Finance Minister Amos Lugoloob speaks about Uganda’s economic outlook

Fitch Solutions recently revised up its estimates for Uganda's real GDP growth to 4.9% in 2022, up from the previous projection of 4.2%, following a stronger-than-expected economic activity in the third quarter of 2022. In an exclusive interview with CNBC Africa, State Finance Minister at the Ministry of Finance, Planning, and Economic Development, Amos Lugoloobi, discussed Uganda's economic outlook and the strategies being implemented to drive recovery and sustainable growth. Lugoloobi highlighted several key indicators that signal positive momentum for the country's economy. He mentioned that the tourism sector is thriving, with numbers returning to pre-COVID levels and the country being hailed as an attractive destination by global media outlets, including CNN. The recent favourable weather conditions have also boosted food production, helping to contain food-related inflation. Additionally, Lugoloobi addressed the challenge posed by imported inflation, particularly in light of global oil price fluctuations. Uganda, having made significant investments in the oil industry, is both impacted by and benefiting from the oil market dynamics. The country's projections for oil prices align with its strategic interests, ensuring stability in its economic growth. The finance minister emphasized the importance of ongoing investments in the oil sector, which have led to positive outcomes in terms of macroeconomic indicators and foreign exchange rate stability. Notably, the recent appreciation of the Ugandan shilling reflects improved economic conditions and investor confidence. Lugoloobi also discussed the government's initiatives to drive economic recovery through targeted interventions. One of the key programs highlighted was the Parish Development Model, aimed at enhancing productivity in the agriculture sector and transforming subsistence farmers into active contributors to the economy. The model encompasses various initiatives, including mechanization, irrigation, and value chain development, with the goal of boosting agricultural output and positioning Uganda as a net exporter of food in the region. In addition to agriculture, the government is focusing on promoting tourism and leveraging remittances from Ugandan workers abroad to stabilize foreign exchange reserves. Lugoloobi stressed the importance of human capital development, particularly in retaining and attracting skilled professionals, such as scientists, to drive innovation and research in key sectors like agriculture and industry. Private sector growth is also a priority, with investments in development banks aimed at providing affordable capital to local businesses, fostering import substitution, and attracting industrial investments. Addressing infrastructure development, Lugoloobi provided insights into the progress of the Standard Gauge Railway (SGR) project. He explained that due to delays in the Kenyan section of the SGR, Uganda has decided to partner with a tax company to advance the construction of its railway network and enhance connectivity. Despite challenges related to tax exemptions and revenue collection, the government remains focused on sustainable fiscal policies and prudent borrowing practices. Lugoloobi highlighted a shift towards concessional borrowing and collaboration with institutions like the International Monetary Fund to maintain debt sustainability and support ongoing development initiatives. The finance minister reassured that Uganda's borrowing strategy is aimed at remaining within the established debt-to-GDP ratio and ensuring long-term economic stability. With a comprehensive approach to economic recovery and growth, Uganda is poised to capitalize on emerging opportunities and navigate global economic uncertainties with resilience.