Gov't Releases Shs 15.64Tn Third Quarter Expenditure Of FY2024-2025

The ministry of Finance Planning and economic development has today released the third quarter expenditure for Financial Year 2024/25.

The permanent Secretary of ministry of Finance and secretary to finance while releasing the funds said that the Gross Domestic Product (GDP) grew by 6.7% during the 1st quarter ( July-September 2024) of the current FY 2024/25 compared to 5.6% recorded in the same period of FY 2023/24.

 He noted that by end of December 2024, government of Uganda had collected domestic revenues amounting to Shs 15.33 trillion against a target for the half year of Shs 15.01 trillion,implying a cumulative surplus of Shs 326.83 billion.

"This growth was broad based mainly driven by: food crop production (agriculture); agro-processing and construction (industry); and, wholesale trade and transport activities (services)". He said

High frequency indicators of economic activity have continued to show further improvements in the first half of the financial year.

The Purchasing Managers Index, which gives an indication of business operating conditions in the economy was at 53.1; the Composite Index of Economic Activity, that is used to monitor economic trends, at 170.65; while the Business Tendency Index was recorded at 59.64 in December 2024. Inflation and Exchange rate 

" Whereas headline inflation increased to 3.3% in December 2024, from 2.9% in November, driven mainly by increased demand during the festive season, the overall inflation remains subdued and within the policy target of 5%, thanks to close coordination of fiscal and monetary policies". He added.

 Since the start of this financial year, the Ugandan shillings has maintained relative stability against the US Dollar (USD). In December 2024, the Shilling appreciated by 0.4% having traded at an average midrate of Shs 3,664.08 per USD compared to an average midrate of Shs 3,678.65 per USD in November 2024. This was partly attributed to increased remittances inflows during the month as Ugandans working abroad sent funds back to their families for the festive season, increased Foreign Direct Investment especially to the oil sector, etc. External Sector 

Uganda’s total export earning in Q1 of FY 2024/25 amounted to USD 2.262 billion. This translates to a growth of 21.8% compared to export earnings of USD 1.857 billion recorded for Q1 FY 2023/24.

This growth was majorly due to coffee exports as both the amount of coffee exported and the international price went up significantly. Additionally, other exports including mineral products, flowers, simsim, tobacco contributed to the improvement in the amount of earnings from exports. 

Similarly, Uganda’s import bill also grew to USD 3.161 billion in Q1 FY 2024/25 compared to USD 2.746 billion in Q1 for FY 2023/24. This was on account of the increased value and volumes of non-oil imports over this period. 

 As a result of the higher increase in imports compared to exports (nominally), the trade deficit between Uganda and the rest of the world widened by 1.2% from USD 888.38 in Q1 FY 2023/24 to USD 898.66 million in Q1 FY 2024/25. Foreign Direct Investment and Remittances 8. Remittances for Q1 of FY 2024/25 were USD 389.06 million compared to USD 360.13 million recorded for the same quarter of the previous financial year implying growth of 8%.

Similarly, Foreign Direct Investment (FDI) registered growth of 25.4% in Q1 FY 2024/25 compared to the same quarter of the previous financial year. Total FDI in Q1 FY 2024/25 was USD 799.46 million compared to USD 637.58 million. Domestic Revenue Mobilisation.

By the end of December 2024, Government had collected domestic revenues amounting to Shs 15.33 trillion against a target for the half year of Shs 15.01 trillion, implying a cumulative surplus of Shs 326.83 billion.

 This performance is attributed to improved economic activity and tax administration. During the second half of the financial year, Uganda Revenue Authority (URA) and other revenue collecting institutions are expected to collect a total of Shs 16.65 trillion.

 The total collections expected this financial year are Shs 31.98 trillion. Economic Outlook.

 Based on the performance of the first half of the financial year, the economy is projected to grow between 6 – 6.5%. Additionally, it is projected that inflation will remain within the 5% target of the Central Bank while the foreign exchange rate is also anticipated to remain stable, supported by continued inflows of FDI into the Oil and Gas sector. On the fiscal front, domestic revenues are projected to perform at 100%.