2022/2023 Financial Year Budget Speech – Verbatim

Your Excellency the President, Your Excellency the Vice President, Right Honourable Speaker of Parliament, Your Lordship the Chief Justice, Right Hon. Deputy Speaker of Parliament, Your Lordship the Deputy Chief Justice, The Vice Chairman of the NRM Party, The Right Honourable Prime Minister, The Honourable Leader of the Opposition, Honourable Ministers, Honourable Members of Parliament, Your Excellencies, the Ambassadors, and Heads of Diplomatic Missions, Distinguished Guests, Ladies, and Gentlemen.

Madam Speaker, in fulfillment of Article 155(1) of the Constitution, I have been delegated by His Excellency the President to present to parliament, the Budget for the Financial Year 2022/2023. My statement today highlights the Budget as approved by Parliament on the 20th of May 2022.2. Right Honourable Speaker, on 20th March 2022, we lost a gallant son and Speaker of this august House – the Late Right Honorable Jacob Lokori Oulanyah. I request that, once more, we observe a minute of silence in his memory.3. May his soul rest in Eternal Peace.

Rt. Hon. Speaker, the NRM Government’s overriding goal is to achieve socio-economic transformation for the benefit of all Ugandans and thus improve their lives. We must therefore quickly accelerate the economic recovery that we began in Financial Year 2021/2022, integrate more Ugandans into the money economy, and speed up growth in the country’s productive sectors.5. Madam Speaker, the theme of the Budget for Financial Year2022/2023 is, therefore “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation, and market access”. 

This theme summarizes our Budget Strategy and the priorities that I will later elaborate on. The theme is in line with that of the East African Community (EAC) which is “accelerating economic recovery and enhancing productive sectors for improved livelihood”.6. Madam Speaker, to achieve Uganda’s socio-economic transformation, the NRM Government has resolved to pursue the following goals in the forthcoming year and the medium-term: i) Kick-start the process of getting the households still engaged in subsistence into the money economy,ii) Support businesses and the overall economy to recover from the impact of the COVID-19 pandemic and restore the lost jobs and livelihoods, and iii) Protect households from the rising prices of food, fuel, and other essential commodities using prudent economic policies.

Madam Speaker, to achieve these goals, the following key strategic actions will be undertaken: i) Maintain peace, security and stability, which jointly are the foundation of all other government, business and household plans; ii) Full implementation of the Parish Development Model (PDM) to accelerate the transition of the 39 percent of households still engaged in the subsistence economy into the money economy; iii) Step up implementation of the relief and recovery funds to support the recovery of businesses and restore the lost jobs and livelihoods.

These relief funds include the Small Business Recovery Fund; the Emyooga Fund; Microfinance Credit to SACCOs; the Uganda Development Bank (UDB) and Uganda Development Corporation(UDC), debt and equity funds, respectively; iv) Implement appropriate fiscal and monetary policies to mitigate the impact of price shocks on the wellbeing of ordinary Ugandans, without causing long-term distortions in the economy; andv) Enhance investment in infrastructure to facilitate increased production, value addition, and national and regional market access and entry.

Madam Speaker, in this Budget Statement, I will do the following: i) Report on the performance of the economy and review our future economic prospects; ii) Provide progress in the implementation of the development programs that we promised the people of Uganda during the lastFinancial Year 2021/2022, and the priorities for the next financial year 2022/2023; and iii) Highlight the revenue and expenditure framework for the next financial year 2022/23, as approved by Parliament.

RECENT ECONOMIC PERFORMANCE AND OUTLOOK

Madam Speaker, I now wish to give highlight on the performance of the economy and accountability for the measure I announced in the Financial Year 2021/22 Budget. The details can be found in the background of the Budget 2022/23 which has been published. Economic Growth10. Madam Speaker, the size of our economy is projected to expand to Shs. 162.1 Trillion for the financial year ending 30th June 2022. This is equivalent to US Dollars 45.7 Billion. Economic activity has been more buoyant at the growth rate of 4.6 percent per annum this financial year up from 3.5 percent of last year. This shows that the economy is on a path to full recovery from the COVID-19 disruptions.

11. Madam Speaker, with this buoyant recovery and resilience of the economy—induced by our deliberate and prudent economic policies—Uganda’s GDP per capita has increased to US Dollars 1,046 incurrent prices, which is equivalent to Uganda Shs. 3.7 million per person per year.12. Madam Speaker, the services sector is expected to grow by 3.8 percent up from 2.8 percent growth last financial year. This is on account of continued recovery in wholesale and retail trade, education and tourism services; coupled with growth in real estate activities and ICT. 

The services sector is projected to contribute 41.5 percent to GDP. The industry sector is expected to grow by 5.4 percent up from 3.5percent growth last financial year, largely on account of the recovery in manufacturing and construction activities. The industry sector is projected to contribute 26.8 percent to our GDP. The agriculture sector is expected to grow by 4.3 percent, largely as a result of growth in food and cash crop production, livestock as well as recovery in fishing. This is the same rate at which the agriculture sector grew last year. 

The sector contributed 24.1 percent to total economic output.Prices15. Madam Speaker, in the second half of Financial Year 2021/22, however, there has been a significant increase in prices for some of the essential commodities and services. These include laundry bar soap, petrol, and diesel, cooking oil, and some food crop items such as wheat, sugar, potatoes, and onions. Education services and building materials such as cement and steel have also experienced price increases. 

As a result, the overall inflation has increased considerably from 2.7 percent in January 2022 to 6.3 percent in May 2022, causing considerable discomfort among the public.

Madam Speaker, this recent increase in the prices of essential commodities is a result of events that have occurred outside Uganda. These are:i) The effect of COVID-19 restrictions across the world, which disrupted supply chains, which has consequently caused a shortage of intermediate raw materials used to produce some essential commodities; ii)

In the recent past, the global economy has faced high shipping costs arising from limited availability of containers, and higher fuel prices; all together leading to supply shortages globally;iii) The full opening of economies globally following relative containment during the COVID-19 pandemic lockdowns has led toa rapid rise in aggregate demand for a number of fast-moving-goods beginning with oil, yet production levels have been constrained by Covid-19 restrictions; and iv) The situation has been worsened by the Russia-Ukraine conflict,which has further disrupted supply of oil, cereals such as wheat,maize, and sunflower oil, as well as essential metals like aluminum and nickel. 

