Uganda's government plans to increase spending by about 19 percent in the fiscal year through June, 2010, more than previously announced, to cushion the impact of a slowing global economy, the finance minister said.
Finance Minister Syda Bbumba told lawmakers in her budget speech in Kampala on Friday, which expenditure will increase to 7.3 trillion shillings (3.3 billion), that compares with the 7 trillion shillings announced in a statement from the ministry late Friday, and the 6.3 trillion forecasts in April.
The state will increase spending on mining, education and agriculture and will seek to complete plans for the construction of the 700-megawatt Karuma hydropower plant.
The increase in release will help revive economic growth that slowed in the current fiscal year following a slump in demand from the developed world because of the global financial crisis.
Economic growth will probably slow to 6 percent in the next fiscal year from 7 percent in the previous 12 months, Bbumba said today.
The International Monetary Fund in April forecast growth in Uganda would slow to 5.5 percent in the year through June, 2010.
Domestic revenue will account for 67.4 percent of the budget, with the rest coming from donors, Bbumba said.
Spending on agriculture, which accounts for 15 percent of Uganda's economy, will rise 47 percent to 328.2 billion shillings, the minister said. It plans to spend some of the funds on high-yielding, pest- and disease-resistant crop varieties.
On June 4th, President Museveni said Uganda has found a market for its food crops in neighboring countries, with corn and bean exports expected to increase by 55 percent and 34 percent respectively this financial year.
Bbumba said Expenditure on the energy and mining industries will leap 52 percent to 698.9 billion shillings, the finance ministry said Friday as the government tries to ease power shortages.
The government aims to complete plans for the Karuma hydropower project, which was suspended after the collapse of talks with Norway's Norpak Power Ltd.
Last Year, Museveni said Uganda has begun raising funds for its biggest power project, which may cost more than $1 billion.
Education will receive 18 percent more funding, with an allocation of 1.06 trillion shillings.
The cost of servicing the country's debt probably fell about 14 percent to $53.7 million in the current fiscal year, the finance ministry said. It will rise 3.5 percent to $55.6 million in the next fiscal year, it added.
Uganda, with an $11 billion economy and a population of more than 30 million, is Africa's largest producer of robusta coffee.