{UAH} Uganda Finance minister finally concedes – the economic slowdown is real!
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3:18 AM |
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The Ministry of Finance after years of cheerleading on the economy, has finally admitted that the economy is reeling after years of a slowdown. Inflation is up in the double digits a change from the 5-6 per cent average from last year and 10-11 per cent in 2014-2015. The exchange rate is trading at the higher end of the band at Shs3,640-Shs3,670. Finance added by stating the obvious that economic growth will peak at 4 per cent in 2016-2017 off target a measly number given Uganda's nearly 3 per cent per annum population growth.
URA hit the final blow announcing it was still Shs200 billion off targeted collections. URA tax collections in the past decade have been padded by one-off revenue windfalls like the sale of crude oil the use of which proceeds have attracted controversy in the ongoing oil investigations in Parliament.
The inflationary pressures in the food sector are expected. A prolonged dry spell last year left many small holders without planting material. The drought hit livestock areas hard. It also turns out that the good politics of East Africa supplanted important policies on food security and mandatory storage of grains. Buying emergency food came with drastic cuts in government expenditure, yet government is the largest single consumer in the economy.
Maize, a common staple now, is nearly Shs3,000 and likely to rise as our neighbours Kenya face an even steeper grain deficit. The good politics of the community have seen traders running away from Ugandan store shelves where sugar is just Shs5,000 to Shs7,000 to Kenya where a kilogram fetches nearly Shs10,000. Struggling to close the gap in revenue collection, government has hit the money markets hard. Wise banks wary of risky lending prefer to make money off of government.
Government debt interest payments have spiked to nearly 40 per cent of the budget less than 10 years after winning debt relief in 2008. The total debt stock is alarming and has cast major government infrastructure initiatives like the SGR railway in negative light. At this point, it is difficult to say with certainty that the railway, pipeline and ongoing infrastructure developments can be implemented at the same time.
URA hit the final blow announcing it was still Shs200 billion off targeted collections. URA tax collections in the past decade have been padded by one-off revenue windfalls like the sale of crude oil the use of which proceeds have attracted controversy in the ongoing oil investigations in Parliament.
The inflationary pressures in the food sector are expected. A prolonged dry spell last year left many small holders without planting material. The drought hit livestock areas hard. It also turns out that the good politics of East Africa supplanted important policies on food security and mandatory storage of grains. Buying emergency food came with drastic cuts in government expenditure, yet government is the largest single consumer in the economy.
Maize, a common staple now, is nearly Shs3,000 and likely to rise as our neighbours Kenya face an even steeper grain deficit. The good politics of the community have seen traders running away from Ugandan store shelves where sugar is just Shs5,000 to Shs7,000 to Kenya where a kilogram fetches nearly Shs10,000. Struggling to close the gap in revenue collection, government has hit the money markets hard.
Wise banks wary of risky lending prefer to make money off of government. Government debt interest payments have spiked to nearly 40 per cent of the budget less than 10 years after winning debt relief in 2008. The total debt stock is alarming and has cast major government infrastructure initiatives like the SGR railway in negative light. At this point, it is difficult to say with certainty that the railway, pipeline and ongoing infrastructure developments can be implemented at the same time.
The resolution of Crane Bank at great cost to government through Bank of Uganda saved the banking sector from further haemorrhaging on bad debts; most big banks with the exception of Stanbic and Centenary banks, have seen profits plummet. Crane Bank affairs highlighted other structural problems in the economy. Just one out of the banks' top 50 managers was Ugandan.
This issue long swept under the floor under a permissive foreign directive investment regime is an issue in key economic sectors, including tourism, commercial agriculture and oil and gas. Uganda never publishes employment figures itself a shameful slap on BoU, the Uganda Bureau of Statistics and Labour ministry. So like the telecom networks who can't register and verify at the same, we really can't apply the right medicine to the right economic condition.
By Karoli Ssemogerere – Mr Ssemogerere is an Attorney-at-Law and an Advocate
DAILY MONITOR
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-- URA hit the final blow announcing it was still Shs200 billion off targeted collections. URA tax collections in the past decade have been padded by one-off revenue windfalls like the sale of crude oil the use of which proceeds have attracted controversy in the ongoing oil investigations in Parliament.
The inflationary pressures in the food sector are expected. A prolonged dry spell last year left many small holders without planting material. The drought hit livestock areas hard. It also turns out that the good politics of East Africa supplanted important policies on food security and mandatory storage of grains. Buying emergency food came with drastic cuts in government expenditure, yet government is the largest single consumer in the economy.
Maize, a common staple now, is nearly Shs3,000 and likely to rise as our neighbours Kenya face an even steeper grain deficit. The good politics of the community have seen traders running away from Ugandan store shelves where sugar is just Shs5,000 to Shs7,000 to Kenya where a kilogram fetches nearly Shs10,000. Struggling to close the gap in revenue collection, government has hit the money markets hard. Wise banks wary of risky lending prefer to make money off of government.
Government debt interest payments have spiked to nearly 40 per cent of the budget less than 10 years after winning debt relief in 2008. The total debt stock is alarming and has cast major government infrastructure initiatives like the SGR railway in negative light. At this point, it is difficult to say with certainty that the railway, pipeline and ongoing infrastructure developments can be implemented at the same time.
URA hit the final blow announcing it was still Shs200 billion off targeted collections. URA tax collections in the past decade have been padded by one-off revenue windfalls like the sale of crude oil the use of which proceeds have attracted controversy in the ongoing oil investigations in Parliament.
The inflationary pressures in the food sector are expected. A prolonged dry spell last year left many small holders without planting material. The drought hit livestock areas hard. It also turns out that the good politics of East Africa supplanted important policies on food security and mandatory storage of grains. Buying emergency food came with drastic cuts in government expenditure, yet government is the largest single consumer in the economy.
Maize, a common staple now, is nearly Shs3,000 and likely to rise as our neighbours Kenya face an even steeper grain deficit. The good politics of the community have seen traders running away from Ugandan store shelves where sugar is just Shs5,000 to Shs7,000 to Kenya where a kilogram fetches nearly Shs10,000. Struggling to close the gap in revenue collection, government has hit the money markets hard.
Wise banks wary of risky lending prefer to make money off of government. Government debt interest payments have spiked to nearly 40 per cent of the budget less than 10 years after winning debt relief in 2008. The total debt stock is alarming and has cast major government infrastructure initiatives like the SGR railway in negative light. At this point, it is difficult to say with certainty that the railway, pipeline and ongoing infrastructure developments can be implemented at the same time.
The resolution of Crane Bank at great cost to government through Bank of Uganda saved the banking sector from further haemorrhaging on bad debts; most big banks with the exception of Stanbic and Centenary banks, have seen profits plummet. Crane Bank affairs highlighted other structural problems in the economy. Just one out of the banks' top 50 managers was Ugandan.
This issue long swept under the floor under a permissive foreign directive investment regime is an issue in key economic sectors, including tourism, commercial agriculture and oil and gas. Uganda never publishes employment figures itself a shameful slap on BoU, the Uganda Bureau of Statistics and Labour ministry. So like the telecom networks who can't register and verify at the same, we really can't apply the right medicine to the right economic condition.
By Karoli Ssemogerere – Mr Ssemogerere is an Attorney-at-Law and an Advocate
DAILY MONITOR
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