KPMG urges entrepreneurs to monitor global shifts

Uganda’s business community has been urged to closely monitor global economic shifts and align local strategies to harness emerging opportunities.

This call was made during KPMG’s annual tax insights dinner, where experts analysed the sh72 trillion national budget presented earlier yesterday and its broader implications for businesses.

Asad Lukwago, a senior partner at KPMG, emphasised the importance of understanding global dynamics when assessing national policies.

“We are not an island. The global dynamics do affect our businesses but also even at household level—whatever we consume is influenced by these forces,” Lukwago remarked.

He pointed to significant shifts in global trade following recent political changes in the United States, including new tariffs and trade barriers that could reshape supply chains.

Lukwago noted that such developments might create both challenges and openings for African economies.

“For Africa and Uganda specifically, the Chinese will have to look for other markets, and that can either bring competition or opportunity. If, for example, the Chinese can no longer sell textiles or aluminium to the US, they are likely to turn to our markets, intensifying competition for local suppliers but potentially benefiting consumers through greater choice and improved quality,” he explained.

Lukwago further highlighted the chance for Ugandan exporters to tap into the American market, as the US seeks alternatives to Chinese goods.

“It’s a big opportunity for Uganda and Africa to fill that void in the US market or to supply products that China has traditionally sourced from the US,” he added.

Lukwago pointed out that many countries are increasingly bypassing the US dollar through currency swaps with China.

“Any business people should explore if they can import or export without necessarily relying on the dollar. This could be facilitated by future government policies,” he suggested, urging businesses to stay informed on developments in international trade and currency frameworks.

Turning to Uganda’s new national budget, Lukwago commended the government for maintaining macroeconomic stability.

“Inflation levels are under control, GDP growth is strong, and the Uganda shilling remains stable against major currencies. The ship has been steered steadily over the past couple of years,” he said.

However, he cautioned against rising public debt, describing it as Uganda’s “Achilles heel.”

He stressed the need for fiscal discipline, both in revenue collection and resource utilisation.

“The government must ensure that budget allocations align with the priorities set out in the new National Development Plan 4. Too much of our budget still goes towards administrative expenses instead of developmental sectors,” Lukwago observed.

He urged government and policymakers to ensure consistent implementation of plans and prudent use of resources to sustain growth while avoiding debt distress.

Dr. Fred Muhumuza, an Economist, called for urgent and deeper structural reforms to support Uganda’s fiscal and economic resilience.

He emphasised that Uganda’s budget must be seen as part of a continuum rather than a one-off plan.

He also urged policymakers to rethink their approach to job creation, pointing to declining labour force participation rates as a worrying sign.

“If the goal of previous budgets was job creation, why are fewer people participating in the labour market?” he asked.

He called on government to recognize the strategic role of remittances in Uganda’s economy, highlighting that the country now earns more from remittances than foreign direct investment.

“Remittances are a low-hanging fruit. Instead of chasing FDI that comes with heavy demands, let’s focus on preparing Ugandans to work abroad and send money home,” he said.