Budget: Did Suruma deliver?

By Vision Reporter

WITH just hours to the reading of the budget for the next financial year, an assessment of last year’s promises shows a mixed record.

By Sylvia Juuko

WITH just hours to the reading of the budget for the next financial year, an assessment of last year’s promises shows a mixed record.

The energy crisis has dampened economic growth in the recent past. The economy last year grew by 5.9%, falling short of the targeted 7%. Growth has been forecast at 6.3% this year.

Finance minister Ezra Suruma last year announced that the Government would spend sh202b ($108.9m) to solve the energy crisis. He promised the immediate procurement of additional thermal generation of 100MW. However, both projects to supply this power failed to take off.

The proposed 50MW thermal power plant in Mutundwe was delayed after contract negotiations between Aggreko and Uganda Electricity Transmission Company stalled.

However, Simon D’Ujanga, the state for energy minister, assured in May that the plant would be commissioned in August.

The second project, the Namanve thermal power plant, which was awarded to a Norwegian firm, Jacobsen Electro, was stopped by court last month after a rival company disputed the bid results. The Government has moved to establish a sh99b Energy Fund to finance the development of Bujagali and Karuma hydro-power projects, in partnership with the private sector.

The construction of the 250MW Bujagali dam started this month and it is expected to be completed in 2011. The $450m Karuma project will be developed next year with Norpak.

To further improve energy efficiency, the Government proposed to import 500,000 energy saving bulbs for free distribution.

Over 800,000 bulbs were procured at sh2.4b ($1.2m). By May this year, 140,000 of them had been distributed.

The Government also pledged support to consumers installing solar lighting and water heating systems but this has not come through.

Regarding infrastructure, the Government pledged to improve key road junctions and roundabouts to reduce traffic congestion. These included Clock Tower, Ben Kiwanuka Street, Kitgum House, Access Road, Sixth Street, Mukwano Road and Garden City roundabout. Works have been concluded on most roads except for Jinja Road and Access Road.

Some emergency repairs have also been undertaken on the roads within the city to rid them of the numerous potholes.

To create a long-term solution to the problem of road maintenance, the Government last month created the Uganda National Road Authority. A Road Fund will be launched in July, through imposing road-user charges like a fuel levy.

The minister also promised to facilitate transport to the seaport of Mombasa. To that effect, Kenya and Uganda signed an agreement in April 2006 with the Rift Valley Railways Company. Both governments handed over their railway companies to Rift Valley.

In line with its pledges for industrial development, the Government allocated $27m for infrastructure in the Kampala Industrial and Business Park in Namanve. This will provide investors with land and Export Processing Zones. The amount is part of the $70m credit from the World Bank.

The Government last year also promised to improve the livelihood of four million poor people in the rural areas. Over sh9b was allocated for rural development through improved agricultural productivity, marketing, trade and access to financial services.

Savings and Credit Cooperative Organisations (SACCOS) were also earmarked for the provision of credit to the households and cooperatives. However, no money was approved for SACCOS this financial year. Post Bank, the proposed channel for funds, is negotiating with the Government.

The Government also set aside sh18b for the reconstruction of Northern Uganda. The funds were used for the resettlement of internally displaced people, post-conflict recovery and the development of the north.

The Government implemented the much touted Universal Secondary Education, in line with budget proposals.

Dr. Suruma told a budget review meeting last month that overall spending for the first three quarters of the financial year was in line with expectations. Budget releases amounted to sh2306b, or a performance of 100.3%.

Revenue figures showed net URA collections between July-December 2006 of sh1,239m, against an estimate of sh1,242m, a performance of 99.78%.

For this year’s budget, the minister said, priority areas would include energy, information, technology, development and maintenance of infrastructure.

Regarding northern Uganda, the Government is to allocate sh623b for the reconstruction programme, to be disbursed over a three-year period.

Budget: Did Suruma deliver?