The two countries are major producers and exporters of these commodities.

Madam Speaker, appropriate measures to curb the rising prices in the short, medium, and long term will be implemented. These measures include i) Supporting farmers to grow more fast-maturing food and oil seeds to ensure sufficient domestic supply; ii) Maintaining a market-based determination of prices to support a continuous supply of the goods and services. This is intended to ensure that demand does not outstrip supply; iii) Expediting improvement of alternative fuel import routes across lake Victoria to avoid possible unnecessary supply disruptions; iv) Using appropriate fiscal and monetary policies to mitigate the impact of price shocks;v) Construct additional fuel storage infrastructure in the medium term, and stock them adequately, and vi) Expediting commercial oil production and development of the oil refinery.

Madam Speaker, Government cannot influence price levels whose changes are driven by external shocks that are outside its control. We will therefore not be applying measures that can lead to long-term and painful distortions in the economy. For examples persistent shortages of goods, hoarding, and black markets. Exchange Rate Developments. Madam Speaker, over the past year, the Uganda Shilling initially strengthened against the US Dollar, appreciating by 2.3 percent between April 2021 and April 2022. This appreciation was on account of higher dollar inflows from our exports, foreign direct investment, and foreigners buying Government treasury bills and bonds.

20. However, the Shilling has experienced significant depreciation pressures since March 2022 on account of concerns arising from the Ukraine-Russia conflict and related sanctions as well as the rising interest rates in advanced economies. The Shilling depreciated by 1.7percent month-on-month on average in the three months to June 2022 and by 6.7 percent against the US Dollar between June 2021and June 2022. The Bank of Uganda is taking appropriate measures to avoid volatile fluctuations but not preventing the exchange rate movements.

Interest Rates

Madam Speaker, commercial bank lending rates for Shillingdenominated loans marginally declined to 18.8 percent in the 10-month period to April 2022, down from 19.1 percent in the same period in the previous year. Reduction in lending rates occurred in the transport and Communication, Building, Mortgages, Construction and Real Estate, and Personal and Household Loans sectors. External Sector Performance.

Madam Speaker, total export receipts of goods and services amounted to US Dollars 5.74 billion in the 12 months to April 2022, down from6.2 a billion in the previous 12 months. Merchandise exports were reduced by US Dollars 858 million in the same period. However, coffee receipts increased from US Dollars 279.5 million to US Dollars 811 million in the same period. Madam Speaker, private sector imports of goods have increased significantly to US Dollars 6.4 billion in the year to April 2022 fromUS Dollars 5.0 billion in the previous 12 months. This increase is attributed largely to investments in the oil and gas sector. 

For the same reason, foreign direct investment has rebounded strongly to USDollars 1.36 billion in the year to April 2022 from US Dollars 892million in the same period a year before. 24. Uganda’s international reserves at the end of April 2022 increased toUS$ 4.54 billion, equivalent to about 4.6 months of imports. This was an increase from US Dollars 3.57 billion as of April 2021.Fiscal Performance25. Madam Speaker, the revenue collection target in the financial year2021/22 Budget was Shs. 22.425 trillion. Total revenue collection is now projected at Shs. 21.486 trillion.

This represents a shortfall of SHS. 939 billion.26. Despite this revenue shortfall, domestic revenue collection this financial year has improved compared to last year. This has been on account of improved tax administration and increased economic activity following the full re-opening of the economy in January 2022. Madam Speaker, total Government expenditure excluding domesticdebt refinancing, external debt amortization and appropriation-in-aidis projected to amount to Shs. 35.027 trillion this ending financial year. This expenditure is equivalent to 21.6 percent of GDP. This isShs. 697 billion higher than the expenditure planned at the time ofbudgeting, mainly due to the need to finance the health requirements associated with the impact of Covid-19 pandemic, and to addressinternal and regional security threats.

Madam Speaker, the fiscal deficit this Financial Year 2021/22 isestimated at 7.3 percent of GDP which is lower than the 9 percentfiscal deficit registered in Financial Year 2020/21. Our target is toreduce the fiscal deficit to 3 percent in the medium term.COVID-19 Mitigation Measures. Madam Speaker, Government implemented several measures tomitigate the impact of the pandemic on households and businesses. 

These measures were aimed primarily at keeping Ugandans alive andalso to restore business activity. To date, the outcomes of thesemeasures are as follows: Health and Social Support Responses. Madam Speaker, Government implemented robust actions to containthe COVID-19 pandemic and its effects on households. These actionsincluded:i) Enforcement of COVID-19 SOPs and guidelines, and free massvaccination. A total of 16 million people, equivalent to 72 percentof the targeted 22 million persons have received at least one dose;ii) Provision of Shs. 53.5 Billion as cash relief grants to adverselyaffected people, including boda-boda riders, salon workers, foodvendors, private school teachers, ghetto residents, and streetvendors;iii) Strengthening health care systems, including regional andnational referral hospitals by equipping 143 Intensive Care Units(ICUs), upgrading of 255 Health Centre IIs to Health Centre IIIs,and the recruitment of 400 health workers; and10iv) Funding scientific research and development, including COVIDvaccines development and innovative therapeutics such as COVIDEX.

Madam Speaker, during the pandemic, learning continued with theprovision of home-learning materials across the country. Followingthe full reopening of schools, an additional 2,900 primary andsecondary school teachers have been recruited and deployed to helpthe learners to catch up on lost time. 

Restoring Business Activity.

Madam Speaker, to support recovery of the economy Government hasprovided credit relief to borrowers as well as funding to micro, smalland medium enterprises (MSMEs) and corporate/large businesses.The following progress has been registered:i) Bank of Uganda extended credit relief to enable borrowers unableto service their loans during the pandemic to restructure them.Loans totaling Shs 7.2 trillion, representing 40 percent of totalloans, were restructured over the period;ii) Domestic arrears to private sector suppliers of goods and servicesto Government totaling Shs. 526 billion were cleared. 

