17 June 2019

Uganda: 6 Percent Growth Not Good Enough, Experts Say

Kampala — Analysts have questioned the authenticity of economic growth figures that the Minister of Finance Matia Kasaija quoted while presenting the Budget Speech late last week.

In a post budget discussion, organised by Ernest & Young, analysts said the 6 per cent was not good enough to deliver required growth.

In the Budget Speech last week, Mr Kasaija said Uganda's economy had picked up, growing at more than 6 per cent per annum over the last two years, noting that it had pushed average incomes of Ugandans to $825 per annum in the 2018/19 financial up from $800 in the 2017/18 financial year.

However, during the discussion, experts observed that such at a rate the economy should have generated more than what was delivered.

"What is good enough is a sustained growth of 12 per cent over 10 years and not what we are seeing or being told," Dr Fred Muhumuza, an economist and one of the panellist, said, adding that talk of 6 per cent was not good enough to cause meaningful impact.

Mr Gideon Badagawa, the Private Sector Foundation Uganda executive director, said the additional income of $25, speaks to the problem of the economy and a revelation of how low the purchasing power of the population is.

At this rate, he said, it will take forever for the country to get where it wants to be.

Mr VG Somasekhar, the Airtel managing director, said the economy should be growing at between 8 and 10 per cent annually, noting that Airtel had not particularly performed as well as it should have done.

The discussion was chaired by Mr Mohammed Ssempijja, the Ernst & Young team leader, who said that whereas the 6 per cent was rather reasonable in a grand scheme of things, was short of desired impact.

Theme of the budget

The experts also poured cold water on the theme of the 2019/20 financial year budget, on grounds that the 'Industrialisation for Job Creation and Shared Prosperity" mantra is not new.

Mr Badagawa said the theme without enforcement will be useless while Mr Somasekhar said that whereas the theme was fantastic, government had not put in place measures that will ensure it is implemented.

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