READING OF UGANDA BUDGET 2021/22

 

Scroll down the page to relive how the sh44.7 trillion 2021/22 National Budget was read on Thursday, June 10, 2021 at Kololo Independence Grounds, where Parliament sat.

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4:50pm

And it's a wrap - with the following selection of pictures from Kololo . . .

The moment President Museveni, accompanied by the First Lady, arrived at Kololo

It was a sweltering Thursday mid-afternoon

The Speaker and his deputy, the Chief Justice and security chiefs seen here set to welcome the President

A warm, red carpet welcome for the President and the First Lady

Ntenjeru North MP and finance state minister designate Amos Lugoloobi was the man to read the budget speech

The Prisons band animated the function

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4:47pm

Pandemic 'really, really bad'

The Speaker of Parliament is also keen to remind legislators that the COVID-19 pandemic situation "has become really, really bad".

"The second wave is highly infectious, and highly deadly," says Oulanyah, urging MPs to take advantage of Parliament's comprehensive medical scheme to know the state of their health in the COVID-19 context.

In fact, the health ministry has warned that the coronavirus is "spreading fast and is more deadly than ever before".

The ministry is urging the public to: 

- Follow SOPs at all time
- Avoid crowded places
- Wear your mask properly, covering your nose and mouth at all times
- Wash your hands with soap and water or use an alcohol-based hand sanitizer
- Stay home whenever possible

By the way, the latest update from the health ministry indicates 842 new coronavirus cases - from tests conducted on June 2, 2021.  The cumulative confirmed cases in Uganda are 55,511.

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4:44pm

Meanwhile, Speaker Oulanyah distances himself from official receipt of the new Cabinet list from the President.

"I want to confirm that he [the President] has made it very secretive to the extent that even the Speaker did not know about it.

"Mr President please give me the list, so that we become comfortable."

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4:40pm

More on the Cabinet list, Museveni says: "Many of these people I have nominated, I have been studying them for a long time. Some of them have very good qualities, including loyalty, hardworking, not corrupt, etc."

He then wraps up his delivery.

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4:25pm

'I surpised you'

President Yoweri Museveni talks of how spoilt for choice he was when coming up with a Cabinet list for the new term. He says he had to operate "underground", which he points out that it has some disadvantages as well as advantages - "and that is why I surprised you".

Tapping from his basic Maths of primary school back in the early 1950s, Museveni says he found himself "adding, substracting, dividing, then coming back" when putting together the latest Cabinet shortlist.

"And the people are so good. Really, the NRM has done a good job," he says, pointing at how spoilt for choice he was.

His picks will all have to be approved by Parliament - and it all started on Friday with the Vice-President-designate Jessica Alupo and Prime Minister-designate Robinah Nabbanja.

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4:14pm

Katumba attack was 'definite, politcal motive'

"The schemers against security are wasting their time," says Museveni.

He adds: "The attack on Gen. Katumba was not an ordinary crime. It was a definite, politcal motive - and we shall know which pig was behind this one. People who use assassination are people who are not sure of themselves. NRM never used assassination because we are sure of ourselves."

"It is bankrupt to kill people!"

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4:06pm

The President says criminals will leave at least one clue.

In the recent drive-by shooting targetting works and transport minister designate Gen. Katumba Wamala, Museveni says that he was informed that one of the fugitive assailants reportedly dropped a cloth, but that one of the residents who arrived at the scene apparently took it away.

"The forensic capacity of the Police has now improved - but you must respect the scene of crime," he urges.

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4:02pm

President Museveni launches yet another attack on criminals, calling them "parasites".

"People are busy creating wealth - so who are you, instead of working, you go to attack people? You want to cause fear," he says.

"I am here to tell the parasites that we shall crush them."

Likening fighting the criminals to how he used to remove jiggers from his feet as a child, Museveni says that it should involve tackling the "eye of the jigger" in reference to a more direct approach.


