By Frank Kamuntu
Civil Society Organizations under their umbrella, the Civil Society Budget Advocacy Group (CSBAG) today held a presser to share perspectives on the approved budget estimates for FY 2023/24, which were tabled and passed in Parliament on Thursday 18th May 2023 in accordance with Section 9 (3) of the Public Finance Management Act, 2015 (Amended).
Parliament approved the national budget for the FY 2023/24 amounting to a total of UGX 52.73 trillion representing a 16% increase in the last three years from UGX 59 trillion in 2020/21.
According to Finance Ministry, the increase is a result of a projected increase in domestic resource mobilization from UGX 55 Trillion in FY 2022/2023 to UGX 29.67 trillion (URA 27.42 tn and NTR 2.24 tn) next financial year; and Increase in external borrowing, from UGX 6.72 trillion this financial year to UGX 8.25 trillion next financial year and also an ncrease in Domestic Refinancing (Rollover), from UGX 8.01 trillion in FY 2022/23.
CSBAG Executive Director. Mr.Julius Mukunda alerted government about the escalating public debt saying currently the country’s public debt stock has significantly increased from UGX 9 trillion in FY 2018/19 to UGX 86.6 trillion3 in FY 2023/24 representing a 180% growth, of which domestic debt was UGX 38.1 trillion and external UGX 48.5 trillion.
”A re-computation of Uganda’s debt to GDP revealed consistence in growth over the period of five years from 31% in June 2017 to 52% in June 20224. Seventy five percent (75%) of the current external debt is concessional and the balance non-concessional although by the end of December 2022 the non-concessional debt had increased from 21% recorded in June 2022 to 25% by the end of December 2022,” said Mukunda.
He added, ”Furthermore, the proportion of domestic revenue that goes into servicing debt has been overwhelmingly breached. It has been noted that 24.1% of the revenue being collected is going into servicing debt against a benchmark of less than 12.5%. this cripples government’s capacity to deliver services such as the deteriorated state of roads in Kampala and other parts of the country. It should also be noted that government in the last financial year used commercial loans to a tune of UGX 4.5 trillion for recurrent expenditure (Wage and Administration).”
He also cautioned about domestic arrears that have increased from UGX 4.65 trillion in 2021 to UGX 7.55 trillion in 2022 (62% increase) despite the existence of The Strategy to Clear and Prevent Domestic Arrears June 2021.
”For the next financial year government has allocated only UGX 205 billion for domestic arrears. This inability to pay back debt has suffocated the private sector and shows that that government’s controls system has failed. We demand that government enforces fiscal disciplinary by reprimanding errant accounting officers and at the same time set aside adequate resources in the domestic arrears budget to clear the current stock of domestic arrears over the medium,” added Mukunda.
Food Rights Alliance (FRA) ED Ms Agnes Kirabo’s concern is on the removal of the extension grant at Local Government which says is a set back to all the Agro-industrialisation agenda.
”You can’t expect quality when you don’t see value in the extension workers. Their role is critical in assisting our farmers and now that you have stopped funding them, expect Kenya to ban more of our agriculture products but also be prepared for hunger crisis in this country,” Ms Agnes warned.
On his part, Eceru Peter, a coordinator at Center for Health, Human Rights and Development (CEHURB) says the budget is so dormant on matters of health with a drop in allocation for blood collection, processing and distribution.
”We are concerned that funding for blood collection will drop from 23 Bn in the FY 2022/23 to UGX 21Bn in FY 2023/24. The implication is that government will not be able to cover a deficit of 150,000 units of blood need in the current allocation can only enable Uganda Blood Transfusion Services to collect 300,000 units of blood against the need of 450 units. It is also important to note that 41% of maternal deaths are associated with hemorrhage and inability to collect, process, and distribute blood means that more mother will not be able to access blood, resulting into death,” said Eceru.
He also said there is limited allocation to essential medicines noting that in FY 2023/24 National Medical Stores is project to receive UGX 581 billion for the procurement of essential medicine.
”While this represents an increase in budget allocation to essential medicines, this is way below the projected essential medicines need of UGX 782 Bn shillings. The funding gap of UGX 201 billion shillings means that cases of drug stock outs in public health facilities will persist and, in some cases, get even worse. Laboratory reagents and SRHR commodities continue to be hugely underfunded. The Ministry of Health indicates that drug stock outs is the biggest challenges in terms of functionalization of health service delivery in Uganda,” said Eceru adding;
”Investing in a well functioning healthcare system is not just imperative for the welfare of a nation but is also a significant contributor to its prosperity. It’s impossible to achieve wealth creation without a well functioning healthcare system.”
Meanwhile, below are some of the allocations in the recently passed budget.
1. Wealth creation funds account for a combined total of UGX 146 tn (for 10,594 SACCOs under the Parish Development Model; UGX 100bn for 6,700 SACCOS under Emyooga program and UGX 46bn for other SACCOS under the Microfinance Support Centre).
2. Education: UGX 1 trillion was allocated to 12 government universities, UGX 2 billion for UNEB to conduct and supervise national exams, and UGX 13.39 billion for National Council for Higher Education to guide and establish standards of Higher Education Institutions.
3. Health: UGX 1.225 trillion was allocated to 27 Regional Referral Hospitals to improve health service delivery.
4. Agriculture: Agricultural research financing In order to promote agricultural research in Uganda, the Government has allocated UGX 6 billion to National Agricultural Research Organisation. Diary Development. In order to enhance diary value addition and quality for increased market competitiveness, the government has allocated UGX 17.62 billion the Diary Development Authority
5. Works and transport: As part of improving the national road network, UGX 2.475 trillion was allocated to Uganda National Roads Authority (UNRA). Furthermore, UGX 401.2 billion was allocated to Uganda Road Fund for improving District Urban and Community Access Roads.
6. Water and Environment- As part of improving management of the environment and natural resources, the government has allocated UGX 56 billion to National Environmental Management Authority (NEMA).
7. Local Government Financing: The budget for Local governments (including districts, cities, and municipal councils) for the next financial year is UGX 5,279,399,382 representing 10% of the national budget, of which 154tn (78.1%) is recurrent and UGX 1.124tn (21.3%) is Development. While this is up from UGX5.1 trillion in FY 2022/23. This figure is meagre and undermines the spirit of decentralization.
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