Museveni Explains Dollar Shortage, Warns Against Wasteful Imports

What the report says

President Yoweri Museveni has said Uganda’s pressure on the shilling is being driven by a shortage of foreign currency, and that the longer-term answer is to earn more dollars through exports and tourism rather than relying mainly on government action to steady the exchange rate. He made the remarks at State House Entebbe during events marking Uganda’s 64th Independence Anniversary, according to Nile Post.

Museveni said changes in the dollar’s value affect farmers, businesses and consumers in different ways. He used coffee as an example, arguing that exporters can receive more shillings for the same foreign-currency earnings when the dollar is stronger, even though a weaker shilling also raises the cost of imported goods. He added that tourism disruptions, including fears linked to Ebola, had reduced visitor numbers and therefore lowered foreign-exchange inflows.

The president also questioned using limited reserves to finance imports of non-essential items. He singled out products such as perfumes and human hair as goods Ugandans could cut back on when foreign exchange is tight. His message was that Uganda should protect scarce dollars for essential imports while prioritising productive activities that bring in foreign currency.

The comments come amid continued concern about exchange-rate movements and their effect on prices and business costs. Museveni said Uganda’s inflation remains relatively low, but stressed that the country still needs to build stronger export and tourism earnings to reduce pressure on the economy.