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3:54pm

"We were a people who were involved in wealth creation. We did not have time for sectarianism," says the President.

"Therefore, this ideology of sectarianism was part of the pseudo-ideology pushed by parasites."

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3:46pm

Once Lugoloobi ends his speech, President Yoweri Museveni, on whose behalf he has reading the budget, is invited to deliver his comments.

He obliges.

After recognizing all protocol, "all the big and small people",  Museveni points out that "it seems there is a struggle between the producers of wealth and the parasites", before providing a historical anecdote - from his experience - to back up what he has just underlined.

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3:42pm

On Uganda's public debt sustainability, Lugoloobi says: "Uganda’s debt amounted to US$17.96b as at December 31, 2020, equivalent to 49.8% of GDP."

He says Uganda's public debt remains "sustainable in the short, medium and long
term".

Lugoloobi concludes his speech by telling Parliament that the economic growth strategy and budget priorities he has presented "seek to speed up economic recovery and drive more inclusive growth by creating an environment for increased socioeconomic empowerment of the ordinary Ugandans".

He adds that "specific focus in the coming budget has been placed on implementing
the parish development model".

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3:40pm

On tax administration measures, here is what the Uganda Revenue Authority will do . . .

- Strengthen tax arrears management and recovery

- Enhance data analysis

- Enforce tax compliance using the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) and Digital Tax Stamps

- Enforce enhanced licensing requirements for clearing and tax agents, and bond operators

- improve detection of smugglers using non-intrusive inspection
equipment

- close all bonded houses for imported sugar for re-export to avoid undeclaration and misclassification

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3:39pm

And on the tax policy interventions . . .

- Reform taxation of rental income to remove the incentive for nonindividual rental taxpayers to claim unrestricted deductions which significantly reduce their tax ontribution.

- Reduce rates of depreciation for some classes of assets.

- Discontinue the concurrent deduction of initial allowances and depreciation in the first year of use of qualifying assets.

- Review the capital gains tax regime by allowing for the effect of inflation and providing tax relief for venture capital investments.

- Broaden the scope of taxation of plastics to cover all plastics

- Rationalize the Excise Duty regime on telecommunication services by scrapping the excise duty on Over the Top (OTT) and introduce a harmonized excise duty rate of 12.0% on airtime, value-added services and internet data excluding data for provision of medical services and the provision of education services.

- Introduce an export levy of 7% on the value of fish maw exports.

- Impose an export levy of 5% and 10% on processed and unprocessed gold and other minerals respectively.

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3:35pm

Lugoloobi tells Parliament that domestic revenue for next financial year is projected at sh22, 425b, equivalent to 13.8% of GDP, compared to a projected outturn of sh19,432b, equivalent to 13.1% of GDP in the financial year 2020/21.

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3:35pm

Lugoloobi says that sh6.9 trillion has been provided in the 2021/22 budget to improve peace and security.

Meanwhile, the budget of the Judiciary has been "substantially" enhanced
from sh199.1b to sh376.9b.

Out of this, sh146.6b has been provided for the recruitment and facilitation of Judicial staff. In addition, sh18.2b has been provided to implement the Electronic Court Case Management Information System and the Prosecution Case Management Information System.

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3:28pm

We also learn that the National Medical Stores (NMS) budget has been increased from
sh420.3b this fiscal year to sh600.3b in the 2021/22 financial year.

Under education, the government plans to recruit 4,200 primary school teachers to "raise the national staffing level to 70%".

For access to safe water and sanitation, the target is to increase the coverage of safe water supply in rural areas to 81% and to 100% in urban areas by 2025. More specifically, sh124.9b has been provided for rural water, and sh523.4b for urban water.

Lugoloobi says that to enhance human capital development, sh7.7 trillion has been allocated next financial year.

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3:26pm

Sh134.9b has been allocated in the budget for Financial Year 2021/22 to enhance digitization of the economy.

Under health, Lugoloobi says: "The initial target is to vaccinate at least six million most vulnerable persons comprised of teachers, health workers, the elderly and persons with chronic ailments. 

