BREAKING! Parliament approves sh45.6trillion draft budget

The Parliament of Uganda has approved the Budget Framework Paper (draft national budget) for the upcoming 2021/2022 financial year.

According to the figures that the Parliament budget committee vice-chairperson Patrick Isiagi Opolot read, the draft budget for the next financial year stands at sh45.6 trillion.

Out of the total budget of sh45.6 trillion, sh21.9 trillion will be realised from government revenue collections and the remaining balance of sh23.7 trillion will be mainly got from external and internal borrowing.

The committee noted with concern that increasingly, the biggest portion of the national budget, which now stands at 34.46%, goes towards debt repayment.

The committee indicated that sh8.5 trillion will be spent on debt repayment for domestic debts, sh1.8 trillion will be spent on repayment for external debts, sh496 trillion will be spent on interest payment and sh400b will be spent on paying domestic arrears to private companies that supplied goods and services to government.

“This has pushed government in a situation of borrowing money to be able to pay the old debts that are due for payment. It is not a desirable situation,” Opolot explained.

The committee raised a red flag on government pushing the budget for governance and security to over 22.4% of the national budget, which is way higher than the 14% which had been proposed in the third National Development Plan (NDPIII).

The governance and security programme budget is soaring mainly on account of government providing an additional sh1026b to the budget for classified expenditure for the security sector.

Considering that the classified budget for the current financial year had reached sh3.8 trillion after an additional sh1 trillion that came through a supplementary budget in the course of the financial year, it means that in the 2021/2022 national budget, classified expenditure budget for the security sector stands at sh4.8 trillion.

The other notable additional expenditure in the 2021/2022 is the proposal to allocate sh200b as compensation for cattle in Acholi, Lango and Teso. In the recent presidential campaigns, President Yoweri Museveni made pledges in that line.

Opolot, reading the committee recommendations, said there is need for government to allocate more resources towards production sectors, which have potential to improve the economic welfare of Ugandans.

The sectors/programmes that Parliament wants to be allocated more funds as government prepares revised budget estimates include agriculture, tourism, manufacturing, human capital development and skilling.

Arguing that the country’s economic growth needs to be more inclusive, the committee implored government to initiate ways of getting the 65% Ugandans in subsistence farming out of poverty.

The committee and Parliament, in general, rejected the proposal to borrow sh481b for capitalising Bank of Uganda, following reports from the central bank that they do not need the money.

The sh165b required for buying new cars for the 527 MPs for the next Parliament is one of the critical budget items which will have to be funded.

In a minority report authored by Dokolo Woman MP Cecilia Ogwal and Butambala County MP Muhammad Muwanga Kivumbi, the two legislators faulted government on what they called failure of government to allocate adequate resources to the production sectors as envisaged in the NDPIII.

The two legislators also raised concern that in the draft budget, government is cutting the budget sector from sh2 trillion allocated in the current financial year budget, to only sh1.27trillion in the budget for the next financial at a time when the country is fighting the deadly COVID-19 pandemic.

Ogwal and Muwanga also proposed the need for the budget for the agriculture sector to be increased from the proposed 5% to the 10% of the national budget recommended in the 2003 Maputo Protocol.

The minority report further faults government for violating the charter of fiscal policy by increasing government expenditures at a high rate that is not commensurate with the low increase in revenue collections.

Talking about the planned budget of sh200b for cattle restocking for Teso, Acholi, and Lango, Ayivu County MP Benard Atiku expressed disappointment that West Nile has always been left out in such compensations yet it was also greatly ravaged by the LRA insurgency.

Speaker Rebecca Kadaga asked government to ensure that in the 2021/2022 national budget, an additional sh5b is added on the money for the student loan scheme to enable an additional 1,000 students to benefit and to ensure that sugar mills for the people of Busoga are also budgeted for.

Kasilo County MP Elijah Okupa proposed the need for government to expeditiously enact a law guiding the operations of the newly created 10 cities before the budgeting process for the next financial year is completed.