Uganda’s Finance Minister Matia Kasaija (pictured) will today afternoon formally read the Shs45.49Trn 2020/21 budget on behalf of the President.
Parliament passed and approved Shs45.49Trn for Financial Year 2020/21 compared with the Shs40.5trillion for this Financial Year ending June.30, representing an increase of 12.36%.
The Total Domestic resources will constitute 72.5% while external funding will constitute 27.5%.
However, due to the COVID -19 pandemic that has without doubt devastated economies around the world including the Ugandan economy, Finance Ministry has been some reallocations at last minute.
According to Finance Ministry, domestic revenue potentials have been affected which calls for the need to effectively allocate the available limited resources to support the 14 production lines that have been identified by the President i.e maize, cassava, banana, beans, Irish potato, sweet potato, millet, sugar cane, cattle (beef), dairy, coffee, tea, cocoa and fish. What is shocking though is that Agriculture has been cut by 47.0% with Shs618.73bn reallocated from the earlier passed Shs1.317 trillion.
“Amidst the COVID 19 shock it is necessary that limited available resources are spent on critical items,” a statement about the reallocations reads in part.
It adds: “Activities/items which are not critical in the performance of an institution can have their budgets redirected towards those votes/activities which are directly essential in providing services to citizens and fostering a post COVID 19 economic recovery. This report identifies some of the budget items in the FY 2020/21 draft estimates whose proportion of the budget allocated can be redirected without having significant distortionary effects on the running of the institutional activities. Some of these items can actually wait.”
Items that have cut include Allowances (Inc. Casuals, Temporary) by 50%, Staff Training by 100%, Hire of Venue (chairs, projector, etc) by 80%, Books, Periodicals & Newspapers by 80%, Computer supplies and Information Technology by 100%, Welfare and Entertainment
by 70%, Printing, Stationery, Photocopying and Binding by 70%, Small Office Equipment by 100%, Telecommunications by 50%, Postage and Courier by 50%, Information and communications technology by 50%, Travel inland by 50%, Travel abroad by 80%, Fuel, Lubricants and Oils by 50%, Advertising and Public Relations by 50%, Maintenance – Other by 100%, Transport Equipment by 50%, Furniture & Fixtures by 100% and Recruitments Expenses by 100%.
Additionally, Shs5.167 trillion was identified for reallocation.
Public Sector Management has been cut by 50.4% as Shs340.25bn has been reallocated from the draft Shs675.18bn, ICT and National Guidance by 74.1% with Shs120.68bn reallocated from draft budget of Shs162.9bn, Public Administration cut by 26.5% with Shs350.57bn reallocated from Shs1.32 trillion draft budget, Accountability cut by 21.3% as Shs448.76bn has been reallocated from Shs2.1 trillion while Trade and Industry has been cut by 25.1% with Shs43.06bn reallocated from Shs171.8bn.
Tourism budget has been cut by 15.3% with Shs30.27bn reallocated from Shs198.03bn, Health cut by 5.6% with Shs156.15bn reallocated from Shs2.77 trillion, Science, Technology and Innovation cut by 21.0% with Shs55.66bn reallocated from Shs264.50bn, Works and transport cut by 4.4% with Shs259.25bn reallocated from Shs5.88 trillion, Agriculture cut by 47.0% with Shs618.73bn reallocated from the earlier passed Shs1.317 trillion, Water and Environment cut by 74.6% as Shs1.26 trillion has been reallocated from Shs1.69 trillion, Education cut by 3.5% with Shs121.64bn reallocated from Shs3.51 trillion, Lands, Housing and Urban Development cut by 94.9% with Shs202.84bn reallocated from Shs213.68bn.
Further, Social Development has been cut by 10.4% with Shs17.85bn reallocated from Shs172.36bn, Energy and Mineral Development has been cut by 37.6% with Shs989.62bn reallocated from Shs2.63 trillion while Kampala Capital City Authority’s budget has been cut by 30.2% with Shs150.83bn reallocated from the earlier Shs500bn.
This means that Shs5.167 trillion has been reallocated from the earlier passed Shs23.6 trillion, representing a reduction of 21.9%.
Government allocated Shs1.228Trn for External Debt Repayments in 2020/21 compared to Shs723.32bn in 2019.
For Domestic Refinancing, Government allocated Shs7.486.14Trn in 2020 from Shs6.452Trn in 2019, which accounts for a lion’s share of 16% of the budget.
In the earlier passed budget, Government had allocated ShsShs400bn for domestic arrears in 2020/21 compared to Shs449.53bn in 2019. However, with reallocations and the need to boost the economy, it is expected that this figure has been revised upwards.
