Musasizi: Boosting Exports and Cutting Waste Key to Saving the Shilling

State Minister for Finance Henry Musasizi has highlighted export growth and curtailed public expenditure as vital measures to ease ongoing pressure on the Ugandan shilling. Speaking during a television appearance, Musasizi defended the country’s economic standing while acknowledging that the foreign exchange market has faced significant headwinds.

The shilling experienced notable depreciation, sliding from roughly Shs3,600 against the US dollar earlier in the year toward Shs4,500. According to the minister, this decline is largely tied to a surging demand for dollars, propelled by escalating global fuel costs and diminished foreign exchange inflows from key sectors.

Global oil fluctuations have heavily impacted domestic expenses, increasing the cost of importing fuel and transporting commodities from the port of Mombasa to Kampala. During the period, diesel retailed around Shs7,200 per litre, with petrol at approximately Shs6,900. Simultaneously, foreign currency earnings took a hit following travel restrictions from earlier outbreaks affecting tourism, alongside sliding international prices for major agricultural exports like coffee and cocoa.

To build long-term resilience, Musasizi argued that Uganda must prioritize agro-industrialisation, mineral development, tourism, value addition, and science and technology to scale up exports. Generating more foreign exchange through finished products will naturally counteract heavy import reliance.

In the immediate term, the government is implementing fiscal adjustments by tightening public expenditure. Ministries and agencies have been urged to cut non-essential travel, reduce delegation sizes, and utilize virtual meeting platforms to conserve resources and redirect funds into productive sectors.

While officials maintain that broader macroeconomic indicators remain resilient, the depreciated currency continues to pose challenges for households and businesses through higher import costs and expensive goods. Read the full report on Nile Post.