In addition,Court Awards amounting to Ushs 57 billion were settled;iii) The Microfinance Support Center (MSC) was funded to supportmicro-businesses through the Emyooga Fund (Shs. 100 billion)and support to SACCOs (Shs. 27 billion). Consequently, 6,600SACCOs and 205,000 savings groups have been established acrossthe country. These are operating a total of 4.1 million accounts. 

As a result, savings worth Shs. 63 billion as at the end of April 2022among the lowest earners of this country have been realized; 11iv) For small businesses that do not fall under Emyooga and at thesame time do not qualify for the UDB funding, the Shs. 200 billionSmall Business Recovery Fund has been established in partnershipwith Bank of Uganda supervised financial institutions to offer creditat a subsidised interest rate of 10% percent per year;v) To support the recovery of medium and large-scale businesses,Uganda Development Bank (UDB) was capitalized to the tune ofShs. 636 billion and which was fully disbursed by May 2022 at aninterest rate of 12 percent per annum. 

In addition, UDB plans todisburse a further Shs. 351 billion by December this year;vi) For private sector enterprises engaged in strategic industrialdevelopment of the country, such as agro-processing,manufacturing, and minerals beneficiation, the UgandaDevelopment Corporation (UDC) received Shs. 160.7 billion thisfinancial year to make equity joint venture investments;vii) Government has also disbursed the Shs. 20 billion to Teachers’SACCO to support them to recover from the pandemic;viii) In the Financial Year 2021/2022, the Agricultural Credit Facilitydisbursed a total of Shs. 67.42 billion to 1,057 borrowers as atJune 2022. 

Cumulatively, the fund has financed a total of 3,120farmers across the country to a tune of Shs. 737.30 billion;ix) Following amendment of the National Social Security Fund (NSSF)Act to allow mid-term access for qualifying members, a total of Shs.420 billion has so far been paid out to about 21,500 beneficiaries;andx) For women entrepreneurs, I have received a US Dollar 217 milliongrant from the World Bank to provide funding in the coming financial year to middle level businesses managed by women tosupport their growth and create jobs.

Madam Speaker, as a result of the above measures, we have begun to see positive trends in business activity. For example, during the 10months from July 2021 to April 2022, there was a 38 percent increase in taxpayers with 686,000 new taxpayers being added to the taxpayerregister.34. In addition, investors’ sentiments about doing business in Uganda have remained positive in recent months as illustrated by the following indicators between July 2021 and May 2022.i) The Business Tendency Index (BTI) which has increased by 20.8percent. The BTI measures the level of optimism that executiveshave about current and expected outlook for production, orderlevels, employment, prices and access to credit;ii) The Purchasing Managers’ Index (PMI) which has increased by 48.8percent. 

The PMI is an indicator of business activity both in themanufacturing and services sectors; andiii) The Composite Index of Economic Activity (CIEA) which has increased by 4.3 percent. The CIEA represents the monthly underlying forces in the national economy. Medium-Term Economic Outlook35. Madam Speaker, future prospects for our economy are positive, with medium-term growth projected at 6.5 percent per annum. The positive economic outlook is dependant on the following:i) The full reopening of the economy;ii) The increase in global demand for some commodities we produce and export, such as coffee, livestock, tea, and other food products;

13iii) Commercialisation of oil and gas following the announcement of the Final Investment Decision (FID) in February this year;iv) Active import substitution for goods that Uganda can produce and export competitively, such as pharmaceuticals;v) Support to private sector industries particularly in agro-industry,light manufacturing and value-addition to our minerals;vi) Improved access to affordable credit for micro, small and medium enterprises to enable their businesses revive and create jobs;vii) Fast tracking the implementation of the Parish Development Modelwhich targets increased production of strategic commodities fordomestic consumption and export; andviii) Digitisation of the economy to realise efficiency gains in business and government.

FINANCIAL YEAR 2022/23 BUDGET STRATEGY

Madam Speaker, the Budget Strategy for the Financial Year 2022/23and over the medium term seeks to restore economic activity to the pre-pandemic levels, and subsequently accelerate the pace of socio-economic transformation. The three broad objectives of the strategy are:i) Sustaining peace, security and stability as well as macro-economic

stability, as key foundations for recovery, growth and socio-economic transformation;

ii) Mitigation of the COVID-19 impact on business activity, livelihoodsand the overall economy; andiii) Speeding up socio-economic transformation by repurposing the budget towards wealth and job creation as well as other impactful investments.

14Imperatives for implementing the Financial Year 2022/2023 Budget.

Madam Speaker, in order to achieve these three key objectives, the following imperatives must be adhered to:i) National budget reform to make it more re-distributive and responsive to national priorities.ii) Enhanced fiscal discipline to limit supplementary expenditure to only the unforeseeable and unavoidable spending within the 3percent provided for under the law. iii) Enhanced domestic revenue mobilisation to increase the revenue-to-GDP ratio to our target of 18 percent over the medium term.

iv) Limit the borrowing to restore the debt-to-GDP ratio to within 50percent over the medium term as provided for in the Charter for fiscal Responsibility.v) Continued alignment of the budget to the National development plan to ensure that our development priorities are adequately funded. vi) Automate Government processes and systems to enhance efficiency, save money, and fight fraud and other forms of corruption. vii) Rationalisation and restructuring of Government to eliminate duplication, overlaps, mandate wars and resource wastage.

FINANCIAL YEAR 2022/23 BUDGET PRIORITIES

38. Madam Speaker, the key priorities for the Financial Year 2022/23Budget are the following:i) Enhancement of security, the rule of law and fighting corruption;ii) Sustaining economic recovery; 15iii) Implementation of the Parish Development Model to create wealth and jobs;iv) Promotion of agro-industrialisation, standards and market entry;v) Commercialisation of oil and gas;vi) Enhancement of transport, energy and ICT infrastructure;vii) Enhancing human capital development, science, innovation, and knowledge transfer; and viii) Enhancing public sector effectiveness and efficiency.

