In a highly anticipated press briefing held at the Ministry of Finance Headquarters, the Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi, announced the release of funds for the First Quarter of FY 2024/25.
In his address. Ggoobi highlighted Uganda’s remarkable economic recovery and projected continued growth, signalling a promising future for the nation’s financial stability and development.
“Uganda’s economy has fully recovered from various shocks, crises, and false alarms,” he continued, his voice resonating with optimism. “You recall that when Covid-19 struck, leaders feared it would be worse than the financial crisis of 2008 and potentially as severe as the Great Depression of the 1930s. Instead, we have witnessed a fast and strong recovery.”
He highlighted the impressive growth figures from the last financial year. “GDP grew by 6 per cent in FY 2023/24, up from an average of 4.1 per cent between FY 2019/20 and FY 2022/23. This is a significant increase from the 3.0% growth we had seen previously. The services sector grew by 6.6%, up from 5.9%, while the industry sector increased by 5.8%, up from 4.0%. The agriculture, forestry, and fishing sectors also saw growth of 5.1%, compared to 4.5%.”
The Secretary continued, detailing the high-frequency indicators of economic activity. “In FY 2023/24, the Purchasing Manager’s Index (PMI) averaged 52.7, remaining above the 50-mark threshold and indicating an improvement in business conditions. The Business Tendency Index (BTI) also remained above the 50-mark threshold, showing investor optimism about the Ugandan economy.”
His tone grew even more optimistic as he projected future growth. “Economic growth in FY 2024/25 is projected between 6 and 6.5 per cent, rising above 7 per cent in the subsequent years. This will be driven by our Tenfold Growth Strategy, which focuses on increased investment and growth in agro-industry, tourism development, mineral development including oil and gas activities, and science, technology, and innovation (STI) including ICT.”
He discussed the country’s success in containing inflation. “At 3.9 per cent in June 2024, inflation has been contained within the target thanks to strong coordination of monetary and fiscal policies. Uganda has maintained good food supply chains, leading to low food crop inflation.”
He went on to explain the proactive industrial policy that has added value to agricultural and mineral commodities, replaced some imported manufactured products, and boosted export earnings. “In 2023, Uganda exported cement worth USD 91.1 million, sugar USD 75.8 million, plastics USD 62.6 million, soap USD 33.9 million, and beer USD 25.8 million. The increased inflow of foreign exchange has led to a relatively stable shilling, with the exchange rate averaging Shs 3,787 per US dollar last month, down from Shs 3,857 in March 2024.”
He emphasized the government’s efforts in stabilizing the economy. “These deliberate efforts have complemented the Bank of Uganda’s tight monetary policy actions and improved global economic conditions to arrest inflation. Commercial bank lending interest rates for shilling-denominated loans have reduced to 17.7 per cent in April 2024 compared to 19.3 per cent in April 2023. Interest rates in the domestic debt market have remained broadly stable, averaging 11.2 per cent on one-year Government Treasury Bills.”
Ggoobi reaffirmed the government’s commitment to supporting various sectors. “Government is continuing with the provision of several funds to support micro-enterprises, SMEs, farmers, and large businesses to access patient and low-cost investment capita.”
Highlight of the First Quarter release of Financial Year 2024/25.
The approved Budget for FY 2024/25 amounts to Shs 72.137 trillion as summarised as; Wage Shs7,934.75bn. Non-Wage Shs13,633.00bn. Government Development Shs5,902.33bn. External Financing – Devt Shs9,583.46bn. Debt and Treasury Operations Shs34,589.16bn. Arrears are shs199.90bn and Local Revenue is Shs293.90bn.
The Government’s Discretionary Budget (excluding debt and treasury operations, external financing and Local Revenue) is Shs 27.670 trillion.
According to Ggoobi, the Q1 Expenditure Limits for FY 2024/25 were derived from the Work Plans and Procurement Plans of Ministries, Departments and agencies and taking into consideration the available resources for Q1 of FY 2024/25.
For this Quarter (July September 2024), Shs 5.899 trillion, has been released representing 21.3% of the discretionary budget as follows:
Wage-Shs1,990.28bn. Non-Wage-Shs3,371.91bn. GoU Development Shs337.53bn and Arrears Shs199.83bn.
The key highlights of the release per category
At least Shs 1.990 trillion to cater for wages and salaries across the Government
Non-Wage Recurrent- Shs 323.50 billion for Pension and Gratuity. Shs 308.75 billion to Local Governments including Education Capitation Grants (Shs. 112.28 billion) to cater for the Third Term of the school year; Shs 95.26 billion to all Public Universities, Uganda Management Institute and Law Development Centre in line with the semester requirements.
Shs 43.77 billion for examination bodies i.e. Uganda National Examination Board (UNEB) and Uganda Business and Technical Examinations Board (UBTEB);
All Missions Abroad Shs 100.58 billion (representing 50% of the Annual Budget) to hedge them against loss of poundage; National Council of Sports – Shs 124.63 billion including payment of AFCON commitment fees, equivalent to USD 30 million.
Health institutions’ operational funds have been released for Referral Hospitals Shs 22.58 billion. Uganda Cancer Institute Shs 12.31 billion. Uganda Heart Institute Shs 7.06 billion. Uganda Blood Transfusion Services (UBTS) – Shs 4.1 billion. Subventions under MoH Shs 21.85 billion for medical interns’ salaries; In addition, Shs 173.68 billion has been released to National Medical Stores (NMS) for the purchase of essential drugs and medicines.
Operational funds for Security institutions include; the Ministry of Defense and Veteran Affairs Shs 253.30 billion. Uganda Police Force Shs 56.43 billion. Uganda Prisons Services Shs 44.79 billion. Internal Security Organ (ISO)-Shs 28.08 billion and Shs19.44bn for External Security Organ (ESO).
Parliament-Shs 153.60 billion while Judiciary Shs 47.40 billion, Auditor General received Shs 11 billion.Science Technology and Innovation Shs 124.63 billion. Uganda National Oil Company (UNOC) – Shs 124 billion for Equity acquisition in the East African Crude Oil pipeline (EACOP).
Domestic arrears amounting to Shs 199.83 billion and the International Court of Justice (ICJ) award to DRC of Shs 247 billion.
The government’s Development Budget (Development funds) have been provided to cater for the following; Contract staff salaries of Shs 21.76 billion. Uganda Revenue Authority-Shs 14.34 billion. Kampala Captial City Authority-Shs 22.67 billion
Ministry of Finance Planning and Economic Development (MO FPED) also received Shs 14.53 billion to cater for the Resource Enhancement and Accountability Programme (REAP) and Uganda Inter-governmental Fiscal Transfers Programme (UGIFT). Local Government grants-Shs 229.27 billion, representing one-third of the development grant allocations. All Missions abroad Shs 29.4 billion.
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