Henry Mukasa and Milton Olupot
16 November 2008
Kampala — MEMBERS of Parliament have expressed worry at the reported slowdown in the national economy.
The MPs said the absence of rural banking services, high lending interest rates and a decline in agriculture productivity signalled an economic downturn.
The legislators also accused finance minister Dr. Ezra Suruma of giving the nation false hope that the economy was robust and would not be affected by the international economic crisis.
Suruma made the statement to Parliament on October 20.
The MPs made the remarks while debating a report on the economy filed by a committee of Parliament.
Cecilia Ogwal (Independent) saluted the committee on national economy which prepared the report for disagreeing with Suruma how the global recession would affect Uganda's national budget. "The Government would then come up with a balancing factor," Ogwal said.
The Dokolo MP called for more investment in agriculture and criticized government for selling the former Uganda Commercial Bank (UCB), which she said used to give low-interest loans to rural farmers.
Ogwal said the opposition MPs' arguments against the sale were ignored when the matter was debated in Parliament.
She said foreign banks would not open branches in rural areas to address the needs of farmers. "They invest only where there is profit."
Michael Mabikke (Independent) said the national economy was remotely integrated with the global economy, and would be affected by the meltdown.
Despite running a market economy, Mabikke said, the Government should not look on as prices soar but regulate prices of essential commodities. He cited prices of fuel, electricity, telephone services and water.
The Makindye East MP said the lending interest rates, standing at 25% in most commercial banks were too high to encourage investment and development.
He said citizens do not appreciate rosy statistics that are not translated into their wellbeing.
"Their wallets are not happy," Mabikke complained. "Government tells them 'go down and work' but it has not created jobs. A government is judged by how many jobs it has created," Mabikke observed.
Owor Amooti Otada (NRM) said the figures in the report pointed at the disparity in incomes.
"The gap between the rural poor and urban rich is widening."
He said subsidies, incentives and concessions will prop up production in the sector.
Otada said he was amazed when a senior citizen he did not name created anxiety when he said that high prices of commodities and food were a boon for farmers.
"When prices of essential commodities are high then the (perceived) high income from his produce will do little for the farmers," Otada pointed out. He said Uganda might need to emulate Nigeria and recall its national budget for recasting.
"Otherwise we shall fall in a bigger problem on the false hope that 30% budget support from donors will come," he warned.
He said a barrel of fuel costs $56.6, much lower than a past $150 and wondered why decreases in costs of fuel on the world market are not reflected in transport fares in Uganda.
He pointed out that too much hope has been pinned on the expected flow of oil in Hoima but he doubted whether the investment would bring immediate returns. Aol Betty Achan (FDC) said it was distressing that agriculture where the country should have had a niche is declining.
She said Suruma's assertion that the agriculture ministry had failed to expend sh700b could explain the anomaly.
"I want to time that performance of the ministry to that laxity," Achan contended.
Of all MPs who debated on Thursday, it was only trade minister Prof. Ephraim Kamuntu who said the report showed government has almost met its macro-economic targets.
"There is nothing more honourable than a government meeting its targets," Kamuntu said. "The road to transformation is very clear."
Transport minister Simon Ejua asked Ugandans to revise their spending habits.
The financial crisis, which has ravaged the US and Europe, has spread to Asia and Africa, sending stock prices crashing.
The President-elect of the US, Barack Obama says the economic meltdown will be his priority when he takes over the Oval Office on January 20, next year.
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