Enhancing Security, the Rule of Law and Anti-Corruption39. Madam Speaker, peace, security, and stability as well as rule of law are the bedrock of socio-economic transformation, and thus must remain key Government priorities. 

Peace, Security and Stability.

Madam Speaker, the recent surge in cattle theft and cross-borderconflicts in Karamoja sub-region have been and will continue to beaddressed. In a recent supplementary budget, Government providedShs. 112.5 billion to facilitate the UPDF to carryout operations andthe Ministry of Works and Transport to construct security roads inKaramoja sub-region.41. The UPDF will also continue with the pacification of the easternDemocratic Republic of Congo in line with the agreement with theGovernment of the Democratic Republic of Congo.

Madam Speaker, with respect to the capacity and wellbeing of oursecurity forces, Government will in the medium term embark onenhancement of pay for our gallant men and women in uniform.43. Madam Speaker, the construction of the Military Referral Hospital inMbuya is on schedule and within budget.

Madam Speaker, in order to enhance surveillance and improve crimedetection, the first Phase of the CCTV camera project was successfullyimplemented with the installation of over 3,000 cameras country wide.The second phase is now 95 percent complete, and targets all citiesand major highways.

Madam Speaker, Shs 3.987 Trillion has been provided forimprovement of security and security infrastructure.Rule of Law46. Madam Speaker, in order to enhance the rule of law, the priority willbe to improve the dispensation of justice for all. The Judiciary will besupported to allow for speedy dispensation of justice and address thebacklog of cases.47. In terms of systems that enhance the judicial process, the Electronic Court Case Management Information System (ECCMIS) to improvecase management is now functional in seven (7) court circuits withinthe Greater Kampala Metropolitan Area.

Additionally, the Video Conferencing System is operational in several courts across thecountry. The rollout of the Electronic Court Case ManagementInformation System and Video Conferencing Systems in an additionalten (10) courts will also commence next financial year.48. Madam Speaker, administration of Justice will be strengthened withthe recruitment of more Judicial Officers; the establishment of two (2)Regional Courts of Appeal in Gulu and Mbarara, and two (2) HighCourt circuits in Luwero and Soroti. In addition, three (3) ChiefMagistrate Courts in Alebtong, Lyantonde and Budaka; and four (4)Grade I Magistrate Courts in Karenga, Patongo, Abim, and KyazangaDistricts, will also be established.

Madam Speaker, in order to further improve the delivery of justice,the construction of the Supreme Court and the Court of Appealbuilding will be completed soon. In addition, the Chief MagistratesCourt buildings in Hoima, Luwero and Masindi districts amongothers, were rehabilitated during the ending financial year.50. Madam Speaker, over 78 percent of the population can now access afrontline service point within a five-kilometer radius. District coverageof justice front line service points has increased from 61.5 percent in2017 to 74 percent in 2021.Anti-Corruption.

Madam Speaker, we continue to make progress in the fight againstcorruption. There was increased declaration of income, assets, andliabilities by leaders from 25,000 to over 400,000 in 2021, with theincrease in the scope of public servants who are required to declareincome, assets and liabilities. This financial year, Shs. 3.0 billion hasbeen recovered from corrupt leaders and public servants anddeposited in the Consolidated Fund.

Madam Speaker, to enhance the rule of law and to step up the fightagainst corruption, I have provided Shs 381.6 billion for theJudiciary, Shs 95.0 billion for the Directorate of Public Prosecutions,Shs 876.4 Billion for the Uganda Police, and Shs 308.7 Billion forthe Uganda Prisons Service. I have also allocated Shs 79.4 billion forthe Inspectorate of Government.Implementation of the Parish Development Model. Madam Speaker, in order to integrate the 3.5 million householdscurrently working in the subsistence economy into the moneyeconomy, and to proactively create wealth and jobs, the Parish 18Development Model (PDM) is going to be fully implemented in thecoming financial year.

Madam Speaker, in financial year ending June 2022, Shs 234 billionwas provided for the implementation of the PDM. More efforts havebeen focused on preparatory activities to prepare for fullimplementation of the model. These include: recruitment of ParishChiefs by all districts; data collection, verification of beneficiaries,establishment of SACCOs; setting up of the PDM Management Unit inthe Ministry of Local Government; and sensitisation and mobilisation,among others.

Madam Speaker, next financial year, I have provided a total of Shs.1.059 trillion for full implementation of the Model. Each of the10,594 Parishes in the country will receive Shs. 100 million as arevolving fund, earmarked for purchase of agricultural inputs byhouseholds still in subsistence.56. Madam Speaker, the Parish Development Model will be complementedby other Government programmes such as the Emyooga Fund; theMicrofinance Support Centre credit to other SACCOs and VillageSavings Groups; the Small Business Recovery Fund; and other wealthcreation initiatives.Agriculture Production.

Madam Speaker, agriculture production will be enhanced using thefirst pillar of the Parish Development Model – that addressesproduction, agro-processing, and marketing, through enhancedaccess and entry to national, regional and global markets. This valuechain approach allows development of sustainable linkages. The keyinterventions will include: 19i) Development of key commodities value chains that have a highimpact on transforming the 39 percent of households insubsistence into the money economy. These include coffee, beefand dairy cattle, poultry, fish, piggery, fruits, and food crops forintensive farming. The rest of the enterprises including cassava,bananas, rice, Irish potatoes, millet, cotton, tea, cashew-nuts,among others, will also be supported but for relatively big farmers;ii) Expansion of irrigation schemes and providing community andindividual on-farm water for production to minimise reliance onrain-fed agriculture; and ensuring sustained agriculturalproduction;iii) Enhancement of research, breeding and appropriate technologydevelopment through the National Animal Genetic ResourcesCentre and Data Bank (NAGRC & DB) and the National AgricultureResearch Organisation (NARO);iv) Investment in, and effective regulation of production, multiplicationand certification of quality agricultural inputs including seeds,seedlings, stocking materials, and fertilizers;v) Enhancement of enterprise selection through enhanced farmereducation and general agricultural extension, as well as pest anddisease control at Parish level;vi) Promotion of appropriate land use, mechanisation, cooperatives,and development of partnerships with large-scale farmers toproduce for export and industrial value addition; andvii) Supporting fishing communities by developing hatcheries, fishponds, and equipping them with engines, nets etc.2058. 

