The Ugandan government is making substantial efforts to increase tourism revenues from their current standing at $1.6 billion to at least $5 billion. This initiative comes in response to the severe decline in tourism caused by the COVID-19 pandemic, which began in 2020.
During the National Budget Conference for the 2024/25 Budget Strategy, Finance Minister Matia Kasaija expressed confidence in the recovery of the tourism sector. He stated that tourism earnings have been on the rise since 2022, with an average of $260 million in the first quarter of this year, compared to $238 million during the same period in 2022.
Minister Kasaija emphasized that despite these improvements, the sector has not reached its full potential. To achieve this, the government has outlined several interventions aimed at increasing annual tourism earnings to $5 billion by 2028.
Before the pandemic, Uganda earned over $1.6 billion from tourism. However, the current earnings of a little more than $1 billion still fall short of pre-pandemic levels. Minister Kasaija pointed out that unlocking constraints to tourism is essential. This includes improving road infrastructure, investing in information and communication technology (ICT) and tourist sites, ensuring security, countering negative publicity, and addressing travel advisories.
Additionally, the government plans to enhance promotion and marketing, support hospitality training, grade tourism facilities according to international standards, and enforce sanitation regulations. Furthermore, the promotion of domestic tourism within Uganda and regional markets is considered crucial, especially as many tourist facilities rely on peak seasons to sustain their operations.
Apart from tourism, the government reported positive trends in other economic sectors. Remittances reached $1.38 billion in the year ending in March, largely due to improved economic conditions in source countries. Foreign Direct Investments (FDI), which had sharply declined to $874 million in 2020, rebounded to $1.52 billion in 2022, reaching record levels.
Minister Kasaija highlighted Uganda’s strong performance in FDI inflows in 2022, ranking among the top 10 African countries. It secured the top spot in East Africa due to increased activity in the minerals sector and oil and gas, following the Final Investment Decision in February 2022.
However, despite these positive indicators, revenue performance for August fell slightly below target, with the government collecting UGX 4 trillion against a goal of UGX 4.13 trillion, resulting in a shortfall of UGX 100.67 billion. Nonetheless, there was a notable 12.5 percent growth in revenues, totaling Shs405.21 billion.
Minister Kasaija also underscored the government’s commitment to job creation, revealing that between 2016 and 2021, a total of 1.8 million jobs were generated across various sectors of the economy. He emphasized that the budget would continue to invest in science education and skill development through vocational and apprenticeship training, aiming to enhance innovation, research, and development.