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KAMPALA - In order to deepen fiscal consolidation, the Ministry of Finance, Planning and Economic Development has highlighted areas that will suffer cuts in the next financial year’s budget.

The Permanent Secretary and Secretary to the Treasury, Dr Ramadan Ggoobi, in the second budget call circular on the finalisation of the budget for the next fiscal year, indicated that the prevailing budget constraint calls for strict debt control and its servicing costs.

He explained that the ministry is implementing fiscal consolidation focusing on increasing domestic revenue mobilisation, improving allocative efficiency and controlling domestic borrowing.

Among the principles to be upheld in the new fiscal year, Ggoobi said the purchase of vehicles will be restricted to hospital ambulances, medical supplies, agricultural extension, security and revenue mobilization.

Another area which will suffer budget cuts includes travel abroad.

President Yoweri Museveni is on record for having castigated Civil Servants and Members of Parliament (MPs) for prioritizing travels abroad as opposed to funding critical government programmes.

“Tell civil servants and MPs to stop travelling abroad. Money is being wasted on external travels and Kigumba (UPIK) is crying for money to get us more money. It is bad planning,” Museveni said last year in Kiryandongo while commissioning UPIK workshops built with support from the World Bank.

Ggoobi said the following principles will remain upheld:

• Provide and protect funding for key priorities namely: policy commitments and fixed costs (Parish Development Model (PDM) Emyooga, peace and security, human capital development, roads, and electricity.

• Support private sector development by maintaining financing to UDC, microfinance support centre, and agriculture credit facility.

• Fast-tracking implementation of domestic revenue mobilisation strategy measures to raise more revenue.

• Reduce pace of growth in debt over the medium term to minimize debt service costs and ensure debt sustainability.

• Prioritize completion of critical ongoing projects.

• No new non-concessional projects shall commence except those already in fiscal framework or those with no direct or indirect claim on the consolidated fund.

Expenditure ceiling

The preliminary resource envelope for the financial year 2023/24 issued in the first budget call circular which amounted to sh52.723 trillion has since been revised upwards to sh53.336 trillion.

Of this amount, sh29.957 trillion is domestic revenue; sh311b is budget support; and sh4.116 trillion is domestic borrowing.

A total of shh9.208 trillion is project support, sh9.455 trillion is domestic debt refinancing and sh287.1b is non-tax revenue.

"Although the overall budget has increased, the discretionary resource has reduced by Sh3.469 trillion from sh25.205 trillion to sh21.736 trillion," he said adding that accounting Officers should ensure that fixed costs take the first call as they finalise their budgets.