Parliament enacts Shs48.1 trillion first post-lockdown budget

Parliament has passed the Shs48.1 trillion budget for financial year 2022/23 with post Covid-19 economic recovery high on the agenda.

Under the theme “Industrialization for Inclusive growth, Employment and Wealth Creation,” projected revenue base is Shs48.1 trillion to finance the budget.

On recurrent expenditure, Ministry of Finance, Planning and Economic Development takes Shs2.3 trillion, Ministry of Defense and Veteran Affairs has been allocated Shs1.2 trillion, while Lands, Housing and Urban Development will take Shs503 billion.

On development expenditure, Defence takes Shs2.3 trillion, Ministry of Health Shs1.4 trillion, while Energy gets Shs1.4 trillion.

Uganda National Roads Authority has been given Shs2.5 trillion in development expenditure, signaling the significance of infrastructure in the post-Covid19 recovery.

The Finance State Minister, Hon. Henry Musasizi, who shepherded the Budget on behalf of President Museveni said there is need to heal the economy from the ravages of Covid-19.

“This budget of financial year 2022/23 will mark the recovery for this economy; our economy has been affected by shocks such as the Covid-19 pandemic, the regional geo-political conflicts, climate change…these developments affected government’s financial position through the reduction in government revenue,” said Musasizi.

The economy, said Budget Committee Chairperson, Hon. Patrick Opolot Isiagi, has grown by 3.8 per cent in the ending financial year, as against the projected 3.3 per cent.

The difference, he said, is attributed to the vaccination efforts that led to full re-opening of the economy and a surge in demand especially in areas of construction.

MP Opolot said the committee foresees a growth of six per cent of Gross Domestic Product (GDP) in financial year 2022/23.

“In the medium term, growth is expected to pick-up, supported by gains from the containment of the pandemic through vaccination, recovery in global demand and a rebound in foreign direct investment inflows majorly stemming from the oil pipeline construction,” he said.

Unemployment, noted Opolot has shot up to 64 per cent among the youth (18-30 years), a spike he said is explained by the lockdown due to Covid-19.

“Prior to the outbreak of Covid-19, there were 1.72 million unemployed youth including 0.362 million graduates in the country (2020 UBOS Statistical Abstract). According to the Uganda Bureau of Statistics, the share of unemployed youth persons in the country is about 64 per cents,” he said.

Alarm has also been sounded on the rising public debt, which increased by a whopping 15 per cent from 2020 to December 2021, to the last recorded Shs73.5 trillion.

Debt is expected to continue rising, with projections it will get to over 52 per cent of GDP.

“Public debt is on the rise and projected to reach 52.9 per cent of GDP in 2022/23 and the country’s debt sustainability metrics are characterized with slow export growth and increasing debt service,” said Opolot.

With government hopes for recovery and improvement of household income staked on the Parish Development Model, the Budget Committee was unhappy with the homogenic allocation of a flat rate of Shs100 million per parish, which they said is not alive to the dynamics of every parish in Uganda.

“Each parish has indicatively been allocated Shs100 million under the Parish Revolving Fund; this homogeneous allocation does not take into account varying socio-economic, geographical and population dynamics,” reads the Committee report in part.

On public investment, the committee recommended a withdrawal of proposed allocation of Shs319.5 billion to the stalled Lubowa Hospital, which it advised should instead be applied to address other critical needs of the sector.

Shs900 billion has been recommended for withdrawal from Treasury Operations, which the MPs said is an over-allocation which should be provided to other sectors.

A proposed allocation of Shs84 billion to Munyonyo Commonwealth Resort has been rejected by the committee because of uncertainty regarding government’s shares and dividends on the facility.

Committee on Trade Chairperson, Hon. Mwine Mpaka revealed that Shs12 billion of allocations to the facility is unaccounted for, and that vital documents have been stolen from Ministry of Finance.

“Shs12b is still unaccounted for…the dividends in Munyonyo have been unaccounted for; recently we interacted with the Finance State Minister Hon Henry Musasizi and discovered that documents relating to Munyonyo have been stolen from Ministry of Finance,” said MP Mpaka.

In a Minority Report, Shadow Finance Minister, Hon.Muwanga Kivumbi concurred with the withholding of the allocation to Munyonyo, citing corporate governance inadequacies which he said risks to cause government further financial loss.

“Approval of Shs86.4 billion should be withheld until Government fulfils the following; converts to shares all funds invested into Munyonyo Commonwealth Resort Limited; Uganda Development Corporation (UDC) nominates a board representative and the Board of Munyonyo Commonwealth Resort Limited is fully constituted; ensures that Munyonyo Commonwealth Resort Limited has the most recent Annual Report and Financial Statements,” said MP Kivumbi.

Muwanga Kivumbi opposed allocations to construct roads in the Democratic Republic of Congo, arguing that instead the money should be moved to procure road equipment for domestic use.
“Shs80 billion should be reallocated from construction of DRC roads for financing road maintenance across the country; additionally, as a best practice, all infrastructure projects should always reallocated of least 20 per cent for operations and maintenance within any given financial year,” he said.

Speaker Anita Among asked MPs to monitor the budget as passed by Parliament, looking at the output and its impact on the lives of citizens.
“What we have to do is to ensure we do oversight role; we are passing the money, we are doing our core role as Members of Parliament…what remains is oversight, you need to monitor this money, the Shs48 trillion, where it is going and how it is going to be used and the output we are to get out of this money,” she said.