Minister of Finance Planning and Economic Development Hon Matia Kasaija on Thursday presented the approved budget for the Financial Year 2017/18, seek expressing confidence about the country’s prospects to attain the Middle Income Status by the year 2020.
The Shs. 29Trillion Budget was approved amidst high contestation by parliamentarians on May 31st 2017.
While reading the budget at the Kampala Serena Hotel, find Minister Kasaija pointed out that the country’s GDP per capita will need to jump to USD 1,039 for the country to graduate to the Middle Income Status.
On top of this, the minister listed a number of huddles that will have to be overcome, for this to be realized, among which are; the endemic corruption, climate change, and the currently sluggish economic growth.
By 2020, Uganda’s population is expected to have hit 45 million people in 2020, which means that the size of the economy will need to grow by an additional USD 18 billion in the next three years.
Achieving middle income status, Kasaija said will require among others, dealing with climate change, which is key to agriculture in addition to reorganizing the sector.
He also pointed out that financial sector reform will be necessary to lower interest rates, and reduce the cost of capital to the private sector.
“Delays in implementation of key Government projects and programmes must be eliminated,” He added. “Corruption by elements of the public service that frustrate investors must be eradicated.”
Despite the current slowdown in economic growth, Minister Kasaija projects that the economy will rebound to a growth rate of 5.5% in FY 2017/18 and eventually to at least 7% in the medium term.
This he based on apparent improvements in agricultural production and productivity, and the recovery in aggregate domestic demand and private sector credit.
The prospect of oil production also shines a ray of hope on the much needed recovery in growth and ultimately the 2020 goal.
The Minister listed a number of measures that will be undertaken to attain the middle income status which will entail Industrialization through Value Addition which will be anchored on agriculture and agro-processing; Increasing production and productivity in the key primary growth sectors of Agriculture, Tourism and Oil, Gas and Minerals and also Enhanced Private Sector Development as well as Increased Public Sector Efficiency.