Minister Musasizi Urges Calm Amid Shilling Depreciation, Outlines Government Strategy

State Minister for Finance Henry Musasizi has called upon Ugandans to remain calm and avoid panic as the local currency continues to experience depreciation against the dollar. Appearing on television, the minister explained that much of the pressure on the shilling stems from external shocks, including rising global crude oil prices and ongoing conflicts in the Middle East that have inflated import costs.

The depreciation of the shilling makes it harder for local importers who require foreign currency to purchase fuel, machinery, and industrial raw materials. This dynamic often translates to higher production costs and increased retail prices for consumers across the country.

Rather than relying on temporary measures like subsidies or depleting foreign exchange reserves, the government is leaning toward sustainable structural policies. Musasizi stressed that the long-term solution involves boosting domestic production and expanding exports in key sectors such as agriculture, manufacturing, and agro-processing. Strengthening local value addition will generate more foreign exchange and reduce the country’s reliance on imported goods.

On the fiscal side, the administration plans to curb non-essential government spending. Measures include reducing domestic and international travel and conducting meetings virtually to prioritize resources toward critical growth sectors and essential public obligations.

Meanwhile, the Bank of Uganda has adjusted monetary policy by raising the Central Bank Rate to 12 percent and increasing the Cash Reserve Ratio. These actions are designed to manage liquidity, contain inflation, and protect macroeconomic stability, even though they may temporarily increase borrowing costs for commercial enterprises.

For more details on this developing story, read the full report on Nile Post.