Finance Minister Matia Kasaija
The Ministry of Finance is set to withdraw Shs200bn from the Petroleum Fund to finance the 2021/2022 national budget, according to documents tabled before Parliament.
The proposal is contained in the Appropriation Bill tabled by Minister of Finance Matia Kasaija and the money is set to contribute to the Shs23.885 trillion budget for the next financial year.
The Petroleum Fund (Fund) is established by section 56 of the Public Finance Management Act (PFMA), 2015.
The Fund serves as a depository for all revenues accruing to government from petroleum and related activities and disbursements of monies from the Fund are through appropriation to either the Consolidated Fund or to the Petroleum Revenue Investment Reserve Account.
The Petroleum Fund is managed by Bank of Uganda and the Fund operates three accounts including; a dollar and shillings accounts and a third account is in New York to facilitate investment of revenue.
The Central Bank in its December 2020 report reported that as at July 1st 2019, the opening balance on the Petroleum Fund was USD74.82Million and Shs28.22Bn totaling to Shs300Bn. During the year, the inflows were of USD1.56Million and Shs35.60Bn.
In the national budget of 2019/20, Parliament appropriated Shs445Bn from the Petroleum Fund to the Consolidated Fund. However, only Shs255Bn equivalent to USD69.95Mn of the amount appropriated was transferred to the Consolidated Fund to finance the budget.
Auditor General in his latest report revealed that the expected revenues in form of capital gains tax worth Shs198bn never materialised in 2020 and thus affected the amount which could be transferred from the Petroleum Fund.
Additionally, in May 2019, Parliament’s Budget Committee cautioned Government to contain its huge appetite for the oil funds before production kicks off and demanded the Ministry of Finance to establish an investment plan for the utilization of the petroleum funds before the resources are depleted.
