By Prof. Vicent Bagire
A financial year of government is crowned by the President giving the state of the nation address, in which he gives the accountability to the people on resources that were entrusted to him. He also outlines priorities for the coming year and presents to the nation, financial estimates for the subsequent year.
On his behalf, the person holding the portfolio of minister of finance, planning and economic development prepares and submits to parliament by end of May the budget that the president subsequently presents to the nation. All government ministries and agencies are expected to have their proposals passed by that time. This process is called budget appropriation and only done by parliament. In unison with other East African countries, the president then presents the appropriated budget to the nation. The New Year starts on July 01. Recently, the budget for the financial year 2023/2024 was presented. The budget theme is full monetization of the Uganda economy, commercialization of agriculture, industrialization, market access and digital transformation.
THE BUDGET AT A GLANCE
The budget total is 52.7 Trillion shillings. It will be raised through both national resources, domestic borrowing and external support. The government hopes to raise 29.7 trillion from taxes by Uganda Revenue Authority’s efforts. Together with other domestic sources, government wishes to finance the budget to the tune of 79.8%. In terms of allocations, defense and security have the highest portion of 3.8 Trillion; followed by roads sector with 2.4T, financing government operations is also 2.4T. Health, Energy and Environment all rise to over a trillion slice. Agriculture has been allocated 2.2T to cater for Food Security, Climate Change, Value Addition, Research and Diseases Control. Other sectors and institutions are in billions of allocations.
WHAT ARE THE CONCERNS?
This year’s budget raised both excitement, worry and complacence. There are voices who are excited that it is a pro-people budget and will boost household income and employment. The allocations to agriculture, likely reduction in fuel and easing the borrowing from micro financial institutions point to this direction. However, having on concrete commitment to salary revisions, more allocations to none production sectors and the likely vice of corruption in the government system leaves many stuck to the past that it is business as usual for government. There are those that are indeed worried that with the global trends, the average Ugandan will remain poor and unable to meet basic needs. The key concerns to highlight among others are:
External borrowing – the government is currently chocking with over 80T external debt. And in recent times, more borrowing has been done. Today, the external debt ratio is at 48.7%. This means that for every 100 shillings we earn as a country, close to half is committed to debts. The national policy is that government commits 25 – 30% revenues to debt repayment. In his address after reading the budget, the president had no kind words for technocrats who keep committing the country to borrowing. He castigated the country to consider living on our own level and minimize further borrowing. Analysts await to see how this will become a lasting commitment.
Misappropriation of budgets – while the budget is read and allocations are made, the public concern is how much will actually go to service delivery. This fear is founded on past experiences, where billions are wrongly allocated to expenses than services. This is coupled with the vice of corruption in the government system, hence rendering economic transformation untenable.
The Parish development model – PDM will continue to be a key highlight of the budget. Each parish is expected to receive 100billion; by the day of budget speech, over half of that commitment had been allocated to 10,459 parishes, totaling to 590.2billion. This initiative is expected to spur rural economic transformation and improve household income. The other schemes of rural financing like emyooga will continue to boost household incomes. Access to international markets – to make sense of economic transformation, the government wishes to increase foreign exchange earnings. This will enable a balanced score on payments for imports against the export potential of the economy.
Agricultural industrialization – the budget targets directly to boost agro production for export. The key words are value addition, quality, agro exports and commercialization. Activities will include; agricultural research, environmental conservation; construction of irrigation schemes, large scale mechanization and mobilization of farmers education. Some analysts however feel that government has not done enough to this very critical sector in terms of not only budget allocations but narrative commitments as well.
Digital transformation – the government wishes to invest in technology to improve efficiency and move into the fifth industrial revolution. The budget highlights that 4171km of cables have been laid countrywide. The government announced that free Wifi connections will be made to markets, schools and health facilities. 192billion has been set aside for this. Analysts wondered however that many Ugandans are still connected to the 3D while the rest of the world is moving into the 5D tech level.
Covid-19 recovery –This budget highlights the commitment government made to small firms to support them in the post Covid era. Many are still struggling and activists are not happy with what government promised through Uganda Development Bank that has not helped much. 209.3b has been announced to support SMEs in the manufacturing and export.
Revenue Mobilization –This year, government will realize a target of 29.7 trillion from Ugandans in form of taxes. Of this, none tax revenue is estimated at 2.3T. Uganda Revenue Authority has been put on alert to close all loop holes of tax evasion, avoidance and leakages. New policy revisions have been made to support URA’s work. All efforts were announced to ensure that tax obligations are abided with. Other sources will include; domestic borrowing of 3.2T and budget support estimated at 2.3T external sourcing for projects will be 8.3T and appropriation in aid and collateral financing.
RESTRICTIONS
This financial year, there shall be no purchase of new vehicles for political leaders. Secondly, travel abroad by government officials has also been capped. And external borrowing will be restricted with the approval being sought from the president.
TAKE HOME FOR CHRISTIAN LEADERS
Catholic leadership through our structures should emphasis production. We should let our people take active presence in income generating activities and preach against the vices of corruption and ineptitude among the catholic laity. Let us be the light to shine out there in civil service and private sector. The Church looks ahead to well living laity from whom support to her pastoral and social being is financed locally. There are many projects across the country to support income among the small Christian communities.
Let our people be urged to be social economic change agents. Let us begin with ourselves as Christian leaders. Annually and in time, the government draws and presents the budget. They present accountability. The office of auditor general checks all books of government departments and agencies. How much do we learn? Have all treasurers of parishes, deaneries, associations and movements presented annual budgets? Are they monitoring expenditure and income? Are they presenting periodical statements? Are the chair persons giving “state of the nation” addresses to the Christian communities? Let this budget commitment by government draw to us lessons to improve our fiduciary management in the Church. We shall not point red fingers to government in the crowd of others if we are not doing much better.
The Author is a member of the Episcopal Commission for the Laity and a Professor of Management at Makerere University Business School.
