Experts react to Museveni's stance on Uganda's economy

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Experts react to Museveni's stance on Uganda's economy
President Museveni speaks to traders on Tuesday.

President Yoweri Museveni rose to the podium during the state of the nation address at  Kololo Ceremonial Grounds to hail Ugandans for reaching the lower floor of middle income status .

“Uganda has just entered the middle-income status, we are currently on the lower ground. There are, however, still some trade barriers in the East African Community and these are hindering our development. I urge the community to remove these bottlenecks so as to have one common [African] market. And with this, we can be able to convince other countries to work with us as a continent” Museveni said

However, in an interview, Francis Muhiire, a lecturer of Economics at MUBS told us that this is not the first time after in 2022, Uganda entering middle income status .

In 2020, Uganda’s GDP was $33.8 billion USD and grew to USD 40.51 in ,2021.

In 2022, the GDP grew to 45. 57 billion USD in the 2023, state of the nation address, the President highlighted that in 23/ 24 Uganda's GDP was projected to grow up to UShs.207.22 trillion about 55.17 billion USD.

Whereas these figures sound impressive, to some Ugandans’ the reality is different.

Sarah Kagingo the Vice Chairperson of Private Sector Foundation Uganda said that  the GDP keeps souring but slow growth being registered across the various sectors, a case in point the manufacturing sector.

“We recently carried out a survey together with MasterCard and discovered that manufacturing plants, these factories are operating at 54% that is redundant capacity of 46 % the report also highlighted that the reason for this low capacity is ineffective demand for Ugandan made products, why because they are produced at high costs that makes their final price high and an affordable," Kagingo said.

Museveni said Uganda produces a number of goods in surplus and many dont have market.

To the president, trade barriers in the East African Community are hindering development of the Ugandan economy and Africa as a whole and something must be done

“The other day in my speech while in Nairobi, I was able to castigate the African tendency to export unprocessed minerals. Here [Uganda] I have banned it, if a mineral is not processed, it is not exported and it should apply to all other raw materials.”

The souring debt burden, that eats into the domestic revenues collected is yet another economic concern.

As at end December 2023, the stock of Public debt stood at USD 24.60 billion about Shs. 93.38 Trillion shillings. Of this, with external debt accounted for USD 14.64 Billion about shs55.37 trillion while domestic public debt was USD 9.96 Billion approximately shs38.01 trillion .

On the issue of traders that were on rampage, closing shops over taxation, high interest rates among others the president said that the financial support is for only large-scale manufacturers who create jobs and save Uganda from begging ‘Okushaka”

"We don’t give loans to importers of perfumes, and dead people’s clothes (second hand). I was having a big discussion with them here. I can’t give soft money to somebody to import dead people’s clothes and import perfume, whiskey. No. The Uganda Development Bank money is for manufacturing, agriculture and for some of the services. If you want to import perfumes, go to the commercial banks."

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