Uganda's Planned 2008/09 Budget Faces Maiden Test
Said to be Uganda's last budget before the exploitation of oil in Uganda.
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First published: June 11, 2008
As Finance Minister prepares to read the National Budget for 2008/2009, Civil Society organizations have asked government to show seriousness that the budget this time round will contribute significantly to poverty reduction in the country.
Civil society organizations meeting in Kampala last month expressed concern that while more than 35% of Ugandans still live in abject poverty, this year's national budget framework paper shows that security and administration will take a sizeable share of the national budget as opposed to other productive sectors like agriculture, education, health, energy and roads. The later are sectors, which when properly invested in, help in creating jobs and improving household incomes, and thus contributing to poverty reduction.
According to the framework paper for the 2008/09 National Budget the government has made the following National budgetary allocation for the various sectors.
Security (from Shs443.2b to Shs453.2b), Works and Transport (Shs289.9b to Shs705.1b), Agriculture (Shs116.8b to Shs239.2b) and Education (Shs767.1b to Shs902.6b). Others: Health (Shs428.3b to Shs480.5b), Justice/ Law and Order (Shs234.6b to Shs242.2b), Accountability (Shs336.2 to Shs422.8b), Energy and Mineral Development (Shs449.3b to Shs464.1b).
While there was a general increase in allocation in all sectors of the economy, civil society groups were concerned that public administrations continue to consume most of the budgetary allocations. Some say the government is still putting more emphasis on building the army and security, even when there is no war in Uganda right now, at the expense of promoting more and improved agricultural production. The government for example will spend 453.2 billion shillings on security, while only 239.2 billion shillings will be spent on agriculture.
There is also widespread concern that this year's budget should come with some relief for Ugandans. The 2008/09 budget is unique because it comes at a very critical time when the prices of essential commodities like fuel, salt, food items like matooke, beans, rice have more than doubled. As a result of high prices of essential commodities, inflation rates have increased from 7.5% in February to 8.1% in March this year according to Uganda National Bureau of statistics.
This means more Ugandans are unable to afford basic needs like food, especially those living in abject poverty. The latest household survey for 2005/06 by Uganda Bureau of Statistics puts the number of Ugandans living in abject poverty to nine million up from eight million.
Analysts blame poor government interventions especially in allocating resources to promoting activities that increase household incomes like agriculture.
In Uganda agriculture employs over 80 percent of the population, but according to the recent national budget framework paper, it is still one of the least funded sectors of the economy at 239 billion compared to security at 453.2 billion shillings.
The government is however convinced that it is doing the best and that this year's budget will provide the best medicine to the economic ailments dodging many Ugandans. The Minister of Finance Dr. Ezra Suruma told the Budget Committee of Parliament on May 8 that the coming budget (2008/09) will reduce poverty and the inflationary rates in the country.
He says the 2008/09 budget will enhance economic growth and increase household incomes countrywide by allocating additional resources to sectors, which create jobs like education, agriculture, construction of roads and hospitals among others.
However, by last month, Julius Kapwepwe of the Civil Society Budget Advocacy Group (CSBAG), had insisted that the proposed budget will not spur economic development as Dr. Suruma believes.
"The 2008/09 budget should not excite our people because in a budget where over 70 per cent is earmarked for consumption expenditure, there should be nothing to celebrate," Kapwepwe said. "With this kind of budget, the economy cannot grow and therefore people will never get jobs. This is pretence by government to hoodwink the poor that something is being done to create employment for them," Kapwepwe added.
CSBAG also blamed the government for putting much attention on creating so many districts (now standing at 80), which are accompanied with high administrative costs, rather than boosting production so as to improve household incomes of the rural poor according to Elly Mwine.
Mwine, while presenting a CSBAG paper recently also criticized the government for investing a lot of money in security (the Ministry of Defense is allocated the biggest share of the national budget) rather than the 'key' ministries, which help to improve people's livelihoods like health, agriculture, works, transport and health among others.
The paper also said that the budget does not put measures to reduce corruption in form of increased funding to agencies which are fighting corruption like the Inspectorate of government, Directorate of Public prosecutions and the police among others.
The paper added that corruption is responsible for increased poverty in the country since most of the money meant for programs aimed at improving household incomes like National Agricultural Advisory Services (NAADS) is swindled by government officials.
Recently the Directorate of Public Prosecution (DPP) told parliament that it had no funds to investigate and prosecute people implicated in the mismanagement of the Global Fund who included the 3 former ministers of health Jim Muhwezi, Dr. Alex Kamugisha and Mike Mukula.
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The Deputy DPP, Amos Ngolobe, told MPs on the budget committee recently that out of the 960 million shillings required, only 200 million shillings was provided for in the budget.
The World Bank in a recent report says corruption is responsible for the loss of over 500 billion shillings every year of public money in Uganda. In a recent controversial anti-corruption letter to MP's and other senior politicians, President Yoweri Museveni also condemned corruption where officials, especially in the road sector, connive with contractors to inflate tender award costs.
Some politicians like the chairperson of the local government committee and Bubulo MP, George William Wopuwa, notes that the budget will indeed reduce poverty levels in the country because over 239 billion shillings has been earmarked for agriculture for the 2008/09 financial year. He told the pre-budget stakeholders meeting that this is a significant increase from last year's 202billion shillings.
Wopuwa, also praised the minister for allocating 451 billion shillings and 189 billion shillings for the Universal Primary Education and Universal Secondary Education.
But many are skeptical of Suruma's 'miracle' that the coming budget will reduce unemployment, poverty and the inflation rates when the key sectors responsible for increasing production and reducing poverty, like agriculture, are receiving little funding.
The Rubanda East MP (NRM) Pereza Ahabwe notes that the coming budget will derail the anticipated economic progress because it will not create employment.
Quoting highlights in the Budget Framework Paper 2008/09, Ahabwe who is also the Chairperson of Tourism Trade and Industry in Parliament noted that allocation for Ministry of Tourism, Trade and Industry which though critical for export-led growth has been badly cut from 41.7 billion shillings to 24.87 billion shillings.
Yet, according to the 2008/09-budget framework paper the total projected government expenditure is about 5.168.7 trillion shillings up from 4.754.6 trillion shillings in 2007/08.
Some members of the opposition say that while the government is indicating increased investment in relevant sectors like education, agriculture and health, the government might not implement the budget to the benefit of the ordinary Ugandans.
The chairperson of the Local governments Accounts Committee, Geoffrey Ekanya told journalists recently that many things like setting up of industrial parks and power extension to rural areas have been promised in the previous budgets but nothing has been done and "no body knows where the money goes."
To address rampant unemployment and poverty, the government had promised to start the Bonna Baggagawale (Prosperity for All) scheme in 2006/07, which would have seen people access low interest credit to pursue economic activities, especially in the agricultural sector. But to-date there is no policy framework to see it through.
So we can only but wait to see how Suruma incorporates the concerns so far raised on his planned budget when he reads the 2008/2009 national budget in mid June 2008.
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First published: June 11, 2008
Solomon Akugizibwe is a senior journalist with Ultimate Media Consult in Kampala . He has since 2006 worked as a reporter, information officer for an NGO before embarking on fulltime journalism practice at Ultimate Media Consult.