As such, he adds, sh560b has been provided for the procurement of vaccines.

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3:20pm

Lugoloobi announces that sh1.1 trillion has been allocated in the budget for the development of energy infrastructure and services. Out of this, sh646.2b is earmarked for rural electrification.

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3:20pm

Part of what the government wants to do to improve transport infrastructure is to upgrade of 400 kilometres equivalent of national roads from gravel to tarmac.

Also part of the plan is the rehabilitation of 200km equivalent of national roads and 400km of Community Access Roads, and the maintenance of national and District Urban and Community Access road network. 

Lugoloobi says: "Sh5.1 trillion has been allocated in the budget for the development of the integrated transport infrastructure and related services. Out of this, sh487.4b is for road maintenance and sh135.9b is for community roads improvement."

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3:18pm

"Mineral beneficiation adds economic value to naturally endowed minerals," underlines Lugoloobi.

"The commercialization of our oil and gas endowments will generate investments of between US$15-20b over the next five years."

We learn that mineral development has been given a share of sh49b in the budget.

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3:15 pm

Pointing at agriculture as continuing to be the "mainstay of livelihoods for the vast
majority of Ugandans in rural areas", Lugoloobi says that the agro-industrialisation strategy will address low production and productivity of primary agriculture, poor post-harvest handling and storage, limited value addition and insufficient market access.

Overall, a total of sh1.67 trillion has been allocated to support agro-industrialization
initiatives next financial year.

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3:13 pm

For 2021/22, sh358.5b has been allocated in the national budget for innovation and technological development.

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3:11 pm

"To further support advancement in scientific research and innovation, the construction of the National Automotive Park will commence next year," announces Lugoloobi.

"Feasibility studies for Regional Science and Technology Parks and Technology and Business Incubators will also be carried out."

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3:10 pm

On boosting business activity, the Government is looking at access to affordable medium-to-long term capital. And here, Lugoloobi says Uganda Development Bank will be capitalized with an additional sh103b in 2021/22.

This is in addition to the sh555b disbursed in 2020/21 for lending to Small and
Medium Enterprises affected by the COVID-19 pandemic, among others.

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3:07 pm

Under the economic growth strategy for the medium term . . .

The target in the medium term, Lugoloobi says, is to to raise growth rates from 4.3% estimated for 2021/22 to at least 7%.

The Government, he adds, is keen to restore the economy to medium growth path. And that will require such interventions as:

- Boosting business of the private sector
- Aggressively promoting agro-industrialization
- Commercializing minerals, oil and gas endowments

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3:03 pm

Lugoloobi, who is reading the national budget for the first time ever, says that when it comes to law and order, crime reduced by 8.9% from 215,000 cases in 2019 to 196,000 cases in 2020. 

It is understood that interventions such as the Safe City Camera Project, enhanced motorized and foot patrols and community policing have contributed to this drop. 

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2:59 pm

He tells Parliament that despite the pandemic's adverse impact, Uganda's economy "remains resilient, partly as a result of quick and strong
Government response".

"To minimize the negative impact of COVID-19 on the social and economic welfare of the country, direct fiscal interventions totalling sh2.6 trillion were implemented."

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2:57 pm

Lugoloobi tells Parliament that the quality of life of Ugandans has improved over the last five years and that life expectancy has increased from 44 years in 1998 to 63 years currently. 

He adds that literacy rates have improved to 76% of the population.

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2:55 pm

- Under economic infrastructure, Lugoloobi says the national paved road network has increased by 41% from 3,800 kilometres in 2016 to 5,400 kilometres today.

- The national electricity access today stands at 51%, of which 24% is on-grid and 27% off-grid.

- Internet access now stands at 52% with 21 million people using the internet. Active mobile money subscriptions are 23 million served by 235,800 mobile money agents. High-speed optical fibre cable covers 3,900 kilometres.

