Matia Kasaija, the Minister of Finance, Planning and Economic Development.
Uganda Revenue Authority (URA) is expected to increase its collections by four trillion Shillings to 29.7 trillion Shillings in domestic revenues for the financial year 2023/24, compared to the projections for this financial year.
The Minister of Finance, Planning, and Economics Development, Matia Kasaija, says that he expects the economy to do better with an improvement in private sector activities.
Speaking at the National Budget Conference to start off the budgeting process for the next financial year, Kasaija reiterated that this year’s performance has been affected by shocks they had not foreseen, especially the sharp rise in global inflation that has affected local commodity prices.
He however assures the public that the Resource Envelope next financial year will not have significant changes from that of the current year, with the expectation of no new taxes.
In the financial year ending June 2022, URA collected 21.6 trillion Shillings out of the targeted 22.3 trillion Shillings. More than half of the 704 billion Shilling shortfall was attributed to government tax arrears.
Julius Mukunda, the Executive Director of the Civil Society Budget Advocacy Group hailed the government’s decision not to introduce new taxes this current year, adding that the suspension should continue for at least three years.
According to Mukunda, this will give the private sector and households more incentives to recover from the effects of the economic shocks.
The effects of the economic shock meant that the economy grew by 4.6 percent last year and could expand by 6.5 percent this year, according to the government forecasts, slower than earlier projections.
Kasaija also says that they will increase financing for human capital development like education and health programs as priority areas in the next year while limiting the growth in debt.
This is expected to arise from domestic revenue increases or reductions in allocations to other programs. USAID Head of Mission, Richard Nelson hailed the government for the recent commitment to cautious spending in the wake of the economic hardships the country is facing.
He, however, said that on top of the planned increase in health and education spending, the next budget should increase social protection financing, especially by expanding the grants for the elderly by lowering the qualification requirements and covering all persons within the bracket.
On top of human capital, Kasaija named Social protection, agricultural productivity, and transport infrastructure with a focus on maintenance and promotion of trade and exports as the areas of focus next year.
The government plans to support industrialization with the existing industrial parks being operationalized, while rural electrification will continue to cover the remaining districts and sub-counties.
“In health, the strategy emphasis will shift from curative health care system to preventive health care,” he said, while in the education sector, “focus will be on increasing the relevance of learning and knowledge building to the needs of society and the economy.
The local governments however are not happy with the government’s lengthy procurement process, which has reportedly slowed down developments supervised by districts.
Richard Rwabuhinga, the chairperson of the Uganda Local Governments Association-ULGA, said for example, that the government gives the local governments debt-funded projects and they put everything required in order.
However, by the time a contractor is got and sent to the site, the budget process is ending and the money is returned to the consolidated fund.
Rwabuhinga, also Kabarole District LC V Chairperson, said that local governments have unfairly been accused of having ‘low absorption capacity because it is the central government that delays the progress of projects, giving examples of seed schools and health centers.
Kasaija agreed that there is a problem, adding that he will table it before the cabinet so that a policy is made that gives local governments the powers to get contractors for local government projects.
He said it would even be easier for the government to demand for full accountability for failed projects.
Rwabuhinga also accused the government of selective application of the laws when enforcing environmental protection laws.
According to him, most violators of the environment are usually people either with financial resources or connections with the government, which somehow protects them from the law.
He called for central government action on the law enforcers but also increased funding for district environment officers to enable them to play their part.
Rwabuhinga also urged the government to enhance the rate at which the Parish Development Model, PDM, is being implemented to ensure some regions are not left behind.
He apologized for the money that has so far been reported lost by local government officials but hoped that the government will be able to bring the culprits to book.
On the PDM, Charles Ocici, the Executive Director, Enterprise Uganda urged the government to take ‘mindset change’ seriously and not only at the grassroots, but also national level. He said that if not done, money for the PDM is likely to go the way the money for previous wealth creation like Emyooga.
On his part, Zaake Kibedi, Uganda’s Ambassador to the United Arab Emirates urged the government to implement the various policies proposed to improve the externalization of labor. He said that despite the increasing contribution of workers in the Middle East to Uganda’s economy, the government has not significantly empowered the missions in those countries to support the external labor industry.
Kibedi says that the funding that was being given to the missions there when there were less than 30,000 Ugandans is the same as today, with more than 100,000 people.
Prime Minister Robinah Nabbanja acknowledged the need to increase funding for consular service expansion in the Middle East.
-URN
