Uganda Sets aside USD85.52 million to build 700 MW dam
Uganda's rate of economic growth is expected to rise slightly during the next fiscal year as the country ramps up investments in transportation infrastructure, energy and education, the finance ministry said on Thursday.
East Africa's third largest economy projects its economy to expand by 5.4 percent in the 2012/13 (July-June) fiscal year, from an estimated 5 percent this year, boosted by increased spending on infrastructure.
Africa's largest coffee exporter, hit by rising inflation, a weakening currency and high interest rates last year, also will focus on taming inflation while trying to boost economic recovery, a budget framework paper showed.
Tight dollar inflows against soaring demand triggered a plunge of the shilling which hit an all-time low of 2,901 per dollar in September, while inflation soared to an 18-year high of above 30.4 percent in October.
"The primary macroeconomic objectives for FY 2012/2013 includes reducing inflation to single digits and to promote economic recovery from the recent slowdown in economic growth," the paper from the finance ministry showed.
"GDP (gross domestic product) growth is expected to recover... due to the expected strong investments in agricultural production and productivity, power and roads, and restoration of macroeconomic stability," the ministry said.
One key project is the 700-megawatt Karuma hydro station, to be developed on Karuma falls on the Nile, for which the government has set aside 215 billion shillings ($85.52 million).
Although it aims to be a top-50 crude oil producer, Uganda suffers a chronic power supply crisis which has long distressed businesses, slowed economic growth and stymied development.
Last year, 24-hour-long power outages ignited a series of riots across the country where the electricity supply deficit currently stands at about 130 MW at peak demand.
These and other projects will push total government expenditure to 10.1 trillion shillings in the 2012/13 fiscal year, of which the government has 7.3 trillion shillings. The remainder of the funding will come from direct budget support and project financing, the paper showed.
The government expects to spend a projected 9.7 trillion shillings in 2011/12, and has an estimated 7.2 trillion shillings in its coffers.
The paper said the government is making plans on how to spend revenue from oil production. British explorer Tullow Oil has said it expects small-scale oil and gas production later this year, and says it has found 1.1 billion confirmed barrels of oil.