East Africa

Uganda increases defence budget on DRC war

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By NELSON NATURINDA


In the budget speech read to Uganda’s Parliament seated at Kololo Ceremonial Grounds on Tuesday, June 14, Finance minister Matia Kasaija announced an allocation of Ush3.9 trillion ($1.02 billion) to security, saying boosting the defence budget would be “the bedrock of socio-economic transformation in the next financial year.”

“Peace, security and stability, as well as rule of law, must remain key government priorities,” Mr Kasaija said.

Although there has not been any severe war within Uganda apart from pockets of insecurity caused by cattle rustlers in the Karamoja region, Uganda has been allocating a sizeable amount of money every year to the sector.

This time, Mr Kasaija said the money allocated was to strengthen the operations in the eastern Democratic Republic of Congo. However, he did not specify how much was going into the mission.

“The UPDF (Uganda People’s Defence Force) will also continue with the pacification of the eastern DR Congo in line with the agreement with the Government of DR Congo,” he said.

“Sustaining peace, security and stability, as well as macro-economic stability, are key foundations for economic recovery, growth and socio-economic transformation,” Mr Kasaija said.

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Uganda army launched operations against the Allied Democratic Forces rebels, blamed for terrorist activities in Uganda and mass murders in DRC for over two decades, in eastern DR Congo in November 2021. In collaboration with the Congolese army, the UPDF has announced major war successes and requested an expansion of the force for an operation which the army spokesperson says will last as long as the threat is still there.

Read: Uganda, DRC army review joint operation against ADF

Also read: Ugandan army in DRC to shield oil: report

Commodity prices

The Finance minister said the government intends to cushion vulnerable Ugandans against the skyrocketing commodity prices in the country by supporting farmers to grow more fast-maturing food and oil seeds for domestic supply, non-interference in the market over prices, support alternative fuel supplies, especially on Lake Victoria to avoid supply disruptions, as well as using fiscal policies to mitigate the impact of the rising commodity prices.

He announced the construction of additional fuel storage infrastructure and the expedition of the process in the oil production. Uganda has one fuel reservoir in Jinja, 80km east of the capital Kampala, with a capacity of 30 million litres for a country that consumes about six million litres daily.

“Government cannot influence price levels whose changes are driven by external shocks outside its control. We will, therefore, not be applying measures which can lead to long-term and painful distortions in the economy,” the minister said.

Read: Museveni’s address: No govt intervention amid high cost of living

Economic growth

The economy is struggling with a public debt burden of over Ush73.5 trillion ($19 billion), inflation of more than six percent, increasing prices of fuel and essential commodities such as food, cooking oil, soap, sugar, bread and a projected revenue shortfall of Ush939 billion ($250 million) in the financial year ending June 30, 2022. Mr Kasaija, however, hopes to turn the economy around.

He said commercial agriculture, industrialisation, expanding and broadening services, digital transformation and market access, implementation of the Parish Development Model, and promotion of agro-industrialisation will be the magic to transform the economy to have each of the 44 million people earn an income of at least Ush3.7 million ($1,000).

Also read: Uganda hits middle income status – Museveni

Museveni’s take

Speaking after the budget presentation, President Yoweri Museveni said there was no need to worry about the economic trends, saying it would be worrying if the country lacked food.

“As long as Uganda is producing food, there is no problem we cannot solve,” he said before adding that issues of erratic rains and prolonged droughts will be solved by irrigation.

He said the problem of high fuel prices would be solved once the country gets an efficient transport system for fuel, such as railway and water transport, adding that after the final investment decision agreement signed months back, the country will soon produce its own fuel.

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