A report released on Wednesday, on Uganda’s spending by the Ministry of Finance, Planning and Economic development makes it clear that the economy has experienced recovery in the second quarter of the financial year 2021/2022.
The report was released by the permanent secretary in the finance ministry, Mr. Ramathan Ggoobi. It indicates how different sums of money obtained from various sources of revenue, are apportioned to various sectors. Here are the major takeaways;
It indicates that the economy experienced a sharp rise in the coarse of the financial year 2020/2021, contrary to what was experienced in the year 2019/2020. This was also based on the report released by the Uganda Bureau of Statistics released on October 7th, 2021. “The numbers show that there has been gradual recovery of the economy. “The economy grew by 3.4 percent during FY 2020/21 compared to the growth of 3.0 in FY 2019/20,” indicates the report.
The report also shows a growth in the county’s economy. “The size of the economy in nominal terms increased to Ush 147,962 Billion in FY 2020/21 from Ushs. 139,689 billion in FY 2019/20,” it reads.
This marvellous performance achieved was as a result of the partial re-opening of the economy and relaxation of Covid-19 rules, allowing trade to flourish further, bringing in the badly needed revenue. “Performance so far, this financial year indicate that the economy has continued on its recovery path, following the partial reopening of the economy as shown by high frequency indicators of economic activity,” reads the report.
According to the report, the purchaser’s Managers index (PMI), which is the index of prevailing direction of economic trends in the manufacturing and service sectors, also improved. “The Purchaser’s Managers Index (PMI) improved to 52.5 in September from 50.2 in August, mainly on account of rising new orders and increased output by business as normal activity gradually resumed following the lockdown in July 2021,” the report specifies.
Inflation was also kept under check, according to the report. It is maintained that this phenomenon remained stable during the financial year 2021/2022. The report also indicates that it is expected to rise through 2021, but projected to remain below the 5% target. “Inflation has remained low and stable. Headline and core inflation averaged 2.3% and 3.1% respectively for the last 12 months to September 2021,” stipulates the report.
According to the report, the country’s exchange rate has also remained relatively stable. It also shows that the Ugandan shilling gained value, against the US dollar. “The exchange rate has remained low and stable. However, the shilling has been appreciating, averaging 3.530.6/ USD in September, due to increased foreign exchange inflows,” specifies the report.
Mr. Ggoobi also notes in the report, that the government intends to offer financial assistance to the private sector through interventions like the small business recovery fund to ensure continued recovery. He also stipulates that the economy is projected to grow at 3.8% above the outtum of 3.4% registered in financial year 2020/21.
The report shows that Shs. 5811.08 billion has been released for quarter two expenditure, which represents 25% of the budget of government of Uganda.
Of these funds, Shs. 294.69 billion is apportioned to the health institution and social ministry, Shs.184.75 billions to Agriculture and industry. Shs. 437.10 billion is put aside for governance, Revenue and Collection, while 256.8 billion reserved for Judiciary, legislature and EC missions abroad.
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