Finance ministry assures NDP III planners of funding

FINANCE    BUDGET

KAMPALA - Their deliberations, hinged on findings of the NDP II mid-term review which revealed financing as one of the bottlenecks in the implementation process, focused on finding new innovative financing mechanisms that the government can explore.

However, the director budget at Ministry of Finance, Planning and Economic Development, Kenneth Mugambe, surprised the experts converged in Kampala when he revealed that they had actually fully funded the NDP II but some sectors failed to absorb the funds.

He stated that although the funds are available, usually ministries have no proper plans on how to absorb the funds.

He noted that most of the government ministries, departments and agencies use the budget as their plan instead of carrying out proper planning and prioritization of resources before the budget process.

"Unless you prioritize your resources properly even the additional revenue sources won't help," he said.

Mugambe also noted that the new funding sources may not be of any significant relevance to the NDP III if the budget continues to face pressures that require money to be allocated in areas not planned for.

He said pressures such as the creation of new districts and structures under them and increment of salaries by legislators undermine the budget implementation.

Mugambe stated that the only way to successfully implement the NDPs is to set realistic plans that are cognizant of the realities that put pressure on the budget.

The breakfast policy series was under the theme ‘towards integrated financing of National Development Plan III'. The policy series was organised by the National Planning Authority (NPA) in partnership with the United Nations Development Fund (UNDP).

The series was organised to provide a platform for stakeholder consultation to inform the formulation of the NDP III, which is expected to be in place by September 2019.

Dr. Joseph Muvawala, the Executive Director NPA, noted that there are worrying economic trends that require new innovative funding mechanisms to help fund the implementation of NDP III.

Some of these include the growth in government expenditure, increasing demands for supplementary budgets have put pressure on the budget and undermined its implementation and the low domestic formal savings in the country.

"It worries us, seeing a lot of sub-resources coming into the country through remittances, close to sh81.2bn in 2011, only to be consumed with no investment," he said.

He said the fiscal space is also becoming narrow as evidenced by the widening fiscal deficit which has steadily increased from 4.9% in FY2017/18 to 5.8% in FY2018/19.

Other worrying financial trends include increasing debt, increase in non-concessional loans, pre-financing and increase in a pension fund with no application for development purposes.

In response during penal discussions, panelists including Ivan Mwondha a senior transport specialist, World Bank and Yemesrach Workie, economics advisor, UNDP, said there is a need to leverage private sector financing of government businesses and strengthening of policy and regulatory frameworks to attract funding.

Moses Dombo, the country director Oxfam said the government should look for ways of bringing the Civil Society and the non-state organisations on board so as to supplement the implementation of the NDP III.

He said there is also a need to monitor the implementation of projects to avoid wastage of resources.

The acting UN Resident Coordinator, EL-Khidir Daloum, said that there is a need for policy and institutional reforms to create an enabling environment for effective resource mobilization and investments.

"Such fiscal reforms should be equitable in nature and should benefit those who are at risk of getting left behind," he said.

He noted that while resource mobilization is important, effective utilization and accountability is key.

"We need to strengthen systems to guarantee value for money and we need to rationalize the use of existing financial resources so that we can fully optimize such resources," he said.