Lugoloobi calls for restructuring of the national budget

PIC: Parliament budget chairman, Amos Lugoloobi

NATIONAL BUDGET

KAMPALA - The Parliament budget committee chairman, Amos Lugoloobi, also Ntenjeru north MP, has urged Government to restructure the national budget and move more resources into the production sectors which have potential to boost Uganda's economy.

Lugoloobi, who holds a masters degree in business administration expressed his dismay on Friday, saying that despite the fact that in many of their budget reports they have beenadvicing the Government to restructure the national budget and channel more resources to the production sectors, their recommendations have been falling on deaf ears.

Speaking during the Live Chat interaction with journalists organised by the Parliament communications department, Lugoloobi said, without restructuring the national budget to focus on production and wealth creating sectors such as agriculture, industry, tourism, and ICT, the high debt burden and the increasing rate of unemployment and poverty will prevail in the country.

Agriculture gets about 3% of the national budget while each of industry, tourism and ICT sectors get less than 1% of the same budget.

"Only 20.2% of the national budget is spent on the production sectors. The remaining 79.8% is spent on non-production sectors which do not have direct economic returns. As a result of this structure, our economy is stagnating with no significant progress,"said Lugoloobi.

Lugoloobi faulted the ministry of finance for not ensuring that the national budget is aligned to the core production sectors which were identified in the National Development Plan.

"The experts who made our development plans did a good job, but the Government is not implementing the ideas and strategies they put in the plans. If the ideas in those plans had been implemented, we would be better off as far progress is concerned," he elaborated.

He supported all the new tax proposals by the Government for the 2018/2019 financial year, but opposed the proposal to ban old cars of eight years and above which he said is a misguided move.

"This is not the kind of decision you just wake up and make suddenly. It is a decision that has to be planned for a period of five years. We are already generating a total of sh182b from the cars the Government is attempting to ban and it means it will have to borrow to replace that revenue which will worsen our public debt," Lugoloobi argued.

Lugolooobi said if the Government is serious about protecting the environment; which is the reason it gives for banning the old cars, they should begin with the enforcement of the kaveera ban, undertake measures to stop the rapid loss of the country's forest cover, and stop the destruction of wetlands- which he said poses a bigger danger to Uganda's environment.

Lugoloobi also faulted the Government for not doing enough to create incentives which can attract serious Foreign Direct Investments (FDI).

"The cost of doing business in Uganda is so high. The power tariffs are equally high and our incentives to attract investments are very poor. When you look at our FDI inflows, the figures dropped from sh1.2b in 2012 to sh600m in 2016, representing a 50% fall," he explained.

Matters concerning on why Parliament does not invoke its appropriation entrenched in the Budget Act and the Public Finance Management Act to allocate more resources to the production sectors, Lugoloobi said; "That is a challenge to us. The Government uses a micro modeling approach in coming up with figures in the budget. So, we cannot easily sit here and change those figures. Some of these allocations need restructuring by the Government. You can allocate sh2trillion to agriculture when the ministry has no capacity to utilise it."