Madam Speaker, I have allocated Shs. 564.39 billion to increase production and productivity through the Ministry of Agriculture. Animal Industry and Fisheries.Climate Change and Environmental Degradation. Madam Speaker, climate change is a significant risk for agricultureproduction, and food security. In order to mitigate environmentaldegradation, we have set a target to increase the national forest coverfrom the current 12.4 percent to 15 percent. Central Forest Reserveswill be protected from encroachment by re-surveying and marking of6200 square kilometers of boundary.60. Madam Speaker, 850 square kilometers of wetlands and forests willalso be restored by i) having them demarcated and gazetting, and ii)evicting all encroachers.

Madam Speaker, I have allocated Shs. 628 billion in the nextFinancial Year 2022/23 for actions to mitigate and adapt to climatechange.Promoting Agro-Industrialisation, Standards and Market Entry62. Madam Speaker, promoting agro-industrialisation, enforcing productstandards and enabling market access and entry are key aspects tocreating wealth and jobs. Next financial year, the followinginterventions will be prioritised:i) Expanding storage and processing capacity for agriculturalcommodities within the 18 zones of the country;ii) Enhancing the use of the Warehouse Receipt System to improvecommodity storage, reduce post-harvest losses, improve valuechain management, and increase income to farmers;

21iii) Providing funds for private sector investment in key commodityagro-processing value chains through soft and patient debt fromUDB, and equity from UDC;iv) Strengthening of standards for quality assurance to improve accessto markets;v) Establishing a system for issuance and management ofinternationally recognised product bar codes, branding, packagingand labelling of Uganda’s products for visibility;vi) Enhancing implementation of the Export Development Strategyincluding carrying out negotiations for access and entry to regionaland international markets;vii) Establishing fully serviced industrial parks;viii) Promoting investment in strategic industries such as manufactureof pharmaceuticals, industrial sugar, starch, herbal extracts andcotton-based medical sundries;ix) Finalise the enactment of pending legal instruments, for example,

the Competition Bill and the Consumer Protection Bill, Anti-Counterfeits and Quality Product laws;

x) Developing a master plan for the Zombo Tea Factory andestablishing enabling infrastructure including water andelectricity;xi) Expanding the Soroti Fruit Factory by installing additionalprocessing equipment; andxii) Supporting establishment of 200 Aggregation and CollectiveMarketing Societies with cleaning, drying, grading, and processing equipment. 63. I have allocated Shs 1.449 Trillion to promote agro-industrialisation,standards and market entry. 22Supporting Economic Recovery and Commercializing Oil and Gas64. Madam Speaker, as I reported earlier, we have taken major steps torevive business activity, which we shall continue to do in the mediumterm in the following sectors:-Tourism.

Madam Speaker, tourism was severely affected by the Covid-19pandemic. The good news is that the sector is recovering fast.Government shall support the sector to return to its pre-pandemiclevels and beyond by prioritising the following interventions:i) Facilitation of the Uganda Tourism Board to rebrand and promoteUganda under the new ‘Explore Uganda’ brand;ii) Sustaining and upscaling investment in tourism infrastructure –like roads, electricity, internet, security, etc.;iii) Easing access to recovery financing at the Uganda DevelopmentBank; andiv) Intensifying promotion of domestic tourism.

Madam Speaker, I have provided tourism activities with Shs. 194.7billion to complement private sector investment and support itsrecovery.Commercialisation of Oil and Gas67. Madam Speaker, the construction of the East African Crude OilPipeline (EACOP) is expected to commence in the coming financialyear. The capacity of the Uganda National Oil Capacity to invest in oiland gas development has also been enhanced. While there have beennegative campaigns against the development of the Crude Oil Pipeline,the Government will develop Uganda’s oil and gas resources in aresponsible and sustainable manner for the benefit of all Ugandans.

Madam Speaker, I have allocated Shs. 904.1 billion towards thedevelopment and commercialisation of minerals, oil and gas.Enhancing Human Capital Development.69. Madam Speaker, having successfully contained the COVID-19pandemic over the last two years, our efforts are going to be focusedon improving the quality of life of the people of Uganda by prioritisingthe following:Health70. 

Madam Speaker, the emphasis now is on mass vaccination of alleligible persons and community disease surveillance by strengtheningVillage Health Teams (VHTs) with training and equipping them with asmartphone and bicycle. Additional Health assistants andsurveillance officers will be recruited to support the VHTs.71. Madam Speaker, the development of health infrastructure nationwidewill continue. The rehabilitation and expansion of the followingGeneral Hospitals will be undertaken – Itojo, Kaabong, Abim,Kambuga, Masindi, Kanungu, Kapchorwa, Bugiri and Amudat. Inaddition, forty-three (43) Health Centre IIs will be upgraded to HealthCentre IIIs and seventeen (17) new Health Centre IIIs will be built inthe sub-counties without health facilities. Seventy-five (75) StaffHouses will be built in the Karamoja region.

Madam Speaker, next financial year, the Ministry of Health will startimplementing the Uganda COVID-19 Emergency Response andPreparedness Project supported by a grant from the World Bankamounting to US Dollars 180.3 million (equivalent to Ushs. 667.1billion). This grant will finance the rapid detection, prevention andquick responses to threats posed by the COVID-19 Pandemic. It will 24also finance the strengthening of national systems for public health preparedness.

73. Madam Speaker, the construction and equipping of a modern heartfacility will commence in the coming financial year, to be located inNaguru. This US Dollar 70 million facility will be funded by the ArabBank for Economic Development in Africa (BADEA); the Saudi Fundfor Development (SFD); and the OPEC Fund for InternationalDevelopment (OPEC Fund).74. Madam Speaker, I have allocated a total of Shs 3.722 trillion forhealthcare delivery in Financial Year 2022/20223.Water75. Madam Speaker, national safe water coverage now stands at 69.8percent, with coverage in rural areas at 68 percent and 71.6 percentin urban areas. Our target is to increase safe water coverage to 81percent over the medium term.

