When the Ministry of Finance tabled the Budget Framework Paper (BFP) for the Financial Year 2021/2022, there was one item that raised alarms with most of the Members of Parliament sitting on the Budget Committee.
It was an item concerning plans by the government to inject UGX481 billion into the Bank of Uganda as a recapitalization fund. However, while appearing before the MPs, the Bank of Uganda, Deputy Governor, Michael Atingi-Ego said that the Central Bank did not need the money as their capital base was not impaired.
“The procedure for recapitalization is that once the audited accounts for any financial year have been finalized, then the level of capital is determined…whether the capital is impaired or not. Should the capital be impaired, then it is only at such a point when Bank of Uganda requests the Ministry of Finance to present to parliament a request for recapitalization,” Atingi-Ego told Parliament in January this year.
Following the refutation by the Central Bank, MPs demanded that the Ministry of Finance revise the budget downwards by UGX481 billion to save taxpayers’ money from being allocated to an activity that has not been planned for by the would-be benefiting entity.
Today, Finance Minister Matia Kasaija revealed that the item has been removed from the final budget document that is before Parliament. He was appearing before the Budget Committee which is working on the final appropriations for the next financial year.
Kasaija came with a budget that has been revised downwards by UGX4.56 trillion from the UGX45.65 trillion in the BFP to now UGX41.3 trillion.
“The Bank of Uganda recapitalization has been removed both from the resource side as well as from the expenditure side of the budget,” Kasaija stated while presenting to the Budget Committee.
Speaking after the committee meeting, Butambala County MP Muwanga Kivumbi described this as a “score” on the side of the committee because they have managed to save the UGX481 billion from being ‘stolen’ from the taxpayers.
Diageo to Exit East African Breweries as Asahi Takes ControlKivumbi said that this achievement calls for more keen scrutiny of all budgets being proposed by the government because there is a lot of money that is hidden in different sector allocations.
“It calls for more vigilance on the budget by all the MPs who get a chance to study these documents. We can arrest some of these expenses and save money,” Kivumbi said.
Fond of writing minority reports from the Budget Committee, Kivumbi told CEO East Africa Magazine that it is always bad for the MPs to approve all allocations in budgets and their supplementary budgets without subjecting the figures to proper interrogation.
Just on Monday, Kivumbi said that UGX200 billion had been added to the budgets of some of the government programmes away from what had been initially approved in the BFP.
This is one of the reasons the Minister of Finance, Kasaija and his team were sent back to align their budget with the government’s National Development (NDP) III as well as the approved BFP.
“Just by reading through the Minister’s statement and comparing it with the Budget Framework Paper, I realized they had added another UGX100 billion to the budget of security and another UGX100 billion to regional development,” Kivumbi told this reporter.
The finance ministry has since realigned the figures for the two sectors, thereby increasing allocations to the security and governance sector from UGX7.6 trillion to UGX7.721 trillion and that of regional development by UGX100 billion to UGX1.215 trillion.
