Abstract

David Kibikyo.

The study investigates the fiscal impact of privatization in Uganda by looking at subsidies as expenditure and taxes from privatised State owned enterprises (PSOEs) as well as sale proceeds from divestiture as revenue. Using mostly documentary evidence from government official and 31 previously state owned enterprises (PSOEs) records, the findings reveal a mixed fiscal impact of privatization. Privatisation left the subsidies more or less the same. Subsidies in nominal prices were constant from 1992/1993 to 2004/2005 period. In today's Uganda, however, there was no link between subsidies and the central government budget. On the contrary, taxation from PSOEs increased four times as a result of increased business particularly in industry that increased 7 times while trade and services doubled. But Privatisation failed to achieve the expected sales proceeds target of US $500 million target set by World Bank, managing only US$172 million by end of June 2006 due to asset undervaluation and stripping.