This archive report was first published on 13 June 2020.
On June 11, the Ugandan government presented a budget aimed at reviving the economy after nearly three months of lockdown due to the COVID-19 pandemic.
The budget, worth $12 billion, includes tax waivers and funding for the business community, with a focus on supporting the agriculture sector for food security and export, making credit accessible to small businesses, and putting money directly into people's pockets.
Finance Minister Matia Kasaija stated that the budget is designed to 'stimulate the economy to safeguard livelihoods, jobs, businesses, and industrial recovery in the wake of the effects of the coronavirus pandemic.'
The government has allocated Ush45 trillion ($12 billion) for the 2020/2021 financial year, with a projected GDP of Ush138 trillion ($36.8 billion) by the end of the current financial year, growing at 3.1 per cent by the end of June.
Minister Kasaija emphasized that the budget addresses the three most critical aspects of Ugandan society: the people's welfare, the viability of farms and businesses, and the social ecosystem in which they exist.
The government plans to increase agricultural production to ensure food security and expand regional food exports, with Ush300 billion ($80 million) set aside for improved agricultural inputs and up-scaling extension services.
Additionally, Ush130 billion ($34.7 million) will be allocated for intensive public works in urban and peri-urban areas to create jobs for vulnerable individuals affected by COVID-19.
Organised special interest groups, such as the youth and women, will receive Ush256 billion ($68 million) from the government.
Furthermore, the government will provide Ush94 billion ($25 million) to improve credit and cash flows of micro-, small-, and medium-sized enterprises through Saccos and microfinance institutions.
Manufacturing, agribusiness, and other private sector firms will see an increase in access to credit at the Uganda Development Bank, which will be recapitalised with Ush1 trillion ($267 million) over the medium term.
The government will also push for banks to restructure loans to their borrowers facing liquidity constraints and reduce charges on mobile banking and mobile money transactions.
A total of Ush673 billion ($180 million) has been earmarked as payment of arrears by government to private sector firms starting next month to address liquidity constraints faced by government suppliers.
Controversial taxes like the Over the Top tax levied on social media and the mobile money tax have remained, but the government is encouraging the reduction of mobile money and other digital transactions fees.
The government will raise funds by tightening loopholes in its taxation system and borrowing both domestically and externally to achieve its revenue target of Ush21.8 trillion ($5.6 billion) for the next financial year.
