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Uganda’s national budget strategy for the fiscal year 2024/2025. Key points include a focus on economic growth, transitioning to a manufacturing-based economy, and priorities such as the Parish Development Model, agriculture, oil, tourism, and private sector support while addressing debt concerns.

The Government has revealed key priority areas of focus in the national budget for 2024/2025 financial year (FY). To accelerate economic growth, the FY 2024/25 budget will focus on building an integrated independent and self-sustaining economy by ensuring security, good governance and the rule of law as well as, maintaining macroeconomic stability.

The government also intends to use the budget, to boost household incomes through the Parish Development Model (PDM), commercialisation of agriculture, development of oil and gas industry, investment in tourism and support of the private sector among other priority areas.

“The ultimate goal of the Budget Strategy for FY2024/2025, is to accelerate economic growth to at least 7% in the medium term with the ultimate goal of building an independent, integrated, and self-sustaining economy,” finance minister Matia Kasaija said.

Unveiling the strategy in Kampala on Thursday, Kasaija said this will involve transitioning from a raw-materials-based to a manufacturing and knowledge-based economy; as well as improving the environment of doing business in Uganda and making it competitive.

According to the strategy, the total resource envelope for the next financial year’s budget will amount to shillings 52,72 trillion compared to shillings 52.74 trillion for the current financial year (2023/2024).

Presenting the budget strategy, during the national budget conference in Kampala, Kasaija said due to the large debt servicing costs, the Government resources available for allocation have reduced to shillings 21.73 trillion for FY 2024/25, from shillings 25.2 trillion.

“Other emerging government priorities will be financed within the principles of the fiscal consideration agenda,” Kasaija said.

The strategy indicates that preliminary domestic revenue is projected to increase to shillings 29.9 trillion in FY2024/25 from shillings 29.6 trillion in the current financial year.

The Budge Strategy for FY 2024/2025 outlines interventions required to achieve a faster socio-economic transformation in Uganda.

Just like under the current financial year, the government has maintained the theme for the implementation of next year’s budget. The theme according to Kasaija will be: Full Monetisation of Uganda’s Economy Through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access.

Strategic interventions

The implementation of strategic interventions such as PDM for full monetisation of Uganda, development of the minerals sector, agro- industrialization and manufacturing among others, will spur economic growth to 6% by the end of FY2023/24 and to 6.5% in FY2024/2025 and therefore, accelerate to an average of at least 7% over the medium term.

“This will largely be driven by growth in industry, services and agriculture sectors of the economy. On that account, the size of the economy is expected to grow from shillings 184.3 trillion in FY2023/24 to shillings 234.44 trillion in FY 2024/2025, equivalent to $ 63.36 billion at market prices,” Kasaija said.

According to the government, during the next financial year and beyond, the strategy of implementation of the PDM will be strengthened to ensure all the seven pillars are effectively implemented by the respective MDAs for the attainment of the intended goal of moving all people from non-cash to cash economy.

For improved human capital development, the Government during the next financial year intends to prioritise health, education and water for the well-being of Ugandans.

“We are looking at fast-tracking the establishment of the National Health Insurance Scheme (NHIS) and improve the allocative and technical efficiency in the provision of financial resources in the health sector with focus on prevention against curative,” Kasaija said.

Infrastructure

Under infrastructure, the Government plans to reduce the unit costs for the construction of transport infrastructure in order to reduce the burden on the overall resource envelope.

The government also plans to expedite the rationalization of Government Agencies to create efficiency gains with and improve coordination as well as ensure effectiveness and efficiency of public resource utilisation.

“This will also include the non-creation of new administrative units within the spirit of Rationalization of Public Expenditure (RAPEX),” Kasaija explained.

The FY2024/25 budget will according to the government prioritize Climate Smart Agriculture. This has included the provision of $354 million this financial year for Mechanisation ($121 million), Seed multiplication and research $47 million.

Desired economic growth

Prime minister Robinah Nabbanja said the Government, with support from development partners has put in place the environment and key interventions to drive the desired economic growth.

She said: “Working through the parish development model, Emyooga, provision of financial services through the Microfinance Support Centre and other village-based technologies, we shall be able to create more jobs and wealth”.

According to Nabbanja, the Government is committed to bringing down the public debt to sustainable levels.

“Our major task now is controlling non concessional borrowing through effective implementation of the medium-term debt reduction strategy,” Nabbanja said.

According to the parliamentary report on the Annual Budget estimates FY 2023/24 the country’s debt stock has increased from shillings   78.79 trillion recorded in FY 2021/22 to sh80.77 trillion in the first half of FY 2022/23 representing a 2.5% increase.

Members of the Civil Society Budget Advocacy Group (CSBAG), implored the Government to invest more in domestic revenue mobilization as well as reduction in domestic borrowing and wasteful expenditure.

“Let us ensure standards, can we have a price list for goods, imagine a pen being costed differently by different government agencies,” Julius Mukunda, the executive director of CSBAG, said.

The president of the Uganda local government Association (ULGA), Richard Rwabuhinga, said local governments were stuck with over shillings one billion allocated to districts and municipalities to rehabilitate roads.

He said there was a change in the name from rehabilitation to road maintenance, something that has caused confusion.

Representing local development partners, Suzan Ngongi Namondo, the UN resident coordinator to Uganda implored the government to allocate enough resources towards human capital development.

For proper implementation of the budget, the development partners pledged offer capacity building should need arise.