown, UBOS came up with policy interventions as stated below to better the situation.

IMPACT OF COVID - 19 ON KEY ECONOMIC ACTIVITIES IN UGANDA AND SUGGESTED POLICY INTERVENTIONS.

Policy Interventions

Uganda Bureau of Statistics got a number of feedback particularly from the private sector on possible interventions Government could undertake to stimulate economic growth in the short – to medium term and consequently maximise social welfare (consumer surplus) in long term. The policy interventions are highlighted below.

1. Support crop and livestock farming activities by extending affordable credit facilities to organised rural households (women, youth, cooperative societies), providing improved farm inputs and quality extension services to households and commercial farmers, making available water for production, strengthening storage facilities and minimising post-harvest loses, storage and transportation to improve supply chain of food crops, cash crops and livestock products,

2. Need to support agro processing Industries to increase production of what is being imported that can be produced locally. For example; (a) with milk, the country can produce pasteurized milk and powdered milk to substitute the imported ones; (b) manufacture of animal and vegetable cooking oils; (c) textile manufacturing from cotton lint, (d) further processing of coffee, tea (for beverages), maize, cassava (for raw materials in manufacture of pharmaceuticals, and starch), Irish potatoes, sorghum, fish, to mention but a few.

3. Accelerated support to science and innovation hubs in the geographic regions using higher institutions of learning to research in areas of for chemical, electrical and electronic products given the abundance of raw materials, base and other metals in the country,

4. Provide tax incentives to SMEs and large enterprises for at least two years.

5. Avoid increasing import tariff of intermediate products, reduce the non-tariff barriers and the cost of

doing business to promote final-goods industries relying on imported intermediate products

Table 2 below provides a matrix of suggested cross sectoral and specific interventions from private sector,

which Government should have a close look at to stimulate the economy.

https://www.ubos.org/wp-content/uploads/2020/06/Impact-of-COVID-2019-On-the-Ugandan-Economy692020.pdf

Given the above background, it will be VERY WRONG for the Government of Uganda to rely on technical advice by just the Medical exparts to lockdown Kampala and possibly Wakiso district.

That is my input.

FOR GOD AND MY COUNTRY.