July 24, 2024

Uganda’s economy to grow by 6% – Kasaija

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The Minister for Finance, Matia Kasaija has said Uganda’s economy is projected to grow at 6 percent in the financial year 2024/ 2025.

“Next financial year, the economy is projected to get back to Uganda’s steady-state growth potential of between 6.4 and 7 percent, and double digit over the next five years,” Kasaija said on Thursday during the budget reading.

The minister told parliament that in the next financial year, the country’s GDP will further expand to Shs 225.5 trillion ($60 billion).

He however said these numbers exclude the anticipated oil and gas revenues as well as the planned interventions to grow the economy tenfold.

The growth

Kasaija told parliament that the growth will be driven  by increased oil and gas activities as we move towards first oil production in financial year 2025/2026 among other factors.

“The growth will also be driven by the growth in exports, supported by the increase in regional trade in the EAC and COMESA, intra-Africa trade, and harnessing existing and new trading partners in the Middle East and Asia.”

He noted that increase in tourism activities supported by investment in tourism infrastructure, branding and marketing, and effective implementation of the Meetings, Incentives, Conferences and Events (MICE) programme will also help drive Uganda’s growth.

Kasaija also mentioned agro-industrialisation and light manufacturing supported by access to affordable credit through Uganda Development Bank (UDB), investments supported through Uganda Development Corporation (UDC); the Parish Development Model, small business recovery fund, Emyooga, the Presidential Industrial Hubs for Youth Entrepreneurs, and programmes to support exporters as well as growth and productivity of women enterprises.

The minister however said Uganda’s growth prospects are threatened by climate change affecting agricultural production and infrastructure.

He noted that regional and global geopolitical tensions, high interest rates which constrain access to affordable debt, and fluctuations in global commodity prices will also threaten Uganda’s growth prospects.

“To minimise the effects of these risks, government is implementing climate change adaptation measures, exploring cheaper sources of financing including climate finance, and ensuring frugality in government expenditure,” Kasaija said.

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