Accountants must be accountable – Ggoobi

The World Bank report notes that signs of recovery have strengthened, underpinned by improved business and trading conditions as Covid-19 restrictions ease.

Mr Ramathan Ggoobi, the Permanent Secretary to the Treasury (PSST) in Ministry of Finance, Planning and Economic Development says the economy is on a recovery path.

Despite the second wave of the Coronavirus, the economy is projected to grow within the range of 3.5 per cent to 4 per cent in the FY 2021/2022.

The 17th Uganda Economic Update (UEU) indicates that the country’s Gross Domestic Product contracted by 1.1 per cent in 2020, and is estimated to have recovered to 3.3 per cent during the 2021 fiscal year.

Speaking during the Certified Public Accountants 9th Economic Forum meeting held virtually under the theme:  ‘Stimulating Economic Growth for Development’, he revealed that there is need to focus on achieving the National Development Plan (NDP)III, public sector efficiency and enhancement of fiscal governance to achieve value for money.

“Before the Covid-19 pandemic, the economy had gained momentum. For instance, economic growth was 6.3 per cent and 6.4 per cent in FY 2017/18 and FY2018/19 respectively. This was significantly higher than the average growth of 4.4 per cent in the previous five years,” he notes.

In addition, the economy was projected to grow by 6.5 per cent on average in the medium term. There was a stable macroeconomic environment – low inflation, stable exchange rate and fiscal and debt sustainability.

He adds that other socio economic indicators were also improving. For instance, poverty had declined to 21.4 per cent in 2016/17 from 31.1 per cent in 2005/06. There was improvement in health outcomes such as life expectancy from 48 years in 1998 to 63.3 years in 2017.

Covid-19 disruptions

Covid-19 affected the domestic economy through disruptions in the global economy seen in the demand and supply chains. Its spread led to slowdown and other containment measures which severely impacted economic growth and welfare.

“Economic growth reduced to below the last decade average of 4.5 per cent. The slowdown in economic growth affected government’s financial position (government revenue losses against an increase in expenditures) required to deal with the pandemic resulting into an increase in public debt from 41 per cent at the end of FY 2019/20 to an estimated 49.9 per cent in FY 2020/21,” he explains.

This further resulted in increased unemployment due to the closure of businesses and the social sector. An estimated total number of 100,000 formal and 4.4 million informal jobs/livelihoods were lost.

Stimulating growth

To stimulate economic growth and development for sustainability, first there is a need to undertake immediate/ short-term strategies to support economic recovery.

“This means maintaining households’ economic welfare, or boosting aggregate demand by creating jobs for the most vulnerable such as labour intensive public works (employing youth to work on roads) and providing emergency social protection,” he says adding that there is need to increase access to low interest financing to most affected areas via Uganda Development Bank (UDB) (Shs558b) and Uganda Development Corporation (Shs100b).

Secondly, there is a need to continue with long term growth and development goals by focusing on the implementation of NDPIII growth and development objectives.

In addition, public sector efficiency must be improved and fiscal governance enhanced to achieve value for money.

However, the most critical interventions are those that will allow full re-opening of the economy to increase and sustain the pace of growth. This requires widespread vaccination of Ugandans against Covid-19.

Although vaccination is not a direct form of economic stimulus, it is the best kind of stimulus because it allows relaxation of the lockdown measures and hence full re-opening of the economy.

“It is about strengthening the country’s regional and international competitiveness and hence securing market access for Uganda’s products and services. This is through ensuring we can export our products,” he said.

In addition, the rapid industrialisation particularly in agro industry, light manufacturing and others with high output and multipliers such as food processing, increasing productivity and production in agriculture to provide the necessary raw materials for the industry.

He added that Covid helped businesses realise the significance of corporate governance through proper documentation. Proper book keeping accounts for every cent within the business and economy.

“We need to adopt a comprehensive and integrated approach to auditing. This calls for a review of the public sector reporting to enable the Office of the Auditor General to provide options that relate to accountability with results and value for money such that the people of Uganda can get value for their pay,” he said.

This means people are held accountable. He called upon accountants to support him since the biggest challenge is sustaining and accelerating growth of the economy.

Mr Constant Mayende, president, at the Institute of Certified Public Accountants of Uganda said there are many petitions in Court regarding accountability which affects growth. 

“To stimulate growth and resilience, the government needs to support different sectors especially IT,” he said.

Economic recovery

The most critical interventions are those that will allow full re-opening of the economy to increase and sustain the pace of growth hence the need for widespread vaccination of the population against Covid-19.

Although vaccination is not a direct form of economic stimulus, it is the best because it allows relaxation of the lockdown measures and hence full re-opening of the economy.

“We need to adopt a comprehensive and integrated approach to auditing. This calls for a review of the public sector reporting to enable the Office of the Auditor General to provide options that relate to accountability with results and value for money such that the people of Uganda can get value for their pay,” he said.