Bbumba making the right noises but...
Jun 11, 2009
Finance minister Syda Bbumba read her first budget yesterday. She read the budget in the context of a difficult global economic situation, which has begun to affect our economy.
Finance minister Syda Bbumba read her first budget yesterday. She read the budget in the context of a difficult global economic situation, which has begun to affect our economy.
Ever since the global financial crisis burst in September last year finance ministers have been walking a tight rope, having to balance between stimulating economic growth while giving much away in terms of tax concessions.
Uganda’s economic growth is expected to come in at 6% this year, lower than the 9.0 percent average of the last six years.
The slower growth in the general economy is a result of declines in the growth of the manufacturing, transport, trade, services and construction sectors.
The budget’s theme “Enhancing strategic interventions to improve business climate and revitalise production to achieve prosperity for all†set the right tone.
In addition tax concessions to donor funded agricultural, education and health projects, the extension on relief for hotels, health and education institutions as well as reduction on excise duty for locally produced beers showed government was putting its money where its mouth is.
This and other measures will go some way to keeping the economy on a growth path in these hard times, but the shepherding of the economy is a holistic exercise and should not be left entirely to the finance ministry.
It is all very nice to give tax relief to strategic sectors of the economy but government still needs to kick in with determined intervention in key areas as well as provide a robust strategic framework to guide its interventions and the economy towards exploiting its comparative and potential competitive advantages.
This year’s budget shows how far away government has moved away from price controls to prescribing measures to improve the business environment, however government needs to foster greater coordination between various ministries and agencies backed by a far-sighted national strategy for enduring results.
Ever since the global financial crisis burst in September last year finance ministers have been walking a tight rope, having to balance between stimulating economic growth while giving much away in terms of tax concessions.
Uganda’s economic growth is expected to come in at 6% this year, lower than the 9.0 percent average of the last six years.
The slower growth in the general economy is a result of declines in the growth of the manufacturing, transport, trade, services and construction sectors.
The budget’s theme “Enhancing strategic interventions to improve business climate and revitalise production to achieve prosperity for all†set the right tone.
In addition tax concessions to donor funded agricultural, education and health projects, the extension on relief for hotels, health and education institutions as well as reduction on excise duty for locally produced beers showed government was putting its money where its mouth is.
This and other measures will go some way to keeping the economy on a growth path in these hard times, but the shepherding of the economy is a holistic exercise and should not be left entirely to the finance ministry.
It is all very nice to give tax relief to strategic sectors of the economy but government still needs to kick in with determined intervention in key areas as well as provide a robust strategic framework to guide its interventions and the economy towards exploiting its comparative and potential competitive advantages.
This year’s budget shows how far away government has moved away from price controls to prescribing measures to improve the business environment, however government needs to foster greater coordination between various ministries and agencies backed by a far-sighted national strategy for enduring results.