The Economic Policy Research Center (EPRC) says the Covid-19 pandemic caused a drop in revenues, economic shutdown and new expenditure pressures which now calls forre-prioritization of national resources.
According to Paul Lakuma, the Head of the Macro-Economic Unit at EPRC, a medium plan in reallocating the budget to agriculture, health, education, trade and industry, social development, ICT, works and energy will enhance economic growth.
Such sectors, according Lakuma, largely increase household income and reduce unemployment.
While appearing before Parliament’s Budget Committee chaired by Hon Patrick Opolot Isiagi, on Monday, 24 January 2022, Lakuma emphasised that Uganda needs to respond to issues that have affected its budgeting due to effects of Covid-19.
Lakuma cited low absorption of externally funded development budgets in sectors of agriculture and health, compared to full absorption of the domestic counterpart budgets in the same sectors.
He added that donor budgets did not perform well in terms of absorption, due to strict procurement, monitoring and evaluation conditions as well as demands to compensate project affected persons using the domestic budget, which in turn stalled a number of projects.
“In light of that, we ask for renegotiation with donors that some of these funds which are not performing can be reallocated during the budgetto address the key priority areas,” said Lakuma.
He made mention of the health sector that largely relies on external financing adding that a big portion of it is not fully utilized.
He also said duplication of budget outputs reduces flexibility and accountability and increases the cost of monitoring the projects undertaken under the different sectors.
“This calls for consolidation of similar budget outputs which should be done in consultation with key stakeholders,” Lakuma said.
Among other recommendations by EPRC is to pause new road construction in the short term so as to re-channel the available finds to other urgent and critical areas.
Committee Members expressed concerns on the recommendation by EPRC to halt new road construction saying many of the country’s sectors depend on a good road network.
Kabale District Woman MP, Hon Catherine Ndamira said sectors like health and agriculture can only thrive where roads are streamlined and in good condition.
“Hospitals cannot get any patients from hard to reach areas where roads are impassableand this is the same for agriculture. You need to rephrase that recommendation because roads are important for the country,” said Ndamira.
Hon Lawrence Biyika Songa (NRM, Ora County) added that transport is a key factor in addressing challenges facing Uganda’s economy especially in an age-based economy.
“How can perishable products be transported to markets without good roads. Which businessman will leave Kampala to go to Kitgum if he will get stuck on the road? For farmers to make profits from their produce, they need market access which is possible through a good road network,” Biyika Songa said.
Sheema Municipality MP, Hon Dickson Kateshumbwa tasked EPRC to make recommendations in light of income generation rather than just on expenditure, considering that Uganda has exceeded its borrowing.
He also asked the officials to range their research on budgeting to improve the economy basing on the Parish Development Model.
“Statistically, up to now, we do not know how many parishes in this country have or do not have schools, health facilities or electricity, which are critical social services,” said Kateshumbwa.
Paul Omara (Indep., Otuke County) asked EPRC to develop an encompassing strategy that can increase production and promote value addition through good grain storage facilities to promote export of good quality seeds for export to regional markets.
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