HomeBUSINESSParliament Asked Exempt Tourism Ministry MDAs from Budget Cuts.

Parliament Asked Exempt Tourism Ministry MDAs from Budget Cuts.

By Jimmy Muhumuza, 

Parliament. 

The Ministry of Tourism has asked Members of Parliament to exempt the tourism ministries, departments, and agencies (MDAs) from budget cuts in order to revamp the COVID-19 hit sector.

Officials from the Ministry led by Hon. Bahinduka Martin Mugarra, the State Minister for Tourism, Wildlife, and Antiquities, made this request while presenting the Budget Framework Paper for FY 2022/23 before the Parliamentary Committee on Trade & Tourism, on Thursday.

“Am therefore requesting this honorable Committee that in addition to extra funds you may grant us to fund our unfunded key interventions amounting to Ushs 87.2 billion, the Tourism MDAs be exempted from budget cuts on consumptive items, given the nature of the business processes of the MDAs which involve advertising and public relations, travel abroad, travel inland, maintenance, hire of venue and subventions among others,” Mugarra said.

According to the Minister, their efforts to achieve faster recovery of the tourism sector are being derailed by inadequate budgets and subsequently requested the Committee to exempt the sector from budget cuts and also fund the sector’s key unfunded priorities amounting to Shs87.2 billion.

He revealed his dismay at the persistent underfunding and budget cuts on consumptive items on tourism.

“The appropriation to the tourism sector has historically been below the threshold required for the industry to perform its role meaningfully. A sector that generates about 10 per cent of the GDP cannot be continually allocated less than 0.4 per cent of the national budget,” Mugarra said.

The tourism sector has over the last two financial years lost over Shs22 billion on account of budget cuts on consumptive items.

In the coming FY 2022/23, the Tourism Development Program has a Medium Term Expenditure Framework provision of Shs176.9 billion which is a reduction of Shs20.5 billion that the sector has as approved budget in 2020/21.

The Tourism sector demanded that their budget ceiling for 2022/23 be increased to Shs259.1 billion from the current Shs176.9 billion if they are to revamp the sector that was seriously hit by COVID-19. 

The ministry revealed that foreign tourist arrivals dropped by 69.3 percent to 473,085 from 1,542,620 visitors in 2019 causing a drop in foreign exchange earnings from US$1.6 billion in 2019 to US$0.5 billion in 2020.

“Tourism has high transformative power to Uganda’s economy if fully harnessed. If we can attract 100,000 additional tourists in the country then our tourism exports would increase by US$98 million and add one per cent to the GDP,” Mugarra said.

The Committee pledged total support to enhance budget allocations for the tourism sector on the condition that they come up with creative and strategic interventions to attract both domestic and foreign tourists.

“It is a big concern that the tourism sector has budget shortfalls everywhere yet the sector has potential to thrive. We are going to support you. We can cut money elsewhere, and ensure that tourism is fully funded,” Hon. David Mugole Mauku (NRM, Kabweri County).

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