Budget focuses on poverty alleviation

Uganda has committed some US $86.6 million to the agricultural sector to help reduce poverty among the country’s rural poor through better agricultural practices and improved market access, finance minister Ezra Suruma said on Wednesday.

He made the announcement in his budget speech, in which he said the current budgetary allocation for agriculture marked a 29 percent increase in government spending on the sector.

The increased spending was intended to "impact the livelihood of the greatest number of poor households", the minister said.

Agriculture is Uganda’s main source of foreign income, and the means by which the majority of the population earn a living. Uganda is among the world’s 10 largest coffee producers.

The government programme, he added, would include intensified provision of appropriate technologies and input kits including fertiliser, improved seed, pesticides and herbicides and co-operative storage facilities, according to the minister.

The $2.2 billion-budget, however, proposed increases in a number of taxes that economists said would have a negative impact on the lives of the people they were intended to pull out of poverty.

Suruma announced an increase in Value Added Tax, as well as new taxes on commodities such as sugar, and higher duty on fuel in an apparent effort to reduce Uganda's dependence on donor funding.

Britain announced in April that it would be withholding five million pounds sterling (US $9.6 million) in aid to Uganda, and said more funding would be cut unless the east African country’s political transition picked up pace.

Ugandan President Yoweri Museveni has been accused of showing a lack of commitment to opening up the country’s political space to allow for a more pluralistic system.