The Civil Society Budget Advocacy Group (CSBAG) on Friday highlighted various economic challenges facing Uganda and called for immediate remedies if the economy is to be fixed.
This was voiced during the end of year press conference, held at CSBAG Head Office in Ntinda, a Kampala suburb.
Mr. Julius Mukunda, CSBAG Executive Director, in a statement read to journalists, said despite a decline in inflation this year from 10.4 percent in January 2023 to 2.4 percent in November 2023, there are still bottlenecks in public finance management that need to be addressed.
“The Uganda Shilling continued to weaken against the US Dollar, depreciating by 0.7 percent to UShs 3782.03/USD in November from UShs 3755.63/USD in October 2023.”
“This was mainly driven by strong dollar demand by corporate companies that outcompeted supply during the month thus exerting depreciation pressures on the shilling,” reads the CSBAG statement in part.
Mr. Mukunda said CSBAG expects the final audit report next year and if done well, this will go a long way in addressing fiscal consolidation in Government.
“This is because the Audit report of 2022 raised concerns about potential irregularities, including ghost workers, in the salary and pension payroll. The government incurred a total financial loss of UGX 19,026,546,948 due to improper payments of salaries to ineligible persons or individuals in 129 Local Governments (LGs),” he said.
He commended Government’s efforts to fight corruption in public procurement following the suspension of providers by International Financial Institutions; such as the World Bank, African Development Bank, the Islamic Development Bank and the Asian Development Bank to which Uganda is a member.
“If sustained, this act of government will substantially improve transparency and accountability in public procurement of government services. We commend the Office of the Auditor General (OAG) on operationalizing the Citizen Feedback Platform (CFP) aimed at increasing citizens’ opportunities to report corruption cases,” he added.
He further said the abuse of the supplementary budget process is evident in the recent submission of a UGX 3.5 trillion supplementary budget to Parliament, contrary to the stipulations of the Public Finance Management Act (PFMA) 2015.
“Section 3 of the PFMA, mandates that supplementary budgets should only be approved for expenditures that are un-absorbable, unavoidable, and unforeseeable. Our scrutiny of the supplementary budget reveals a significant violation of these criteria, particularly in items totaling Ushs. 1.2 trillion,” he added.
He said the expenditures, comprising Ushs 885 billion in recurrent and Ushs 407 billion in development, lack justification according to the PFMA (2015).
Mr. Jeff Wadulo, CSBAG economic advisor, said although the Government has put much effort in bringing inflation down, fuel prices are still high compared to other countries in the EAC bloc.
On the supplementary budget, he recommended that Parliament takes decisive action by dismissing and excluding these items from the approved supplementary budget.
“It is concerning to note that Parliament’s support for such fiscal indiscipline undermines the very law it enacted to enhance fiscal discipline,” he said.
Mr. Wadulo said the question arises as to why Parliament would deviate from the principles it set forth in the PFMA (2015) by endorsing expenditures that do not meet the prescribed criteria.
“This raises issues of accountability and adherence to established legal frameworks, which are essential for maintaining fiscal responsibility and transparency,” he added.
According to CSBAG, Uganda’s public debt management and associated risks are of growing concern. CSBAG states that; as of June 2023, the total public debt stood at USD 23.66 billion (UGX 86,779.9 billion), representing an increase from the previous year.
“External debt accounted for 60.2 percent (USD 14.24 billion/UGX 52,206.1 billion), whereas domestic debt constituted 39.8 percent (USD 9.4 billion/UGX 34,573.8 billion),” adds the CSBAG statement.
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