The non-governmental organisations call for strong anti-corruption measures and debt reduction
Civil Society Organisations (CSOs), under the umbrella of the Civil Society Budget Advocacy Group (CSBAG), have identified several opportunities in Uganda's new Shs72 trillion budget. They emphasize investments in human capital development, peace and security, infrastructure, wealth creation, and the maintenance of existing infrastructure. However, they urge the government to combat corruption and reduce debt to achieve meaningful results.
Speaking during a post-budget dialogue, CSBAG Executive Director Julius Mukunda highlighted the need for fiscal consolidation measures to tackle debt distress. These measures, he said, include increasing revenue, reallocating the budget, increasing concessional borrowing, and ensuring purposeful borrowing for productive infrastructure investments. Uganda's public debt stock has peaked at Shs97.4 trillion, nearing 50% of GDP.
Mukunda stressed the importance of expanding domestic revenue mobilization by ensuring that the Uganda Revenue Authority (URA) forms partnerships to streamline tax collection. The government is currently targeting a net revenue of Shs29.6 trillion for FY2023/24, but the actual net revenue collected at the close of the financial year stood at Shs21.8 trillion, signaling a possibility of not meeting the planned target.
Furthermore, CSOs want the government to improve public investment management to achieve the set targets in the new budget. A recent Public Investment Management Assessment (PIMA) by the International Monetary Fund shows that Uganda has improved its public investment performance among its peers in the region and sub-Saharan Africa. However, challenges remain. For instance, the Auditor General's report of 2023 found that the Uganda National Roads Authority and the Ministry of Works and Transport had outstanding payments to contractors amounting to Shs804 billion. Additionally, undisbursed funds for 28 sampled projects totaled Shs777 billion, and 27 projects cumulatively failed to absorb project funding amounting to Shs118 billion.
Mukunda emphasized that the government must conduct thorough project feasibility studies and ensure that all government spending agencies and local governments expedite their procurement processes to enhance the timely disbursement of funds. He also criticized the government's investments in risky ventures, such as the Shs120 billion Presidential Initiative on Banana, Shs312.45 billion invested in Kiira Motors Corporation, Shs553.71 billion in Atiak Sugar Factory, Shs475 billion in Lubowa Specialized Hospital, and Shs723 billion to DEI Pharmaceuticals. These investments, he said, have shown zero return yet continue to receive funding, jeopardizing the country's economic stability.
Mukunda also noted instances of irregular or unapproved expenditures, such as the controversial Parliamentary Commission Award of Shs1.7 billion, and high-profile corruption cases like the Mabati (Iron Sheets) scandal. According to the Inspector General of Government's report, the cost of corruption in Uganda is estimated at Shs9.144 trillion annually, compromising investment in key sectors like health and education, and negatively affecting service delivery.
The total resource envelope for FY2024/2025 amounts to Shs72 trillion, up from Shs52.7 trillion in FY2022/2023. Out of this, the total appropriation is Shs37.56 trillion, and statutory expenditure is Shs34.756 trillion.
Budget allocation
This development comes as domestic revenues are projected to be Shs31.9 trillion, with Shs29 trillion coming from tax revenue and Shs2.6 trillion from non-tax revenue for the next financial year. Additional sources include Shs1.3 trillion in budget support, Shs8.9 trillion in domestic borrowing, Shs7.7 trillion in treasury bonds for settlement of government outstanding obligations to the Bank of Uganda, Shs12 trillion in domestic refinancing of maturing domestic debt, Shs115.4 billion from the Petroleum Fund drawdown, Shs9.5 trillion in project support (external financing), and Shs293.9 billion from local government revenue collections.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Expenditures are projected as follows: wages and salaries at Shs7.926 trillion, non-wage recurrent expenditure at Shs17.454 trillion, development expenditure from own resources at Shs6.152 trillion, external project financing at Shs9.584 trillion, appropriation in aid at Shs293.9 billion, and external debt repayment at Shs3.149 trillion.
The new budget targets seven key priorities, including investing in people through education, health, water, sanitation, and hygiene, with a total allocation of Shs10.204 trillion. Peace and security are allocated Shs9.107 trillion, including a 25% enhancement of salaries for security personnel at the rank of Captain and below.
