By Patrick Jaramogi
Kampala, Uganda: Although government had made it clear that Uganda would become a lower middle income status by 2020, this seems a far-fetched dream, the Civil Society has disclosed.
With just a year to go, to achieve what the President said would be a middle income status where all Ugandans per capital income ranges to the tune of USD$1045, the CSOs under their umbrella body of the Civil Society Budget Advocacy Group, (CSBAG) have lashed out at government for reducing budget cuts on key sectors. Addressing the fourth estate at their Ntinda based offices in Kampala on Sunday, the CSBAG Executive Director, Julius Makunda said: “Right now is not a question of how much money we have, but how we allocate and spend.” He observed that the economy had grown at an average of 4.9% from 2015/16 to below 7% in the year 2017/18, far below the NDP (National Development Plan) II target. “The budget of the FY 2019/20 also comes at a time when the capacity of the Central Bank as a supervisor of financial institutions and a regulator of monetary policy is highly questionable and under scrutiny,” he said.
What’s at stake?
The budget for the FY 2019/20 has increased by 4.9% to UGX 34,304,70b from UGX32,702.82bn. however the CSOs observed with great worries that out of this, only 66% (UGX22,631bn) has been allocated by government for spending. Sadly, again, government will only spend UGX12,696bn on development, representing 37% of the total budget. The rest of the resources will be channeled towards debt repayment
Budget Cuts On Key Priority Areas
The year 2019/20 will see a reduction on the budget allocation to Health, Education, social development, water, agriculture and environment. Government has in the National Budget Framework Paper reduced the budget to these sectors by 12%, from UGX 7,747 billion TO UGX6, 810 billion. The good news though, is that the domestic revenues is set to increase by 12.3% to UGX18,375 bn from the previous UGX16,358.8bn. The worrying aspect, observed Julius Kapwepwe Mishambi, the Director Programs at Uganda Debt Network is that Uganda’s borrowing budget is set to increase to USD$ 1.6billion. “We call upon government to fast track the development of the Medium- Term Revenue Strategy, but to also present tax measures from which extra tax revenue for the year 2019/20 will be generated from,” said Kapwepwe. Currently the country’s total public debt stock as at end of 2018 stood at USD$ 10.7 billion, equivalent to UGX41.326.1 billion, which is equivalent to 41/5% of the GDP.
Reduced Budgets On Expected Natural Disasters
Ugandans should brace themselves for tougher times should disasters like floods, landslides and others continue to strike in the year 2019/20. The CSOs observed with concern that despite being aware that the country is prone to natural disasters like landslides and persistent floods, budget allocation towards financing disaster risk and mitigation programs has been slashed to nearly 50% from UGX80.246 billon to UGX43.647 billion. “A reduction of 45.6% is a contradiction to the budget strategy and measures suggested,” noted Makunda from CSBAG.
