Government Halves Non-Essential Spending as Shilling Hits 33-Year Low

In response to severe currency depreciation, the Ugandan government has ordered all Ministries, Departments, and Agencies (MDAs) to slash their non-essential expenditure by 50 percent. The sweeping fiscal austerity measures target major operational costs, including fuel consumption, official travel, workshops, and general consumables.

This policy shift comes on the heels of a dramatic decline in the Ugandan Shilling. By the close of business on Friday, the local unit breached the Shs4,400 mark against the US dollar on official Bank of Uganda counters. Market volatility during intra-day trading even pushed the currency down to touch the critical Shs4,500 threshold.

Financial analysts have highlighted the gravity of the situation. Mr Stephen Kaboyo, a partner at Alpha Capital Partners, confirmed that the sharp slide represents the weakest performance recorded by the Ugandan currency in 33 years, tracing the last comparable vulnerability back to 1993.

The directive to curb expenditures is part of broader efforts by authorities to stabilize the macro-economic environment and restore confidence in the local currency amidst mounting external pressures.

For more details on this developing story, read the original report on Daily Monitor.