Uganda's economy is moving forward, says Museveni

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Uganda's economy is moving forward, says Museveni
President Museveni in Lwengo.

According to President Yoweri Museveni, the government has been intentional to in implementing various programs that have enabled the economy to grow from $1.5 billion in 1986 to $55 billion by the foreign exchange method and $180 billion by the purchasing power parity method.

And as a result, Uganda has entered the lower middle-income status with a with a per capita income of USD 1,182.

By Hakiim Wampamba.

President Museveni rose to the rostrum on  June 6 at Kololo Ceremonial Grounds to hail Ugandans for reaching the lower floor of middle income status which when maintained for three consecutive years may lead the Brenton Woods institution, the world bank to declare Uganda a lower middle-income class country with the income per capita being 1,152.

“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," he said.

"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."

However, in an interview, Francis Muhiire, a lecturer of Economics at MUBS told us that this is not the first time 2022, Uganda entering middle income status but the key question is, it re reality of ground?”

In 2020, Uganda’s GDP was $33.8 billion and grew to $40.51 in 2021. In 2022, the GDP grew to $45. 57 billion in the 2023, state of the nation address, the President highlighted that in 23/24 Uganda's GDP was projected to grow up to Shs207.22 trillion about $55.17 billion.

Whereas these figures sound impressive, to some Ugandans’ the reality is different, Sarah Kagingo, vice chairperson of Private Sector Foundation Uganda, said, 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 percent that is redundant capacity of 46 percent 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 “

Our production of sugar is now 600,000 metrics tonnes. However, the internal market is only 380,000metric tonnes. Who is to buy the surplus sugar of 220,000 metric tonnes?

The milk production is now 5.3billion litres. Who is to buy the extra – 4.5 billion liters since the internal demand is only 800million litres? The cement production is now 6.4 million metric tonnes and yet the internal demand is 2.4 million tonnes. Who is buying the surplus? How about 5the steel products?

The internal demand is 1.5 million Metric tonnes, yet annual production of steel products (mitayimbwa etc.), although still at 610,000 metric tonnes, leaving a deficit of 890,000 metric tonnes, it will soon be about 3 million metric tonnes with the new vertically integrated steel industries, using the high- grade obutare (iron ore) of Muko in the Rubaanda area.

Who will buy that surplus steel? The products of the new vertically integrated factories will completely wipe out the need for importing high quality steel for hydro- power dams, the railway, high rise buildings, etc., that need very strong steel different from the steel of the recycled steel products from scrap metal.

Even now, we also import steel ingots and add value. Some of this steel is re-exported to the region. The answer for all these questions is that, it is, mainly, East and Central Africa that are buying the surplus. The COMESA area is buying goods and services worth $2.157 billion from Uganda.

To the President trade barriers in the East African Community and these 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 $24.60 billion about Shs93.38 trillion.

Of this, with external debt accounted for $14.64 Billion about Shs55.37 trillion while domestic public debt was $9.96 billion or 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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