Government urged to focus budget on a few key areas

May 13, 2013

Prof. Augustus Nuwagaba has proposed that the national budget should concentrate resources on key sectors that can ignite fundamental change in the economy.

By John Odyek

Prof. Augustus Nuwagaba has proposed that the national budget should concentrate resources on key sectors that can ignite fundamental change in the economy.

Nuwagaba, an economist and former professor at Makerere University, observed that funds are scattered thinly in many areas of the economy thus having little impact.

He said this during Civil Society Budget Advocacy Group discussion held at Serena Hotel, Kampala.

“Flagship budgeting comprises selecting the most pertinent sectors and funding them with an aim of having an impact in this sector usually with highest multiplier effects. An example here is Mauritius; the results have been phenomenal,” he said.

Nuwagaba suggested agriculture, roads, rail and human capital development as the key areas the Government can focus on.

The professor who holds a doctorate in poverty eradication made an outline of proposals to improve Uganda’s budget. He said there should be budget discipline and prioritisation, balancing the need for growth and fiscal policy management, widening the tax base, linking the budget with strategic plans and performance indicators.

Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy.

He remarked that corruption and lack of accountability would be a perennial burden on the budget. He asked the Government to ensure there was fiscal decentralisation in accordance with devolution of responsibilities to local governments, avoid donor dogma and strengthen domestic production and export sector performance.

Nuwagaba, the managing consultant of REEV Consult, said despite the Government’s stated macroeconomic achievements, household incomes have  remained low. Agriculture engages up to 73% of the population, the majority of whom are women and poor, producing at subsistence level.

State minister for finance Fred Omach said the ministry welcomes the partnership with the civil society in the quest to ensure that the national budget was transparent, participatory and reflects the views of all stakeholders. He said the theme for coming budget is: ‘Priorities for economic growth, development and transformation’.

He said government intends to continue to allocate expenditures on areas that were constraining socioeconomic transformation such as roads, power, science and innovation.

Julius Kapwepwe, a programme director at Uganda Debt Network said they support flagging certain sectors to cause meaningful change in people’s lives. Kapwepwe said to concentrate resources in a few sectors, the Government should cut down on recurrent expenditure and increase development expenditure.

He said government should also subsidise capital for the private sector by giving funds to banks which can lend them cheaply. He observed that currently the central government retains 77% of funds of the national budget and 23% goes to the local government.

“The sub-counties should be strengthened to make them the point for delivery for services to Ugandans.

They should get motor cycles and vehicles to monitor service delivery,” Kapwepwe said.

 

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