Gov't releases quarter two expenditure

PIC: Permanent secretary  Ministry of Finance, Planning and economic development Keith Muhakanizi  addressing journalists during the quarter two expenditure release of FY2018/ 19 at the Ministry of Finance headquarters in Kampala on Friday  October 5, 2018 as the Budget Director Kenneth Mugambe looks on . Photo by Godiver Asege

The finance ministry has released sh4.3 trillion for the second quarter of the financial year 2018/19 with Secretary to the Treasury, Keith Muhakanizi warning accounting officers against late payment of wages and pension for civil servants and retirees.

Making the announcement earlier today at the Ministry of Finance headquarters in Kampala, Muhakanizi also stridently defended the national debt management policy insisting that it's within manageable levels.

Among the key highlights in the second quarter release includes sh1, 074.3b to cater for salaries and wages, sh145b for pension and gratuity payment and sh21.7b for salary, pension and gratuity arrears.

Other highlights include sh222b for catering to domestic arrears, sh95b for National Medical Stores to meet its obligation of purchasing essential drugs, sh153b to Uganda Road Fund for critical road maintenance and sh10b to ministry of gender for the social development to cater for the monthly stipend to elderly Ugandans.

Uganda operates a cash budget and funds to government ministries, departments and agencies are released by treasury in four quarterly batches.

"We are committed to having a very transparent budget process and releasing funds early is part of it. There is now no reason why civil servants should not be paid their salaries by 28th of every month," Muhakanizi said.

Muhakanizi later fielded questions ranging from the spiraling national debt especially increased borrowing from China, increased expenditure on government agencies and ministries renting instead of building permanent ‘homes' and the contentious issue of President Yoweri Museveni  doling out money to groups in Kampala.

"Ask the president or the people in State House," was Muhakanizi's curt response to what critics argue is Museveni's misuse of public funds.

On the issue of the national debt that has hit the sh42 trillion mark, Muhakanizi was bullish, contending that the 30% of Uganda's budget being expended on debt servicing is within manageable levels.

With government expending 15% of the national budget in the current financial year on salaries, it means that the country is spending 45% on two items - debt servicing and salaries.

"There is no cause for alarm. It would cause worry if the figure on debts and salaries went beyond 50% of the national budget," Muhakanizi noted.

China has of late been in the news for the wrong reason following its decision to ‘seize' assets of Sri Lanka and Zambia over a debt gone bad.

"It's important to avoid the debt trap. However, borrowing per se is not bad. It depends whether the money borrowed is put to proper use to enable repayment," Muhakanizi  said.

Early this year, the Government of Sri Lanka relinquished its biggest maritime port, Hambantota and 15,000 acres of land around it for 99 years over unpaid debts.

Economic wonks have warned African countries to be cautious with borrowing from China lest they slip into financial quicksand like Sri Lanka.