The Managing Director Absa Bank Uganda, Mumba Kalifungwa has said that the focusing on skills development in agriculture, minerals, manufacturing and Information and Communication Technology (ICT) in the 2021/2021 budget indicates government’s commitment towards economic recovery in the new Covid-19 era.
Yesterday, the Minister of State for Finance Planning and Economic and Development Amos Lugolobi presented Shs44.7 trillion budget for the 2021/2022 financial year. The Budget saw Shs 714 billion decrease for the first time compared to the approved resource envelope of 2020/2021. The drop this financial year is largely attributed to the projected decrease of Shs2.4 billion in external financing for project support.
“There are several programs channeled towards the agricultural sector. I think that’s a commendable development. There are measures in the budget focused on refinancing Uganda Development Bank (UDB). This provides a basis for stimulating growth in the manufacturing sector. Such innovations are very important.” he said during Post-National Budget Forum organised by Absa Bank.
According to the budget, Shs 358.5 billion was been allocated in next year’s budget for innovation and technological development, Shs 1.67 trillion to agro- industrialization initiatives and Shs 49 billion to support the mineral development interventions.
He said that the East African Community is critical to the development and sustaining of our economy. These are partners that present great opportunities, especially with Kenya and Tanzania. This block is critical to the sustenance of our economy. It contributes to 25% of our imports and exports trade activities.
He said at the peak of the pandemic, the bank saw non-performing assets increase to 6.3% yet a year before, they stood at 3.5%. “There was stress experienced by various borrowers. There is no doubt about the level of distractions created by the Covid-19 pandemic at the local and global levels. We only saw recovery when the lockdown measures were eased in the second half of 2020.”
John Musinguzi Rujoki, the Uganda Revenue Authority (URA) Commissioner General said Covid-19 has impacted the economy and top taxpayers. This financial year, URA is mandated to collect Shs 22trillions.
“The trade sector is our biggest tax contributor followed by the manufacturing sector. There was a general decline in the percentage contribution from both sectors last year.” he said
“Government has come up with Electronic Fiscal Receipting and Invoicing Solution (EFRIS) and Digital Tax Stamps, a system that helps with assessment because whatever is done is transparently shared with us. The system is also aimed at enhancing taxpayer compliance.” he said adding that there is more wisdom in every entity doing their part to pay tax other than dodging taxes.
He said Taxes are not meant to harm businesses, rather to get a share that belongs to the government so that a favorable businesses environment is created.
Mr. Kenneth Mugambe the director budget finance at the ministry of finance said the budget will focus on three of the seven pillars of the parish development model that is to say financial inclusion, streamlining the administration structure at the parish level and data collection.
He said government aims at providing social infrastructure as a manufacturing base, Capitalizing of UDB, continuously supporting innovators and access to markets.
Damali Ssali, Acting Country Director, TradeMark East Africa was happy to hear that the government is focusing on agro-industrialization in the coming budget. “I was happy to hear about the capitalization of UDB, this is key because several SMEs have been affected by the Covid-19 pandemic and would need that finance from UDB.”