• Home
  • Opinion
  • Of Uganda’s sh25 trillion budget and debts

Of Uganda’s sh25 trillion budget and debts

By Vision Reporter

Added 2nd June 2015 11:33 AM

The sh25 trillion Uganda budget for FY 2015/16 has been considered when globally, the financial crisis remains apparent.

trueBy Julius Kapwepwe Mishambi

The sh25 trillion Uganda budget for FY 2015/16 has been considered when globally, the financial crisis remains apparent.

Taking the European Union and Greece as a case, it is evident that the austerity and other hastily adopted debt measures, especially, since 2012 to-date have yielded a largely systemic collapse of the Greek economic capacity.

That is, if the Greek health, socio-economic protection and education systems, current account balances and debt repayment capacities are anything to go by.

Clearly, Greece continues to experience various contradictory statements from various Government officials and IMF, even as the negotiation sessions between the Troika or Eurogroup and Greek Government continue. Particularly, the work of the committee for truth on public debt has suffered such contradictory statements.

So, while there is talk that Uganda’s debt sustainability indicators are okay, we ought to recall that the country has grappled with the debt situation since pre-independence from the colonial Britain on October 9, 1962.

For instance, a loan worth $24m was in 1955 advanced by The World Bank (WB), towards regional railways and harbours connection in Uganda, Kenya and Tanganyika; then another WB loan worth $8.4m for purposes of Owen Falls Dam electricity that eventually commissioned in 1954.

Uganda having defaulted on debt repayment in 1980s through the 1990s and thereafter creates room for doubt about the FY 2015/16 Uganda budget. Greece has certainly suffered debt repayment and economic challenges.

Like Greece, that only 44.5% of Uganda’s FY 2015/16 will be financed with 55.5% from borrowing is not wise. 

Except for health, energy and roads, already the productive sectors will have peanuts of funding, for example, trade and tourism with sh79b and agriculture about sh482b.

Unnecessary funding (rather than austerity) is in public administration with sh713b and public sector management at sh776.1b.

The financing there, is largely recurrent for parliamentarians, ministers, various advisors, special appointees and their related travels and allowances.

Yet the wider 38 million of Uganda population mainly gains from capital financing (development budget).

Why would public administrators be happy to propagate malnutrition of the productive sectors and encourage an economy that is widely consumptive in nature? Do they really have their constituents and country at heart?

With the budget suddenly expanded from sh18 trillion to sh25 trillion over unclear circumstances in a space of a week and the wider revenue gap thereof, should the workers be worried of their funds at NSSF? 

While Parliament has hastily overcome the battle that passed the FY 2015/16 Uganda budget, it has not won the war. Moreover the sh25 trillion budget has come before the expected excuses for supplementary requests and spending.

A new overall national debt of over Shs 18 trillion (domestic and external) in FY 2015/16 only makes the Ugandan economy weaker and with challenges as Greece.

We are adding more funds towards pension sub-sector that continues to grapple with unfinished court cases and limited accountability through Local Governments coupled with ministries of Public Service and finance systems.

So, there is limited parliamentary capacity to articulate budget issues. It is time to audit the functioning and net benefits of the budget decisions of the current Parliament in Uganda.

 The writer is the Director of Programmes of Uganda Debt Network

Of Uganda’s sh25 trillion budget and debts

More From The Author

Related articles