Uganda’s cash use transformation will curb wastage and help maintain long-term growth
After years of recording over five percent annual growth, Uganda, now in the midst of an economic take off following the discoveries of oil in western Uganda has finally started instituting transformational policies to maintain its current rate for the long term. As I have argued before, the republic of Uganda has a great future and unmatched potential http://www.contadorharrison.com/theres-great-future-for-uganda-as-it-celebrates-51-years-of-independence/ .One of them is the recently introduced public financial management system that would help government curb wastage. All government ministries and departments in Uganda will be served by a single Treasury account and disbursements done on a quarterly basis compared to the current existing transfers every 30 days. The new system has been cited as the one with stronger security features and will remove transaction powers of accounting officers and there will be limits on cash withdrawals. In addition to that, the new system has monitoring alerts for suspicious entries which means those who have been misusing their allocations have to style up. The new plan will also help address and reduce logistics costs and transactions cost and help expand the fast growing Uganda private sector. Uganda growth has been relatively strong over the past two decades, but the current growth levels would not support the country’s booming population, which is expected to rise from 35.6 million to 98 million in 2050. The growth has been fueled by mostly by agriculture exports and raw materials extractions, which has provided less significant added value.
But with the proposed http://www.contadorharrison.com/entebbe-airport-expansion-will-spur-growth/ the diversification will help the country develop much faster. According to the country’s Finance Minister Hon. Maria Kiwanuka during her 2013-2014 national annual budget the double digit growth is especially the case if the country described by the late British Premier Winston Churchill as pear of Africa goal of development is to double prosperity according to vision 2040 launched by President Yoweri Museveni few months ago http://www.contadorharrison.com/vision-2040-how-to-build-ugandas-future/ . The Uganda treasury cash disbursement transformation will help the country tackle an emerging agenda of development to meet the future challenges of increasing competition in a more integrated East African Community. Manufacturers in Uganda who have helped sustain the economic growth have been hampered by high prices of raw materials which have resulted in most of them seeing no incentives to move up the ladder of value addition that has made their neighboring Kenya and Tanzania manufacturers dominate the region’s fast moving consumer goods. Research conducted last showed that high-income group that enjoyed the benefits of such industries but the middle and lower income groups have benefitted significantly less. Uganda just like other developing countries has experienced development that is not inclusive and has been characterized by rising inequality although compared to their neighbors like Kenya, Tanzania, Rwanda and Burundi the country fares better. The new cash policy in Uganda government is evidence that the country is taking the right step to embrace a more integrated strategy in development plans. Reforms in how the country spends it cash will no doubt promote more dynamic and lasting change and help Uganda achieve vision 2040.