2020/21 Budget: Uganda Gov’t Under Fire as Security, Roads Take Lion’s Share Amid COVID-19 Pandemic

The Ugandan government will continue to spend heavily on infrastructure development and national security as pressure mounts on authorities to take into serious consideration the negative impact caused by Coronavirus, Chimp Corps report.

Parliament this past Friday passed a Shs 45 trillion budget for the next financial year 2020/21.

The budget which saw an increment of over Shs 6 trillion from the 2019/2020 budget was passed at a sitting chaired by Speaker Rebecca Kadaga following debate on the budgetary allocations where MPs called for interventions in the health sector amid the current corona virus pandemic.

The debate followed the adoption of the Budget Committee report which recommended that government revises and reviews the Budget after the full effect of Covid-19 on the economy is ascertained.

According to the sector allocations, Works and Transport takes an allocation of shs5.84 trillion followed by Security with an allocation of shs4.504 trillion.

Interest payments will take shs4 trillion, Education shs3.6 trillion, Health sector budget is shs2.7 trillion while the Agriculture sector gets shs1.324 trillion.

The budget is expected to be funded by resources from domestic revenue amounting to shs21.7 trillion and domestic borrowing shs3.55 trillion.

Energy and Mineral Development takes shs2.6 trillion.

COVID-19 Impact

The Civil Society Budget Advocacy Group (CSBAG) last week said the fact that FY2020/21 budget will be implemented when the country and the globe are dealing with the devastating effects of the COVID-19 pandemic, especially on the economy, it is prudent for Government to adopt austerity measures to effectively utilize the limited public resources, with major focus productive sectors of the economy such as agriculture, trade and Industry, tourism, health, education and social development that will help in revamping the economy and the lives of citizens.

“It is not clear how Government is set to address aspirations under NDPIII and effects of the COVID19 pandemic as a review of the FY2020/21 Ministerial Policy Statements, reveals the budget structure has remained virtually the same only reflecting increases for the usual budget items despite the country planning to shift from NDPII to NDPIII and to address effects of the COVID19 pandemic,” said CSBAG.

“Furthermore, the expenditures on consumptive items are just increasing despite Government resolve to cut wasteful expenditures.”

COVID-19 disruptions unearthed the need for Government to intensify investments in the technology and innovation within the Education Sector to guarantee the right to education for all.

“Education Sector, besides its usual strategies, should invest more in access to education materials especially for rural schools, community schooling innovations, strengthen collaboration with NITA for cheap and affordable internet, collaboration with the Ministry of Energy for cheap and affordable renewable energy sources for schools in the rural areas that cannot access a central grid,” said CSBAG.

Government gets an estimated 32% of the total tax revenues from manufacturing sector, which has been greatly affected by the COVID-19 disruptions.

The Civil Society argued that measures such as setting import substitution industries, more common user facilities to promote development of MSMEs need to be adopted to cushion the economy from the current and any future shocks that may disrupt global trade.

Government was also told to recapitalize the Uganda Development Bank and the Microfinance Support Centre to allow local manufacturers access cheap credit needed to establish and boost domestic production.

Figures

The budget which will come into effect on 1st July 2020 is an increase of 12.36 per cent compared to the approved resource envelope for the current financial year 2019/2020.

Parliament’s Budget Committee Chairperson Amos Lugoloobi reported to parliament after considering the figures under the Appropriation Bill, 2020.

According to Parliament’s Budget Committee Chairperson, the total Domestic resources financing the coming financial year budget will constitute 72.5 percent while external funding will constitute 27.5 percent.

Lugoloobi cites need for Government to strengthen the mobilization and collection of revenues, which have stagnated below 16% of Gross Domestic Product (GDP) for the past years.

The Minister for Finance, Hon. Matia Kasaija put Parliament on notice that he would come back for any reviews in the Budget since it has been considered under the unclear circumstances of the corona virus pandemic.

According to the Public Finance Management Act (PFMA), 2015, Parliament is mandated to approve the National Budget by 31st May.