A mini survey conducted by Uganda Radio Network among city traders indicates that there might be nothing to write home about considering that the concluding financial year has been disastrous.
With just hours left to the reading of the new budget, many Kampala traders are wary of what it might mean for business in the next year. A mini survey conducted by Uganda Radio Network among city traders indicates that there might be nothing to write home about considering that the concluding financial year has been disastrous.
Chris Arinaitwe, a trader along Ben Kiwanuka Street says that he expects the new budget to tackle the high interest rates which curtails borrowing for strengthening business. Arinaitwe, who deals in garments, says the high interest rates charged by commercial banks on business loans have prevented most traders from expanding their businesses.
Robert Okello, a printer on Nasser Road says the new budget should boost government spending because most printers actually thrive on orders from various government departments and agencies. Okello says this ending financial year has been very hard for mainly small printers. Arinaitwe and Okello's concerns were re-echoed by Issa Sekitto, the publicist of the Kampala City Traders' Association-KACITA.
Sekitto says that many businesses collapsed in the past one year due to the harsh economic situation, although he could not give the exact figure of the affected businesses. Sekitto says city traders would expect to hear a clear pronouncement on the monetary policy, adding that it would be good to go for that policy that boosts the economy instead of the current inflation targeting policy. He says any monetary policy that would lower the interest rates would be good for business.
According to Sekitto, traders would also like to hear a clear government policy on how it will tackle the erratic foreign exchange market which impacts negatively on imports on which most businesses thrive. It was interesting to note that most city traders were actually unaware that the all important reading of the budget is taking place today. Many seemed oblivious of that fact as they went about their activities.
The new budget is expected to be 10.5 trillion shillings, up from 9.8 trillion shillings in the concluding financial year. The reading of the new budget also comes at a time when for the very first time in 20 years the economy had negative growth, dipping from 6.3 percent in 2010/12 financial to a miserly 3.2 percent, a drop of over three percentage points.