Uganda's foreign exchange hits $ 3.1 billion

 By Vision Reporter

Uganda’s foreign exchange reserves have improved, finance minister, Maria Kiwanuka, has said.

 Presenting the 2014/15 national budget on Thursday, the minister said that foreign exchange jumped from US$ 2.9 billion in June 2013 to US$ 3.1 billion, expected at the end of June 2014.

“This is equivalent to 4.2 months of future imports of goods and services.  Government’s medium term objective is to maintain a level of foreign exchange reserves of at least five months import cover, which adequately provides a buffer against external shocks,” the minister said.

The minister however, reported that Uganda Revenue Authority registered a shortfall of sh475b for this year.  

“Net URA revenues for FY2013/14 were projected at sh8, 578b, but collections are estimated at sh8, 104b which represents a 94% of the projected revenue,” the minister submitted.

She attributed the underperformance of revenue collections to lower than projected growth in the economy, which affected particularly Value Added Tax and Corporate Income Tax.

However, URA revenue collection increased by 13.4% this fiscal year.

The minister said in the nest fiscal year, Government will take corrective measures geared towards improving revenue performance.

This will include strengthening tax revenue administration, and new tax revenue enhancement measures.

The domestic financial markets for the FY2013/14 budget amounted to sh1,747.8b, on a net basis to supplement domestic revenues for the infrastructure investment projects especially roads.  

In the coming financial year, the minister said, the net domestic financing will amount to sh2,539.1b  which includes a drawdown of the energy fund to finance the Karuma and Isimba hydropower projects,  and reflects  an additional sh791.3 billion over and above the approved levels in  Financial Year 2013/14.

In the next financial year, US$ 1,017 million is in external support. Project support constitutes US$991 million. This represents general budget support amounting to US$ 25.7 million, excluding debt relief, has been committed by bilateral Development Partners.