Economists call for Uganda to adopt sustainable spending practices amid global economic shocks. At the Stanbic Economic Insights Symposium, experts criticized government spending habits, underscored the need for preparedness against future shocks, and emphasized the importance of local investment and prudent financial management for sustainable economic growth.
Economists are urging the Ugandan government to prioritize prudent financial management and sustainable spending practices in light of recent global economic shocks. The call comes as Uganda, amidst the election cycle characterized by increased governmental expenditures, faces potential budget cuts and rising inflation amid a backdrop of reduced foreign aid due to shifts in U.S. fiscal policy.
During the 2025 Stanbic Economic Insights Symposium, Dr. Fred Muhumuza, an esteemed economic and policy researcher, noted that although Uganda has navigated the COVID-19 pandemic relatively well and has been less affected by the geopolitical tensions arising from the Ukraine war, the country has not sufficiently learned from these crises. He utilized the Irish Republic’s focus on critical sectors following the Great Recession as a model for Uganda to emulate in preparing for future economic challenges.
Dr. Muhumuza specifically criticized the government’s extravagant spending habits, exemplified by its extensive vehicle fleet. He indicated that by providing essential offices with vehicles, the government could save up to 1 trillion Shillings. He emphasized that without a strategic shift in fiscal policy, Ugandan growth would remain precarious, depending excessively on natural resources.
The U.S. has historically provided Uganda with over 1.2 billion dollars, of which 700 million supports government initiatives. However, Dr. Muhumuza asserted that the allocation of these funds is crucial for real economic impact. He emphasized that without serious discussions on diminishing government expenditure, the country faces uncertain economic viability.
Dr. Adam Mugume from the Bank of Uganda downplayed any severe implications of reduced U.S. aid on Uganda’s economy but acknowledged the importance of minimizing reliance on foreign assistance. Meanwhile, economists from Stanbic Bank conveyed a cautious but positive outlook for Uganda’s economy, driven by coffee, gold exports, and agricultural performance, though concerned about external factors affecting these sectors.
In conclusion, it is evident that Uganda must adopt a more disciplined approach to government spending and focus on long-term economic strategies that prioritize local investment and sector development. While external economic factors pose challenges, fostering resilience through prudent fiscal management and investment in critical sectors will be vital for sustainable economic growth moving forward. Scholars and policymakers alike must take heed of past lessons to enhance Uganda’s future economic stability.
Original Source: www.independent.co.ug
