Civil society advises gov’t on unlocking potential of Uganda’s economy


The Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) Uganda has laid a strategy that they said can help government unlock the potential of the country’s economy.

In its Monetary Policy Statement for August 2022, BoU  noted  that the overall economic growth prospects have been dimmed further with increasing risks of a global recession, and weaker consumer and business sentiments as high inflation and commodity prices continue to erode households and business incomes and financial conditions continue to tighten.

To this, BoU said economic growth is now projected in the range of 2.5 – 3.0% in 2022 as compared to 4.6% registered in the financial year 2021/22 partly reflecting the effects of higher costs of production arising from rising fuel and transportation costs.

In a statement released on Thursday, SEATINI said whereas government has put in place several interventions towards responding to various crises facing the economy, unlocking the potential of Uganda’s economy will require holistic, robust and coordinated efforts at all levels and a rethink of some of the existing policies and practices.

“While we acknowledge the interventions and proposed strategies, we wish to note that they fall far short of salvaging and adequately addressing the ongoing crises and the adverse economic situation. There is disjointed planning, policy incoherencies and actions as there is a discernable delink between the policies and programmes put in place and the challenges on the ground,” SEATINI said.

They said this in a way frustrates efforts to unlock the potential of the country’s economy but also solve other crises .

Citing the Parish Development Model, the civil society organization said whereas it is aimed at  lifting 17.5 million Ugandans in 3.5 million households out of poverty through the total transformation of the subsistence households into the money economy, the  program is poorly conceived and designed to adequately responding to the actual inherent challenges of the rural economy.

“ There is inadequate preparedness in regards to the implementation of the PDM which manifests itself in the little understanding and conceptualization of the model among the people and policy makers.”

SEATINI also commented about the limited budget outlay to the agricultural sector and industrialization despite the country’s economy being reliant on agriculture.

They say over the years, little has been done to enhance agricultural productivity, promote value-addition, especially by supporting manufacturing, including agro-processing.

“ As such, Uganda’s agriculture sector is 90% rain fed and susceptible to the vagaries of the weather. Rainfall has become less reliable due to the climate crisis.”

The civil society organization also points at untamed and wasteful expenditures that it says cannot allow government achieve its goals to unlock the potential of the economy.

“The current economic downturn requires prudent utilization of our resources. However, even amidst the hard-economic times, government still maintains a bloated administration which continues to strain resources and challenge efforts towards effective revenue mobilization and investment into the social and productive sectors. The bloated government expenditure is at the expense of the much-needed social services economically harmful especially now when the economy is struggling.”

SEATINI also blames government for the low absorption of funds which they say has an effect on the economy.

“The Auditor General’s report for the financial year 2020/2021 revealed shs536.5 billion for 36 government projects failed to absorb funds availed to them for implementation of activities and as a result, a total of  shs431 billion  and shs105.5 billion remained on project accounts which increased the country’s indebtedness.”

According to SEATINI, harmful tax incentives and exemptions are also not helping the current precarious situation the economy is in but has on the other side led to revenue losses.

Way forward

However, according to SEATINI, government ought to address its policy incoherencies in planning and actions.

“Parish Development Model should be redesigned to address the challenges of production, productivity and value addition and utilization of the available markets. The PDM should also be piloted to identify specific problems related to its implementation to inform the necessary adjustments of the model before the national roll-out,” SEATINI said.

“Government should also ensure market entry into the available markets through negotiating and signing product specific agreements. “

SEATINI has also asked government to increase the budget for agriculture to at least 10% of the national budget to help meet the country’s commitment to the Maputo Declaration.

“This will ensure that it can address issues of food insecurity, postharvest losses, access to extension services and access to seeds.”

The CSO also urges government to implement program based budgeting, invest more resources in the productive sector to create more jobs, enforce existing policies in regards to protecting the environment and also  rethink economic activities such as sugarcane and palm oil growing that compromise the environment.

“There is need to implement relevant policies to address climate change and protection of the environment. Government should mitigate environmental degradation and restore the national forest cover and ensure sustainable environmental management and reduce on the administrative structures and halt and merge some constituencies to reduce administration costs,” SEATINI said.

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