In a wide bid to mobilise and generate adequate revenues badly needed to finance implementation of policy interventions, the Government of Uganda, through the Ministry of Finance, Planning and Economic Development, designed several measures aimed at not only enhance domestic revenues but also raise the country’s GDP from $50b in 2024 to $500b by 2040.
In the next one and a half decades, sectors like agriculture, tourism, and mineral development, and science and technology have been identified as key drivers for Uganda’s tenfold economic growth strategy.
Before implementation, numerous government key stakeholders, including civil society organisations and media, have been engaged in assessing the implications of these measures both at the microeconomic and macroeconomic levels.
Once adopted and fully implemented, Uganda being among the top 10 fastest-growing economies in Africa for 2025 will join the clubs of economic heavyweights like South Africa ($410b), Egypt (406b), Ireland ($577b), Nigeria ($188b) and Bangladesh ($450b), whose GDPs near this mark (2025 IMF World Economic Outlook).
However, two interventions, one aimed at exempting Withholding Tax (WHT) on foreign public debt and another to reduce similar tax on foreign private debt by a country whose second largest budgetary allocation is claimed by debt repayment (servicing), continue to raise questions among experts and stakeholders over our national priorities and capacity to tame the runaway public debt.
For the FY2025/2026 Budget, debt servicing reportedly claimed over 57 percent of the Shs72 trillion National Budget, severely limiting the government’s ability to invest in other critical sectors like health, education, and infrastructure.
WHT exemptions and reductions present a dilemma in the sense that the government will not be able to charge a tax on the interest paid to lenders, being lured to lend more to an already strained country where every citizen is indebted to the tune of Shs2.5m.
This goes without mentioning the strike by teachers for months. This move is a no game-changer as it wouldn’t only deny the government substantial revenues in the form of taxes but also an equivalent to surrendering our sovereign rights to taxation.
We found this position not realistic as it underestimates the bigger picture regarding the impact of crowding external resources in a poor country where corruption erodes close to Shs10 trillion annually. Additionally, without stopping leakages in government ministries, departments and agencies, even the targeted 10-fold growth strategy will crumble.
The probability of investing huge sums of borrowed funds in ATMs to boost local production, jobs, savings, exports (foreign earnings), taxes, and the reduction of imported inflation will be firmly determined by our zeal to end all sorts of costly patronages exercised by the current regime.
The central government, through local affiliated organs, must walk the talk of reviving, if not establishing agro-processing industries at every sub-region level purposely to transform the rural economy whose demise is clearly reflected in the acute rural-urban migration responsible for increased slums in Kampala, general crimes, infectious disease, unemployment, huge and risky numbers of boda boda riders responsible for increased road crashes and crime, food insecurity and several others.
The central government through local affiliated organs must walk the talk of reviving if not establishing agro-processing industries at every sub region level purposely to transform rural economy whose demise is clearly reflected in the acute rural -urban migration….’