Musasizi Says Export Growth Is Key to Shilling Recovery

What the report says

Uganda’s Finance Minister Henry Musasizi says the country can ease pressure on the foreign exchange market and help the shilling recover by expanding exports, increasing domestic production and trimming unnecessary government spending. Speaking on NBS Morning Breeze, as reported by Nile Post, he linked the currency’s recent weakness to stronger demand for dollars, higher global fuel prices and lower foreign exchange inflows.

Musasizi said Uganda’s reliance on imported fuel makes the economy vulnerable to shifts in international oil prices because more foreign currency is needed when fuel becomes expensive. He also pointed to reduced earnings from tourism and agricultural exports, saying travel disruption linked to the Ebola outbreak affected tourist arrivals and foreign currency receipts, while lower prices for some commodities have weighed on export income.

The minister argued that the longer-term response should be to earn more foreign exchange through agro-industrialisation, tourism, mineral development, value addition and investment in science and technology. He said exporting more finished goods would improve Uganda’s dollar earnings and reduce reliance on imports, which in turn would support currency stability.

In the short term, Musasizi said government is tightening expenditure by encouraging ministries and agencies to cut travel, reduce delegation sizes and use virtual meetings more often. The comments come as households and businesses face higher import costs and pricier goods and services due to the shilling’s depreciation.