Uganda’s Ministry of Finance, Planning and Economic Development (MoFPED) has trimmed down government planned expenditure for the Financial Year 2021/22 by at least UGX4.36 trillion, indicating anticipated failure to meet its revenue targets on an already shoestring budget.
Initially in the Budget Framework Paper (BFP), laid before Parliament, government anticipated a resource envelope of UGX45.66 trillion, which was a few billions shy of the UGX45.49 trillion allocated for FY2020/21.
The year before, the budget was increased by some UGX5.85 trillion, up from UGX39.64 trillion in 2019/20.
The revised budget presented today by the Finance Minister Matia Kasaija to the Parliamentary Budget Committee showed that Government is now planning to spend UGX41.3 trillion.
“The changes in the budget are on account of an increase in the projections for domestic revenues, funding from the petroleum fund, reduction in domestic financing, reduction in external financing and reduction in budget support financing,” Mr Kasaija told MPs.
The dent is largely due to a reduction in anticipated external refinancing of budget support section by UGX4.58 trillion from UGX8.57 trillion to now an estimated UGX3.98 trillion. The budget support funds are also expected to decrease from the earlier projected UGX3.6 trillion to UGX3.5 trillion.
The budget for refinancing domestic debt, however, remains untouched at UGX8.54 trillion for domestic refinancing.
To finance part of the budget gaps, government will raid the Petroleum Fund for at least UGX200 billion to help in the implementation of infrastructure projects in the coming Financial Year.
Mr Patrick Ochailap, the Deputy Secretary to the Treasury, said that this money will be spent on the construction works for oil roads in Bunyoro sub-region.
On a positive note though, Kasaija told MPs that government was expecting an increment in domestic revenues from the previous projection of UGX21.6 trillion as per the BFP to UGX22.4 trillion, adding a further UGX729.2 billion to the national kitty.
Where is the money going?
The security and governance sector will take the lion’s share of the new budget with a proposed allocation of UGX7.72 trillion, representing 30 percent of the total resource envelope.
Human capital development will take UGX6.83 trillion (26.9 percent) and the transport sector UGX3.98 trillion, representing 15 percent.
Other sectors allocated at least over UGX1 billion, include agriculture (UGX1.410 trillion); regional development (UGX1.215 trillion); and, development plan implementation at UGX1.099 trillion.
Letters to My Younger Self: What Uganda’s CEOs and Professionals Wish They Knew at the StartMembers of Parliament led by Committee Chairman, Amos Lugolobi, the MP of Ntenjeru South, questioned the continuous allocation of the lion’s share of the budget to security at the time when the country is stable.
Lugolobi said that it is not reasonable for the government to inject the biggest share of the budget into security when the country has no threats at all.
“The governance and security sector is taking a lion’s share though they seem to be protecting what is not expanding. You don’t spend a billion shillings on securing an empty house. You provide too much security and governance when you are trying to protect a very minimal threat,” Mr Lugolobi said.
He said that in the current financial year alone, Parliament has approved a supplementary budget in form of classified expenditure worth over UGX1 trillion going to the security sector.
Butambala County MP Muwanga Kivumbi who also sits on the classified expenditure sub-committee, blamed the government for continuing to procure military hardware with an intent of suppressing the opposition, warning that the jobless Ugandans may even cause insecurity if more jobs are not secured instead.
“The budget of the ministry of defense always increases and this increment is in classified expenditure. It is the economy that will anchor security but not the other way round. These planes and sophisticated gadgets for spying that you are buying when the youth are not employed, they will riot and spoil the economy,” said Kivumbi.
Only one MP, Col Fred Mwesigye of Nyabushoozi County supported the big allocation to security saying the government cannot sit down when Uganda’s neighbours are not stable. He gave the example of insecurity in eastern Democratic Republic of Congo and in South Sudan as key indicators that the Ugandan territory may not be spared hence a need to invest in security.
Security before economy?
Minister Kasaija defended the huge security budgets, saying that security comes before the economy in terms of priorities of a developing country like Uganda because the lives of the people and their property need to be secure.
“We want to make sure that people’s lives, property and the country are secure. You have no economy without security. Take it or leave it. I was here and saw what happened in 1971 and 1972. I was here earning UGX2000 from Shell and it was nothing without security,” the Minister added.
Speaking in support of his senior Minister, David Bahati the State Minister for planning said that the higher allocation to the security sector will end with the financial year 2022/2023.
The budget Committee however, advised the Minister and his team to go back and align the budget with the National Development Plan (NDP) III before they are able to approve the figures to be set to table in the House in a report.
Parliament has up to April 30 to have passed the budget of the 2021/2022 financial year as per the Public Finance Management Act. This means the committee which is resuming on Thursday to receive the aligned document from the Ministry has less than 10 days to have reported to the plenary sitting of the House.
