Parliament of Uganda, sitting on April 24th 2020, passed the Appropriation Bill 2020, approving UGX45.5 trillion budget for the next Financial Year- 2020/2021.
This is a 12.3% increase from last year’s UGX40.5 trillion.
This was after the finance Minister Matia Kasaija moved a motion for the House to constitute itself into a committee of supply to consider revised expenditure estimates for fiscal year 2018/19 and budgetary proposals for estimates of revenue and expenditure for FY 2020/2021.
According to the Appropriation Bill, UGX11.9 trillion is allocated to recurrent expenditure, UGX18.076 trillion for Development expenditure and UGX5.494 trillion for statutory expenditure.
72.5% of the budget will be raised locally while external funding will constitute 27.5%.
Although the works and transport sector is having its sectoral budget reduced from UGX6.4 trillion to UGX5.8 trillion, thus reducing its portion of the budget from 19.6% to 12.85%, it still takes the lion’s share of the budget.
Security which takes the second biggest share, got an extra UGX1.64 trillion, most likely taking into consideration the elections of 2020/21.
Interest payments for Uganda’s burgeoning debt takes the third largest chunk- UGX4.1 trillion, up from UGX3.1 trillion. Education, also got a boost from UGX3.4 trillion to UGX4 trillion next year, as well as health- from UGX2.6 trillion to UGX2.8 trillion.
The House has passed the Appropriation Bill,2020 at Bills Third Reading. This is the last stage of the Budget Process. The total budget for the budget of the financial year 2020/2021 is shs45.5 trillion covering recurrent, development and statutory expenditures #PlenaryUg pic.twitter.com/n5B4JFHuor
— Parliament of Uganda (@Parliament_Ug) April 24, 2020
Letters to My Younger Self: What Uganda’s CEOs and Professionals Wish They Knew at the StartEnergy and Mineral Development, took a UGX400 billion cut on its budget, from UGX3 trillion to UGX2.6 trillion as the Karuma Dam comes to completion. Agriculture got a UGX300 billion increment from UGX1.1 trillion to UGX1.32 trillion- an increment that MPs said was not enough for the job at hand and given the strategic importance of the sector.
However, the government has consistently argued that by allocating money to other enabling sectors such as transport and education, the government is indirectly contributing to agriculture.
Tourism, the leading income earner for Uganda- USD1.6 billion last year, only got a paltry UGX198 billion, up from UGX193.7 billion.
Observations by the parliamentary budget committee
According to the Parliamentary Budget Committee’s report to parliament, total revenue as a ratio to GDP is projected to increase marginally from 13.4% in FY2019/2020 to 13.9% in FY 2O2O/21. The committee, however, expressed concerns that total Domestic Revenue (inclusive of Local Government Revenue) in the FY 2020/21 is just 48.2% of the total resource envelope.
The committee recommended that the government needs to prioritise strengthening revenue mobilization as well as the collection of its revenues, which have stagnated at below 16% of GDP for the past years.
MPs also recommended that the government reviews and revises the National Budget for the financial year 2020/2021 after the full effect of the COVID-19 on the economy are ascertained.
The MPs also proposed that the government halts all wasteful expenditures such as workshops, travel abroad and entertainment among other luxurious expenditures so as to save resources for an economic stimulus package to kick start the country post-Covid-19.