76. Madam Speaker, during financial year 2021/22, the following majorwater projects were implemented:i) Five medium-scale irrigation schemes in Ngenge (Kween),Rwengaaju (Kabarole), Tochi (Oyam), Mubuku II (Kasese), andDoho II (Butaleja);ii) One Hundred and Six (106) small scale irrigation schemes in theDistricts of Bugiri, Bukedea, Tororo, Iganga, Mbale, Kapchorwa,Pakwach, and many others;iii) Substantial completion of Katosi Water Treatment Plant, which willproduce 160 million litres of water per day;iv) Upgrading of Kapeeka Water Supply System to 5 million liters perday, double the current capacity; and25v) Rehabilitation and expansion of the Sembabule Water SupplyProject. The Plant is now able to produce 30 million litres per day..

Madam Speaker, the following water projects which are ongoing willcontinue to be implemented:i) Constructing 80kilometres water supply infrastructure from RiverNile to serve 484,000 people in Acholi and Lango sub-regions;ii) Constructing Water Infrastructure from River Kagera to serve an additional 75,000 people in Isingiro, Mbarara, and Masaka sub-regions; iii) The Wakiso West Water and Sanitation Project;iv) The rehabilitation and expansion of Mbale Water Supply Scheme;andv) Construction of the Wastewater Treatment Plant targeting KirudduHospital. 

Madam Speaker, I have allocated Shs 1.027 trillion towards thewater and environment sub-programme.Education79. Madam Speaker, education is a key opportunity equaliser for humanbeings. During the Covid-19 induced lockdown period, many teachersabandoned the profession, and classrooms got dilapidated in severalinstitutions. But now efforts have started to revamp the educationsector. Priority will be put on improving the quality of education toenhance learning outcomes. The following will be undertaken:i) Staffing gaps will be filled in primary and secondary schools;ii) Training of teachers and instructors on the new abridgedcurriculum will continue, and the lower secondary curriculum willbe rolled out; 26 iii) Continuous assessment will be fully rolled out;iv) Inspections across all learning institutions will be strengthenedusing the Teacher Education and Learning Assessment (TELA)system;v) Operationalisation of the Moroto Constituent College of Agriculture,Mountains of the Moon, and Busoga Universities will take effect.Consultations to operationalise Bunyoro University will commencenext financial year 2023/24;vi) Construction and equipping of two-Unit Laboratories in 21secondary schools currently without any, in line with the ScienceTechnology Engineering and Math (STEM) Policy; andvii) The construction, upgrading and equipping of VocationalEducation Centres of Excellence in Bushenyi, Lira, and Elgontechnical institutions will be completed.

Madam Speaker, I have allocated Shs 4.14 trillion towards theeducation and skilling sub-programmes.Science and Innovation81. Madam Speaker, we are developing three prospective COVID-19vaccines which are undergoing animal trials. Human trial will

commence next financial year. In addition, clinical trials for COVID-19 treatment for viral respiratory diseases are on-going. Next financial year, research into medicine development will be expanded to cancer,diabetes, sickle cell anemia, and malaria.

82. Madam Speaker, in September this year Uganda will launch into theLower Earth Orbit its first ever satellite from the International SpaceStation in collaboration with the US National Aeronautic and SpaceAdministration (NASA). A ground station at Mpoma, Mukono willreceive data from the satellite. The data from this satellite will be used

27for meteorology, environmental monitoring, urban planning, mineralexploration, and disaster management, among others.83. Madam Speaker, I have allocated Shs. 274.4 billion towardsadvancing innovation and technological development in this country.Enhancing the Transport and Power Infrastructure

84. Madam Speaker, the following achievements have been recorded intransport infrastructure development:i) The construction and up-grading of 20 national roads covering atotal distance of 1,437 kilometers have been done; ii) The rehabilitation has commenced of the 160 kilometres of Tororo-Gulu Meter Gauge Railway and the 265 kilometres of Tororo-Namanve Railway line section. The procurement of locomotives ison-going;iii) Continuation with the compensation and acquisition of right of wayfor the Kampala – Malaba Standard Gauge Railway line;iv) The rehabilitation of the Entebbe International Airport stands at75 percent completion and the Kabaale International Airport at 72percent; andv) Maintenance of 5,200 kilometres of paved and 15,350 kilometres ofunpaved national and city roads, and 21,831kilometres of unpavedLocal Government and Community roads has been undertaken.85. 

Madam Speaker, next Financial Year 2022/2023, the followinginterventions in transport infrastructure will be implemented:-i) Construction of 400 kilometres equivalent of roads to bitumenstandards; rehabilitation/reconstruction of 200 kilometresequivalent, and construction of 30 bridges on the National roadsnetwork; 28ii) Rehabilitation of 928 kilometres of District roads and 126kilometres of Local Government roads;iii) We shall continue with the development of the Bukasa Inland Port;andiv) We shall commence Uganda Airlines’ flights to London and China.

86. Madam Speaker, I have allocated Shs. 4.3 trillion next financial yearfor transport infrastructure development and maintenance.Power Infrastructure87. Madam Speaker, national electricity access today stands at 57percent, of which, 19 percent is on the main national grid and 38percent is off-grid, including solar power. Uganda’s total electricitygeneration capacity has increased from 1,268 megawatts in FinancialYear 2019/2020 to 1,347 megawatts in Financial Year 2021/2022, onaccount of the completion of the 42 megawatts Achwa I, the 21megawatts Nyamagasani, and the 15.5 megawatts Sugar Corporationof Uganda Limited (SCOUL) plants.

88. The transmission network increased from 3,100 kilometres inFinancial Year 2020/2021 to 3,431 kilometres as at the end of thethird quarter Financial Year 2021/22 as a result of the commissioningof the Karuma-Kawanda 400 kV and Karuma-Olwiyo 132 kVTransmission Lines. The Luzira Sub-station was completed and willbe commissioned after completion of the 15 kilometres 132kVtransmission line.

