Tourism sector recovery disrupted by budget cuts

Kampala, Uganda | THE INDEPENDENT | The Ministry of Tourism has asked Parliament to exempt the tourism sector from budget cuts to enable the sector recover from the COVID-19 pandemic.

During a meeting on Thursday between Parliament’s committee on Tourism, Trade, and Industry and officials from the Ministry of Tourism, Wildlife and Antiquities, Uganda Tourism Board (UTB), and others, MPs learned that activities worth 87.2 billion Shillings under the tourism sector are not financed by government in the coming financial year 2022/2023.

Documents before the committee indicate that part of the 87.2 billion, UTB needs 49.97 billion, the Ministry 28.44 billion, Uganda Wildlife Education Centre (UWEC) 4.3 billion, Uganda Wildlife Authority (UWA) 2.5 billion, and others.

Martin Mugarra Bahinduka, the Minister of State for Tourism, Wildlife and Antiquities told MPs that the sector remains poorly funded to perform its role meaningfully.

The government has allocated 176.9 billion Shillings for the tourism sector under the 2022/2023 financial year Budget Framework Paper.

According to Bahinduka, this is a reduction of 20.5 billion Shillings from what was allocated to the sector in the last two financial years.

Doreen Katusiime, the Tourism Ministry Permanent Secretary said that the sector’s performance and efforts to achieve faster recovery are being derailed by inadequate budgets.

“The funding situation has been worsened by budget cuts which were applied on consumptive items such as advertising and public relations, travel abroad, travel inland, consultancy services, maintenance, hire of venue, allowances and subventions among others. The application of this policy did not consider the nature of business processes of particular Ministries, Departments, and Agencies and as a result, tourism agencies were deeply affected given the nature of their operations and we lost 20 billion in the financial year 2021/2022,” said Katusiime.

She added that the under funding in addition to the budget cuts are worsening their situation and destroying the country’s tourism competitiveness, yet Uganda’s neighbors in the East African region are sustaining and increasing funding to the sector.

In the current financial year 2021/2022, Kenya allocated a total budget of 532.9 billion to tourism while Tanzania allocated 617.1 billion to the sector.

“Tanzania and Kenya allocate more than 1 percent of their total budget compared to Uganda that allocates less than 0.5 percent of its total budget for tourism. Both Tanzania and Kenya inject 3 times more resources in tourism than Uganda. As a result of the funding to tourism in Kenya and Tanzania, at least 7 in 10 visitors to Kenya or Tanzania are leisure visitors compared to Uganda where only 2 in 10 visitors are leisure tourists,” Katusiime further explained.

Katusiime said that with the Covid-19 pandemic, it is important that Uganda gets an appropriate response in order to recover its tourism through adequate funding. She told MPs that tourism has a high transformative power to Uganda’s economy if fully harnessed.

Before the onset of the Covid-19 pandemic, tourism was Uganda’s leading foreign exchange earner for the economy and society bringing in US Dollars 1.6 billion, contributing about 8 percent to the Gross Domestic Product- GDP and over 500,000 jobs. The country’s tourism had expanded with its contribution to GDP reaching 8.36 trillion Shillings.

However, this has changed since 2020 following the outbreak of Covid-19. Foreign exchange earnings have dropped to US Dollars 0.5 billion, foreign visitors dropped by 69.3 percent from 1,542,620 visitors recorded in 2019 to 473,085.

Micheal Kamugisha Timuzigu, the Kajara County MP said that the Ministry needs to be very assertive to ensure that the tourism sector is allocated enough resources.

Steven Mugole, the Kabweri County MP said that the financing gap in the tourism sector is unfortunate given that the sector is one of the worst-hit by the Covid-19 pandemic.

Rita Atukwasa, the Mbarara City MP wondered what the Ministry and other tourism entities are doing to develop domestic tourism.

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