Prime
Mr. President, investing 0.5% of our budget in tourism, to create 8.5% of GDP, is tourism without ekibaro
Civy Tumusiime
What you need to know:
To bring to life the government’s agenda to increase tourism revenues to $ 5 billion, we invite you to relook at the planned investment by the government in the tourism sector.
March marks four years since Your Excellency on March 18, 2020, ordered the greatest part of the country to shut down due to Covid-19 , effective March 20, 2020. The country would subsequently go into a series of openings and re-closures, until early January 2022 when the country and the economy fully re-opened.
We were delighted to learn, during your recent national address on the eve of the 38th NRM victory anniversary celebrations that this economic recovery continues the economy grew to Shs184.89 trillion ($ 49.5 billion) in the financial year 2022/2023, up from Shs162,750 billion ($ 45.6 billion) registered in financial year 2021/22. We were also glad to learn that building on this momentum, the size of the economy is projected to grow to Shs204.9 trillion ($ 55 billion) by the end of the financial year 2023/24 and then leap to Shs 225.5 trillion in the financial year 2024/25 (equivalent to $ 60 billion).
Specifically, for the tourism industry we were elated to learn that as of the end of FY2022/23, there was a 9 percent increase in sector earnings from $978.35 million in the financial year 2021/22 to $1,066.41 million.
However, as the private sector, we do strongly share in the sentiments in your speech that although the Ugandan tourism sector has remarkably recovered, it is capable of doing even much better, which is why we are excited at the ambitious government agenda to increase tourism receipts to $ 5 billion per annum by 2028.
We also share in your observations that with an estimated value/impact of $2 billion in 2019 Uganda’s market share of the global tourism sector is disproportionately low below 0.1 percent of the global industry GDP impact of $9.5 trillion[2] as of 2023.
While we are yet to be fully made aware of the government’s plans for achieving this ambitious $5 billion agenda, as the people on the ground in the sector, we would like to bring to your attention that a lot of the issues in our sector lie around a persistently low and disproportionate direct investment by the government in the sector.
A logical standard of measuring this proportionality is benchmarking against how much direct contribution a sector contributes to GDP versus what portion of the National Budget the government directly invests in that sector.
The Ministry of Tourism, Wildlife & Antiquities (MTWA) in its FY2022/23 Tourism Development Programme Annual Performance Report reports that while in the first three years of the NDP III period of 5 years (FY 2020/21 – 2024/25), the government was expected to have invested a total of Shs2.906 trillion, this didn’t come to pass. Only a cumulative total of Shs 576 billion (just 20 percent) was approved as government funding. This includes the Shs 238 billion in non-tax revenue collections from the Ministry and its agencies. The report also notes that for example during the FY 2022/23, only Shs 199 billion was appropriated against the NDPIII planned expenditure of Shs 635 billion translating into just 31 percent. Of this, only Shs180.6 billion (91percent) was released. The marketing component only received Shs24.5 billion a mere 33 percent of the Programme’s budgeted Shs73.54 billion. Certainly, the Shs248.7 billion allocated for FY2023/24 is also below NDP III targets.
In FY2023/24 for example, the tourism sector was allocated Shs248.7 billion out of a total national budget of Shs52.7 trillion, an equivalent of only 0.47 percent.
According to the Budget Framework Paper for FY2024/25 presented to Parliament, while the overall budget is expected to grow by 3.6 percent from Shs52.7 trillion to Shs54.6 trillion, the allocation for the tourism sector remains unchanged at Shs248.7 billion- equivalent to 0.46 percent of the budget.
Over the next 5 years, tourism sector budget allocations are projected to averagely increase by 10 percent annually to Shs297.2 billion, Shs352.7 billion, Shs413 billion and Shs481.9 billion in FY 2025/26, FY2026/27, FY2027/28 and FY2028/29 respectively, when you factor in the inflationary pressures (an average of 5 percent), these increments cannot bring about the desired change.
It also remains proportionately too low, compared to the sector’s contribution to GDP in 2022, tourism contribution to Uganda’s GDP was $ 2.1 billion (4.7 percent) of GDP.
To bring to life the government’s agenda to increase tourism revenues to $ 5 billion, we invite you to relook at the planned investment by the government in the tourism sector. Otherwise, investing less than 0.5 percent of our budget in a sector that we expect to contribute 8.5percent of GDP in the medium term, is tourism without ekibaro (cura, aimar, otita) as your, Excellency, likes to say.
Ms Civy Tumusiime is the chairperson of the Association of Uganda Tour Operators.