Madam Speaker in the next financial year, the following interventionsin power infrastructure will continue to be implemented:i) Commence the unit-by-unit commissioning of the 600 megawattsKaruma Hydro Plant in September 2022, with the plant being fullyavailable in June 2023; 29 ii) Complete the Opuyo-Moroto, Lira-Gulu-Nebbi-Arua, Lira-Gulu-Agago and the Mutundwe – Entebbe 132kV transmission lines; and

iii) Commence feasibility and design studies for the 400kv Uganda -South Sudan transmission line between Olwiyo – Nimule -Juba; the400kV Uganda – Democratic Republic of the Congo interconnectionand the 400KV Uganda – Tanzania transmission line.

Madam Speaker, I have provided Shs 1.573 trillion to ensure theabove are undertaken.Information Communication Technology Infrastructure91. Madam Speaker, the geographical coverage of Broad Band services(3G) stands at 66 percent, allowing digital access for 74 percent of thepopulation. Next financial year, the Government will support theFourth Industrial Revolution Technologies. These include ArtificialIntelligence, Internet of Things (IoT) and the use of Robotics. We shallalso extend broadband ICT infrastructure to enable connectivity tofacilitate public service delivery.

92. Madam Speaker, I have allocated Shs. 124.2 billion towardsDigitalisation.Enhancing Public Sector Effectiveness and Efficiency93. Madam Speaker, Public Sector effectiveness and efficiency will beimproved through the following measures:i) Continued rationalisation of Government and Public Expenditure;ii) Automation of Government business and service delivery. Thisincludes e-Procurement, the Parish Model ManagementInformation System, Government Asset Management, EducationInformation Management, Electronic Document Management, 30Integrated Health Management Information System, e-PaymentGateway, and the e-Post Digital Platform;iii) We shall also embark on decongesting the Citizenship andImmigration Office in Kampala by establishing centers in theKampala Capital City Divisions, commencing with NakawaDivision;iv) The salaries of medical workers, scientists, and science teachershave been enhanced by Shs. 495 billion. In addition toincentivizing scientists, this will also help to improve functionalityof education and health facilities by addressing absenteeism andlow morale of personnel; andv)

Madam Speaker, to enhance the Decentralisation Policy, a total ofShs. 5.1 Trillion has been provided as direct financing to LocalGovernments. 

FISCAL FRAMEWORK AND THE FINANCING STRATEGY FOR FINANCIAL

YEAR 2022/2023

94. Madam Speaker, the Financial Year 2022/23 budget priorities I havejust elaborated will be financed from the following sources:i) Enhanced domestic revenue mobilization;ii) External financing in the form of loans and grants from ourDevelopment Partners and private creditors; andiii) Public-Private Partnerships that mobilise private sector financingfor public projects. 31 The Resource Envelope for Financial Year 2022/2395.

Madam Speaker, the Resource Envelope for Financial Year 2022/23amounts to Shs. 48,130.7 billion and is comprised of both domesticand external resources as detailed below: -i) Domestic Revenue amounts to Shs. 30,797.3 billion of which Shs.23,754.9 billion will be tax revenue and Shs. 1,795.9 billion willbe Non-Tax Revenue.ii) Domestic borrowing amounts to Shs. 5,007.9 billion.iii) Budget Support accounts for Shs. 2,609.2 billion.iv) External financing for projects amounts to Shs. 6,716 billion ofwhich Shs. 4,625.7 billion is from loans, and Shs. 2,090.5 billionis from grants.v) Appropriation in Aid, collected by Local Governments amounts toShs. 238.5 billion; andvi) Domestic Debt Refinancing will amount to Shs 8,008.0 billion.96. Madam Speaker, total expenditure will be Shs.48,130.7 billion.Excluding domestic debt refinancing and Appropriations in Aid (AIA),it amounts to Shs. 39,884.2 billion of which Wages and Salaries is Shs. 6,366.9 billion, Interest Payments is Shs. 4,691.9 billion, Non-wage Recurrent Expenditure is Shs. 14,259.4 billion andDevelopment Expenditure is Shs. 14,565.9 billion.Tax Measures for Financial Year 2022/2397. Madam Speaker, no new taxes will be introduced in Financial Year2022/23. We will achieve revenue targets by improving the efficiencyin tax collection and enhancing compliance to tax laws. The capacityof the Uganda Revenue Authority will be enhanced by recruiting andtraining staff, deploying appropriate equipment and ICT to enforce taxlaws.

3298.

Madam Speaker, I wish to report that Parliament has madeamendments to the various tax laws intended to simplify the laws,clarify previously ambiguous provisions and close loopholes that maylead to revenue leakage.99. Madam Speaker, the amendments that have been made are in theIncome Tax Act, Value Added Tax, the Stamp Duty Act and the TaxProcedures Act. I will now highlight the major amendments.Income Tax100. Madam Speaker, the corporate income tax exemption for BujagaliHydro Power Project has been extended for one (1) year up to 30thJune 2023 in order not to increase electricity tariffs for power that theProject generates.

Madam Speaker, the income tax Act has been amended to streamlinethe rental income tax regime for individuals and non-individuals asfollows: -i) Introduce a zero rental income tax rate for individuals that earnannual rental income not exceeding Shs. 2,820,000 and a rate of12 percent of rental income exceeding that amount; andii) For rental business, introduce a 30 percent rental income tax rateon rental income with expenses capped to 50 percent for each yearof income. In addition, any excess expenses shall not be carriedforward to a subsequent year of income.Value Added Tax102. Madam Speaker, under the Value Added Tax Act, the followingamendments have been made:-i) Exempted the supply of oxygen cylinders or oxygen for medical useto reduce the cost of the supply of oxygen for medical use;

33ii) Exempted the supply of assistive devices for persons withdisabilities to reduce the cost of the equipment used by persons with disabilities;iii) Exempted the supply of airport user services charged by the CivilAviation Authority to reduce the cost of transiting through EntebbeAirport;iv) To allow for Cash Basis Accounting for suppliers who supply goodsand services to Government to facilitate them to hedge against therisk of interest and penalties arising from delayed payments byGovernment; andv) Repealed the exemption on VAT on imported services used in theprovision of an exempt supply to encourage business to use localsuppliers of services such as Information and CommunicationsTechnological services.Tax Procedures Code.

