Ugandan Parliament approves UGX49.98 trillion 2023/24 budget proposals

The Ugandan Parliament on 31 January 2023 passed the Budget Framework Paper with proposals of to spend UGX49.98 trillion (USD13.6 billion) for the financial year 2023/2024.

The passing of the Budget Framework Paper is in line with the requirement of the Public Finance Management Act that sets 01 February as the deadline for Parliament to approve it.

The passing of the draft budget in a plenary sitting chaired by Deputy Speaker, Thomas Tayebwa on Tuesday, 31 January 2023, followed a debate by Members of Parliament on the Budget Committee of reports on the framework and the budget performance respectively. The approval is subject to the recommendations made by parliament.

The proposed budget will be financed through domestic revenue equivalent to UGX28.8 trillion, budget support amounting to UGX2.4 trillion, domestic borrowing of UGX1.6 trillion and external project support amounting to UGX8 trillion.

Other sources are domestic refinancing of UGX8.7 trillion and local revenue from local governments of UGX238.5 billion.

The government’s key priorities in the budget, include the start of construction of the Standard Gauge Railway and the finalization of the rehabilitation of the Meter Gauge Railway under the Integrated Transport programme.

The budget also focuses on investing in small-scale solar-powered irrigation as well as addressing climate change and food security under the agro-industrialization programme.

Other priorities include constructing power service stations and transmission lines under the Sustainable Energy Development Programme and capitalization of the Uganda Development Bank and Uganda Development Corporation to continue supporting private sector development, recovery and economic transformation under the Private Sector Development Programme.

During the debate of the draft budget, Kashonzi County Member of Parliament, Hon. Herbert Tayebwa warned against the high expenditure against government’s low revenue. He said that Uganda should only borrow for investment but not consumptive expenditures.

The Leader of the Opposition, Hon. Mathias Mpuuga said that the Budget Framework Paper is silent on high-interest rates on loans. He wondered how much the country was paying annually as debt repayment for Karuma Hydro Power Dam.

The Deputy Speaker, Thomas Tayebwa expressed worry about reducing discretionary expenditure despite the growth in revenue estimates. He also expressed worries over the growing national debt and its impact on other government priorities.
“For every UGX100 collected, over UGX37 is spent on servicing debts,” said Tayebwa.

The Deputy Chairperson of the Budget Committee, Hon. Wamakuyu Mudimi said that proposed budgets towards programmes that contribute directly to value addition were only 5.6 per cent of the total budget and that only 4.7 per cent of the total budget has been allocated to programmes that contribute towards strengthening the capacity of the private sector.

Following the approval of the draft budget, Government will now go ahead to revise the budget estimates based on Parliament’s recommendations and present final estimates to the House by 15 March 2023 for final approvals.