Tourism is increasingly becoming an important sector supporting the economic diversification of Uganda’s economy. At the moment, it is the country’s leading foreign exchange earner and continues supporting creation of jobs and significantly contributing to the development of other sectors of the economy such as construction, manufacturing, retail and financial services. According to the Tourism ministry statistical abstract 2016, tourism contribution to GPD increased from Shs 6,395 billion in 2014 to Shs 7,270 billion in 2015 translating into 9 per cent of Uganda’s GDP in 2015.
Foreign exchange earnings from tourism grew by 2.9 per cent from $1.312 billion in 2014 to $1.35 billion in 2015. Tourism is among the key sectors that government intends to prioritise to enable the country attain its economic transformation and middle income status target by 2020. However, over the years, the sector has suffered from small budget allocations with government funding declining in Financial Year (FY) 2016/17 and expected to decline further in FY 2017/18. The proportion of the sector budget to the National Budget has stagnated between 0.1 per cent and 0.2 per cent over the last five years. While overall, the budget for the sector has increased by 2.5 per cent from Shs96.51 billion in FY 2016/17 (approved) to Shs98.94 billion (proposed) for FY 2017/18 billion, the proposed government contribution has reduced from Shs 29.23 billion in FY 2016/17 to Shs27.25 billion in 2017/18.
Budget cut
The budget for the Ministry of Tourism, Wildlife and Antiquities has suffered a net reduction of Shs1.38 billion majorly due to the budget cuts across all Ministries, Departments, and Agencies (MDAs). The ministry’s permanent secretary, Doreen Kansiime, says these cuts where applied to all ministries targeting what government referred to as consumptive items and mainly affected the ministry’s recurrent budget. She says what looks like consumptive in other sectors, for the tourism sector it is productive citing travel abroad. “For example, our travel abroad was cut by 50 per cent yet as part of what we do that is a core activity to us because we have to engage, participate in international expos, market and advertise. What is considered consumptive, to us it is actually an investment, you cannot sell, what you cannot show advertise or promote. For us this is really critical,” Kansiime said. This means the ministry cannot engage at the international fora where policies are decided and will also be unable to do research to inform plans and strategies.
While investment in marketing is key in selling the country and eventually contributing towards growth of the sector, the proposed budget of Uganda Tourism Board has also been reduced from Shs11.81 billion to Shs11.21 billion. The board’s executive director, Stephen Asiimwe, said the amount appropriated is inadequate. “In terms of where we are headed I think we need more resources. First because we have created very good visibility across the world but to do more we need more resources,” he said. He says they are still in negotiations with Finance ministry to see to it that more money is availed. “We have created a compelling case for more resources. I believe they will give us more money. We had requested for an extra Shs27 billion.” Kansiime says while Uganda has made some gains in terms of international exposure through promotion by the international PR firms, funds have not been availed to extend their contracts, a fact she says will be a big setback to the country’s efforts to sell abroad.
“That will be a big blow to us if we engage them for only one year and we are not able to renew their contract to engage for the other year because as you can tell, our visibility was beginning to rise in the source markers of US, UK and Europe so we will have really lost the money we have put in if we cannot consolidate those gains and build on them,” Kansiime argues. She also reveals that the ministry has come up with a marketing strategy that will help harmonise the country’s marketing efforts. The country has been having disjointed marketing activities by different agencies without a harmonised message and efforts.
Lacking in equipment
In terms of conservation and sustainable utilisation of wildlife resources, the Uganda Wildlife Authority is also having a funding gap of Shs25 billion. Part of this money (Shs14.5 billion) is to help procure helicopters and drones to be used in aerial surveillance of protected areas and intelligence. For the Uganda Wildlife Education Centre in Entebbe commonly known as Entebbe zoo, some of the activities expected in the coming financial year include refurbishing the floating restaurant and rehabilitation of animal exhibits. The centre’s executive director, James Musinguzi, says they are expecting Shs650 million from government to support some of the planned activities. “We expect about Shs550 million for capital development from government and a contribution of Shs100 million for the wage bill. so we expect Shs650 million in total. The rest will be generated locally from the products we offer here at the centre,” he said.
Cutting costs
For some of the gains to the sector, government has proposed removal of VAT on entrance fees to tourism sites and tour guides and game driving services. The ministry believes this incentive will help reduce the cost of the destination thereby encouraging more tourists to visit destination Uganda. The ministry is having a number of planned activities for the next financial year and targets for the sector such as increasing the tourist numbers. The ministry wants to increase the numbers from the current Shs1.3 million to Shs4 million tourists by 2020, however, Kansiime expresses fear that if the required funds are not availed, it would undermine achievement of this target. “As a sector, we will not be able to meet the targets we had set in terms of numbers because we may not be able to reach the source markets we had identified, and we may also not be able to do the planned development of new products,” Kansiime said.
Worrying trend
The proportion of the sector budget to the National Budget has stagnated between 0.1 per cent and 0.2 per cent over the last five years. While overall, the budget for the sector has increased by 2.5 per cent from Shs96.51 billion in FY 2016/17 (approved) to Shs98.94 billion (proposed) for FY 2017/18 billion, the proposed government contribution has reduced from Shs29.23 billion in FY 2016/17 to Shs27.25 billion in 2017/18.
By Benjamin Jumbe
