Experts on Uganda’s economy have questioned the usefulness of having billions of shillings saved in a foreign reserve fund while sections of the citizen continue to live in poverty, others dying due to lack of sufficient health care.
Lawrence Bategeka, a senior Research Fellow at Economic Policy Research Centre commented that the country has for many years saved money in a foreign reserve managed by the Bank of Uganda; a fund, which he said has not improved the status of the citizens.
He also questioned the provision of the Petroleum Revenue Management that is contained in the Public Finance Bill that seeks to save oil money in a foreign reserve called Petroleum Revenue Investment Reserve.
Bategeka said it was necessary to invest in the specific needs that would improve the capacity of the citizens to produce services to meet their needs. He further demanded that government should channel such funds to creating employment opportunities.
Ezra Suruma, a senior presidential Advisor on Finance and Planning reiterated Bategeka’s concern when he noted that it was not necessary for the country to keep billions of shillings in a foreign destination such as New York when the people intended to benefit from the money are helpless.
Suruma, a former Deputy Governor of bank of Uganda who later served as Minister of Finance, Planning and Economic Development, explained that there were many needy people living who could benefit if such foreign reserves were spent on services such as healthcare and education.
Suruma said it was necessary for government to establish social protection measures and provide a standard of life below which no citizen would be left to live in. He also questioned the philosophy of saving for the future, as the provision on oil revenue states, when there were many people who urgently need help from government.
we have established that the country presently has about 3 billion US Dollars saved in foreign reserves. Kelvin Kizito Kiyingi, Acting Director in charge of Communications at Bank of Uganda told our reporter that the country’s foreign reserve was about 3 billion US Dollars but added that the exact amount varies from day to day because of the operations of the bank and the frequent changes in exchange rate between the US dollar and other internationally traded currencies, such as the Euro.
He also explained that the foreign reserves are a buffer primarily used to maintain stability of the exchange rate through purchase or sale of foreign currency, in case of shocks to the balance of payments. He added that the foreign reserves are only kept in the form of safe, liquid assets, such as investment grade sovereign debt instruments and bank deposits.