Madam Speaker, the amendments under the Tax Procedures CodeAct, include the following: -i) Introduced penalties for failure to provide information for purposesof Automatic Exchange of Information to improve compliance; andii) Introduced penalties for failure to adhere to Electronic FiscalReceipting and Invoicing Solution and Digital Tax Stamps. This isintended to combat tax evasion, smuggling, and other vices.Stamp Duty104. Madam Speaker, under the Stamp Duty, the following amendmentshave been made: -i) Provide for NIL stamp duty on the following instruments;

34a. Agreements relating to the deposit of title deeds or personalproperty or goods to another as a pledge or as security for a sumof money borrowed.b. Agricultural Insurance Policy, to encourage the uptake ofagricultural insurance services; andc. Security Bond or Mortgage Deed executed by way of security forthe due execution of an office, or to account for money or otherproperty received by virtue of security bond or mortgage deedexecuted by surety to secure a loan or credit facility.ii) Clarification of the rate of Shs. 15,000 applicable on thetransmission of property from the Administrator of an Estate tothe Beneficiary.

Excise Duty105. Madam Speaker, under the Excise Duty Act, the Government hasundertaken the following amendments: -i) Clarification of definitions of various products that attract exciseduty such as spirits and juices to enhance taxpayer compliance;andii) Reduced excise duty applicable on opaque beer and fermentedbeverages made from locally sourced raw materials to 12 percentor Shs.150 per litre, whichever is higher. This is intended topromote value addition and the use of locally sourced raw materials. 35 The Medium-Term Financing Strategy106. Madam Speaker, the financing of the budget will be generated fromthe implementation of the following revenue and public debtmeasures.Domestic Revenue Mobilisation Strategy

107. Madam Speaker, the objective of the Government in the FinancialYear 2022/23 is to increase revenue by 0.8 percent of GDP. Themajor assumptions that underpin this goal are: (i) expected increasein taxable economic activities, (ii) gains from revenue enhancementmeasures, and (iii) increased employment, and aggregate demand forgoods and services arising from the full reopening of the economy.Public Investment Financing Strategy

108. Madam Speaker, the Government will implement the PublicInvestment Financing Strategy starting next financial year, toachieve the following objectives.i) Improve alignment of suitable financing options to GovernmentProgrammes and projects;ii) Minimise the cost and risk exposure of financing modalities;iii) Ensure prudent loans acquisition to avoid debt accumulation in ashort period, and timely disbursement of loan funds;iv) Long term fiscal sustainability;v) Increase financing from traditional and other innovative sourcesto meet the development financial requirements; andvi) Provide a framework for partnership with the private sector in theimplementation and financing of public investment programmes.

Public Debt Management.

Madam Speaker, as at the end of December 2021, Uganda’s totalpublic debt stock stood at Shs. 73.5 trillion (equivalent to USD 20.7Billion), of which External Debt amounted to Shs. 45.72 trillion(equivalent to US Dollars 12.9 billion) and Domestic Debt amounted to Shs. 27.77 trillion (equivalent to US Dollars 7.84 billion). 

This represents nominal Debt to GDP ratio of 49.7 percent.110. The rise in the debt stock was mainly on account of the need tosupport the economy and preserve the welfare of households a resultof COVID 19, and other external and domestic shocks. Debt was alsoused to finance the shortfalls in domestic revenue.

Madam Speaker, the Government is implementing the followingmeasures to ensure long term public debt sustainability:-i) Reduce the level of domestic borrowing over the medium term toan average of 2.2 percent of GDP per year. This ratio will bereduced further to a policy target of 1.0 percent of GDP over thelong term;ii) Implement the Public Investment Financing Strategy. 

This strategy will ensure alignment of suitable financing modalitieswith the nature of Government programmes and projects;iii) Implement the Financial Year 2022/23 borrowing strategy whichis consistent with our Medium-Term Debt Management Strategy,to avoid risks associated with unsustainable debt;iv) Borrow largely on favourable terms and for projects that enhancethe productivity of the economy;v) Sequencing new projects in a manner that makes the Governmentservice its debt obligations without the risk of default. This means 37the Government will only mobilise debt financing for readyprojects and will cancel projects with poor performance; andvi) Increase domestic revenue by implementing the DomesticRevenue Mobilisation Strategy.

CONCLUSION

Madam Speaker, the budget for the next financial year presents a setof strategic choices and the government’s commitment to stimulateeconomic recovery, enhance productivity and competitiveness ofenterprises, and most importantly wealth creation and jobs for theordinary Ugandans.113. Substantial resources have been earmarked for the implementationof the Parish Development Model. This model will be the vehicle for socioeconomic transformation at the parish level, and the monetization of the Ugandan economy. 

Successful implementation of the Parish Development Model ushers in a mass socio-economic transformation movement in our society with better-sustained outcomes. I, therefore, urge all leaders and Ugandans to ensure that these resources are effectively used to bring about the desired change. 114. To the Ugandan Scientists and Health Workers, Government hasfulfilled its commitment to enhancing your pay. Ugandans expect better services in return.

115. To the Micro, Small, and Medium Enterprises (MSMEs), I imploreyou to take advantage of the Economic Recovery programs, andthe opportunities that come with petroleum and other publicinfrastructure investments, to re-strategize, recover your businesses, 38expand, and formalize. This way, you will be able to benefit morefrom the now bigger EAC market and create decent and better-payingjobs for our young people.

116. For the women entrepreneurs, the Grant from the World Bank willsupport the growth of your enterprises, create better-paying jobs andenable you to exploit the opportunities in the economy to enhanceyour incomes.117. Madam Speaker, in order to improve service delivery, my Ministrytogether with our budget transparency partners has introduced service excellence awards for the best performing Ministries, Departments, and Agencies (MDAs) and Local Governments, as part of the Budget month. 

At an appropriate time in the near future, H.Ethe President will present awards of recognition to the best performing MDAs for financial year 2021/22.118. Madam Speaker, I dedicate this Budget to delivering the Ugandanhouseholds still in the subsistence to the money economy.119. I thank you all for listening.

For God and My Country.