The recovery of the tourism sector disrupted by budget cuts
Kampala, Uganda | THE INDEPENDENT | The Ministry of Tourism has asked Parliament to exempt the tourism sector from budget cuts to allow the sector to recover from the COVID-19 pandemic.
In a meeting on Thursday between the Parliamentary Tourism, Trade and Industry Committee 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 in the tourism sector are unfunded by the government in the coming financial year 2022/2023.
Documents submitted to the committee indicate that part of the 87.2 billion, UTB needs 49.97 billion, the ministry 28.44 billion, Uganda Wildlife Education Center (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 the sector remains poorly funded to play its role in a meaningful way.
The government has allocated 176.9 billion shillings to the tourism sector under the budget framework document for the financial year 2022/2023.
According to Bahinduka, this is a cut of 20.5 billion shillings from what has been allocated to the sector over the past two years.
Doreen Katusiime, permanent secretary at the Ministry of Tourism, said the sector’s performance and efforts to accelerate recovery are being undermined by inadequate budgets.
“The funding situation has been aggravated by budget cuts applied to consumer items such as advertising and public relations, overseas travel, domestic travel, consultancy services, maintenance, room rental, allowances and subsidies, among others.The application of this policy has not taken into account the nature of business processes of particular ministries, departments and agencies and, therefore, tourism agencies have been deeply affected given the nature of their operations and we lost 20 billion in the 2021/2022 fiscal year,” Katusime said.
She added that underfunding on top of budget cuts was making their situation worse and destroying the country’s tourism competitiveness, but Uganda’s neighbors in the East African region are maintaining and increasing funding to the sector.
In the current financial year 2021/2022, Kenya has allocated a total budget of 532.9 billion to tourism while Tanzania has allocated 617.1 billion to the sector.
“Tanzania and Kenya allocate more than 1% of their total budget compared to Uganda which allocates less than 0.5% of its total budget to tourism. Tanzania and Kenya inject 3 times more resources into tourism than Uganda. Thanks to tourism funding in Kenya and Tanzania, at least 7 out of 10 visitors to Kenya or Tanzania are leisure tourists compared to Uganda where only 2 out of 10 visitors are leisure tourists,” Katusiime explained.
Katusiime said with the Covid-19 pandemic, it is important that Uganda gets a proper response in order to recover its tourism with adequate funding. She told MPs that tourism has great transformative power in Uganda’s economy if fully harnessed.
Prior to the onset of the Covid-19 pandemic, tourism was Uganda’s main source of foreign exchange for the economy and society, bringing in US$1.6 billion, contributing around 8% to gross domestic product- GDP and more than 500,000 jobs. The country’s tourism has grown, its contribution to GDP reaching 8.36 trillion shillings.
However, this has changed since 2020 following the Covid-19 outbreak. Foreign exchange earnings fell to 0.5 billion US dollars, foreign visitors fell by 69.3% from 1,542,620 registered visitors in 2019 to 473,085.
Kajara County MP Micheal Kamugisha Timuzigu said the ministry needs to be very firm to ensure that the tourism sector is allocated enough resources.
Steven Mugole, the Kabweri County MP, said the funding shortfall in the tourism sector is regrettable given that the sector is one of the hardest hit by the Covid-19 pandemic.
Rita Atukwasa, MP for Mbarara town, wondered what the ministry and other tourism entities were doing to develop domestic tourism.