Uganda budget shock for hotels – ‘Workshop and Seminar tourism’ budget cut by a third


The annual budget reading  yesterday provided a level of shock to the local hospitality industry, when the new Minister for Finance announced a cross the board cut in government budgets and funding  for ‘workshop tourism’. Hon. Maria Kiwanuka, in her first action as minister – she took over from her predecessor Hon. Syda Bumba only hours prior to presenting the annual budget outlines – slashed the respective budget allocations by 30 percent, leaving hoteliers and venue providers reeling from the likely impact of this decree, taken according the Minister to reduce ‘wastage’ in government funding.

At the same time advertising budgets for all government bodies were slashed by 50 percent, leaving those media depending on extensive government adverts reeling too.

The new budget outline seeks to re-allocate as much as 40 billion Uganda Shillings made in such savings to other sectors like health, education, infrastructure and business support as the new minister demands ‘austerity’ from government and is intent to cut discretionary spending across the board.

Hence, the tourism and hospitality sector in Uganda braces now for a double whammy as local spending on workshops and seminars, a mainstream activity by many hotels in Kampala, Entebbe, Mukono, Jinja and across the entire country in fact will see a third less bookings from government bodies while the allocation of funds to the newly created Ministry of Tourism and most notably the Uganda Tourist Board remain frugal, to put it nicely.

Yet, the budget also addressed key issues on price rises for ordinary wananchi, like the removal of excise duty on kerosene, removal of taxes and duties on imported farming implements like hoes and a substantial reduction on the import duty on food supplements, which should translate to lower prices on the market very early and – good for tourism – take the sting of the opposition campaign to create chaos in the city riding on the sentiments of the poorest in society. A calm and peaceful country is a country more likely to attract more visitors and those we need to fill the beds in our lodges and camps in the safari parks and the hotels and make up for the loss of spending by government.

Watch this space.