President Yoweri Museveni of Uganda has assured the nation that the country's economy remains stable, despite facing several challenges. He cited at least $6 billion in reserves held by the Bank of Uganda, which he believes is a positive indicator of the country's economic health. Speaking during the 64th Independence Day celebrations at State House Entebbe, President Museveni used humour to caution against spending the country's foreign reserves on imported luxury goods.
The President noted that Uganda's inflation rate of about 4 per cent remains manageable, but urged Ugandans to invest in value addition to locally produced goods and reduce dependence on imports. He emphasized that imports contribute to inflationary pressures and encouraged Ugandans to prioritize export promotion. President Museveni also highlighted the importance of processing raw materials before exporting them, citing gold mining in Kassanda District as an example of an industry that could benefit from local processing.
President Museveni attributed the country's current economic pressures to several factors, including conflicts in the Gulf region that have driven up oil prices, prolonged drought that has affected food production, and the Ebola outbreak, which he said had affected tourism. He also pointed to competition for investment in government Treasury bonds and bills, saying some investors had shifted to the US market in search of higher returns, contributing to reduced foreign currency inflows into Uganda.
The President further cited changes in the international coffee market, noting that Brazil had regained market share, affecting Uganda's coffee export earnings. He reiterated the need for Uganda to process its raw materials before exporting them, arguing that value addition would generate greater foreign exchange earnings and create more economic opportunities. President Museveni called for a shift towards domestic processing of raw materials to maximise the country's earnings from exports.
Vice President Jessica Alupo credited President Museveni's leadership with supporting Uganda's growth and development, noting that women continue to play a key role in the country's development agenda under the 10-fold growth strategy. She praised the President's efforts to promote economic stability and urged Ugandans to work together to achieve the country's development goals.
The Independence Day celebrations were attended by selected leaders from religious institutions, government ministries and agencies, as well as foreign dignitaries. President Museveni also used the occasion to caution against spending the country's foreign reserves on imported luxury beauty products, including perfumes and hair sourced from deceased people. He emphasized that such imports should not be prioritised at the expense of the economy.
The current economic situation in Uganda is a mixed bag, with the shilling trading at approximately 4,000 against the US dollar. However, Ugandans who export goods stand to earn more in local currency, while importers face higher costs when purchasing dollars to pay for goods from abroad. The President's assurances of economic stability come as a relief to many Ugandans, who have been affected by the country's economic challenges.
Key points
- President Museveni cites $6 billion in foreign reserves as a positive indicator of Uganda's economic health.
- The President urges Ugandans to invest in value addition to locally produced goods and reduce dependence on imports.
- President Museveni attributes the country's economic pressures to conflicts in the Gulf region, prolonged drought, and the Ebola outbreak.