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2:53 pm

"Uganda’s per capita income is increasing steadily," says the Ntenjeru legislator. It is projected to increase to US$932 in 2020/21.

"We expect to achieve middle-income of US$1,039 within the third year of NDPIII implementation," says Lugoloobi.

So why did Uganda fail to attain the much promised middle-income status by 2020?

Lugoloobi offers the reasons:

- Lower than expected productivity, especially in agriculture
- Inefficiencies in public investments
- The shocks from natural disasters, especially in the last two years.

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2:49 pm

Coffee remains the leading agricultural export earning US$ 497.4m in 2019/20. Dairy exports fetched US$ 204.5 million, while tea exports earned US$71m in 2019/20. Fish exports earnings increased from US$121m to US$ 227m, over the same period.

On tourism, Lugoloobi says that the outbreak of COVID19 has caused a huge setback to tourism, "as we all know".

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2:47 pm

We are told that international trade continued to flourish despite the COVID19
pandemic. Merchandize exports grew by 4.7% increasing from US$4.1b in 2019 to US$4.3b in 2020. Agricultural export values grew by 19% from US$ 1.4b in 2018/19 to US$ 1.8b in 2019/20.

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2:43 pm

Lugoloobi, who is the MP of Ntenjeru North, said that Uganda's agricultural sector’s contribution to the economy has "stagnated at around 23% over the last five years". He says this requires increasing the pace of industrialisation. 

There has been increased production of agricultural commodities, including for export.

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2:34 pm

We learn that Uganda's economy is projected to grow by 3.3% in the 2021/22 financial year, rising from 3% in the previous financial year. According to Lugoloobi, the economy has grown from sh108.5 trillion in the 2016/17 financial year to sh148.3 trillion in the 2020/21 financial year.

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2:29 pm

Lugoloobi acknowledges that the coronavirus has been "the most serious threat to our existence" and advises Ugandans to continue observing the standard operating procedures.

He says that while the pandemi has presented a lot of challenges to the country, "several evidence points at the resilience on the part of Ugandans, "so we should congratulate ourselves as Ugandans".

Lugoloobi says that the economic shocks from the pandemic have, ina twist, been turned into opportunities, such as in effeciency in public sending by using digital solutions.

Several firms have also switched production lines in this period.

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2:23 pm

Amos Lugoloobi starts presenting the budget. He is keen to thank President Museveni for giving him the "rare opportunity" of presenting the budget speech.

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2:16 pm

Speaker Jacob Oulanyah is chairing today's session.

He quotes the Constitution as stating that: "The President shall cause  to be prepared & laid before Parliament in each financial year,but in any case not later than the 15th day before the commencement of the financial year, estimates of revenues & expenditure of gov't for the next financial year."

Oulanyah also briefly touches on the four stages of the budget cycle, asking MPs to acquaint themselves with the processes, which are:

- Policy formulation
- Budget approval
- Policy execution or implementation by the Executive
- Oversight/monitoring by Parliament

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2:11 pm

President Yoweri Museveni has arrived at at Kololo Independence Grounds, the venue of Parliament's sitting. Soon, the session gets under way with the playing and singing of the national and East African anthems.

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2:07 pm

Today, President Yoweri Museveni, who is constitutionally Uganda's finance minister, is set to deliver the sh44.7 trillion 2021/22 national budget speech to Parliament.

It is understood the newly appointed Minister of State for Finance (Planning), Amos Lugoloobi, will perform this task on behalf of the President. 

Lugoloobi has been the chairperson of Parliament's budget committee.

The 2021/22 budget it themed: “Industrialization for inclusive growth, employment and wealth creation”.

Parliament approved the budget in early May, which presented a decrease of sh714 billion from that of 2020/21. A report of the budget committee indicated that the drop this financial year is largely attributed to the projected decrease of sh2.4 billion in external financing for project support.

The resource envelope is expected to be financed by domestic revenue (76.7%) and external revenue (23.3%).