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CSOs respond to National Budget Framework Paper

posted 7 Apr 2015, 01:45 by RCN Uganda   [ updated 7 Apr 2015, 01:46 ]
Civil society organisations have lauded government on its plan of implementing Outcome Oriented Budgeting. “We welcome Government plans to embark on implementation of Outcome Oriented Budgeting, which if effected, will strengthen direct linkage between resource allocation and final outcomes of Government strategic interventions,” Julius Mukunda, CSBAG Coordinator noted. They further applauded government for having passed the Public Finance Management Act, 2015 which was recently assented to by the President. In a media briefing held at their offices in Ntinda on Thursday, 2 nd April 2015, civil society organisations under their umbrella Civil Society Budget Advocacy Group (CSBAG), that the Act enhances good finance practices and value for money. “It is strongly believed that once this law is operationalized and implemented accordingly, public finance management practices will be enhanced, value for money be promoted and there will be enhanced oversight function from Parliament”. Stated the CSOs. The civil society group also commended Ministry of Finance for the timely release of budget information, especially the launch of the budget website, and the CSO invitation at ministry of finance quarterly press releases. “We implore other Government institutions to learn from ministry of finance and do the same for increased citizen’s budget monitoring and feedback on Government implementation and service delivery outcomes,” Mukunda stated. On management of inflation, the civil society group implored government to put in place mechanism for agriculture sector support to guarantee steady food production and supply as a sustainable strategy for managing inflation. The civil society actors however, raised concern of depreciating exchange rate which is at US dollar for shillings 2903. They cited weak regulation of forex bureaus by the central bank.

“The weak regulation in Uganda’s foreign exchange market under the pretext of a floating exchange rate regime and the continued moral persuasion by the Bank of Uganda as a medium of administering the money policy regimes continues to face challenges,” CSOs warned. They instead recommended that government tightens on regulation. A call on prudent debt management was also made, CSOs sighted weakness by Parliament in studying debt acquisition proposals by Cabinet. Overall, external debt and domestic debt are rapidly increasing, for example, by June 2013; the total debt for Uganda was at UGX 18,560 trillion bigger than the 2014/15 national budget of UGX 15 trillion. CSOs highlighted that the domestic debt has so far surpassed UGX 6.7 trillion this financial year which was worrying and they called on parliament to push for expeditious implementation of the public finance law as well as support Bank of Uganda to contain the accelerated domestic borrowing. 

Civil society actors noted with concerns the increasing current account deficit which was recorded at 817,4b in quarter 3 of the financial year 2014/15. “Uganda should not simply be a supermarket for other economies. Rather we should have policy regimes that promote export growth competitiveness with a focus on investment in agriculture, tourism and minerals roads, electricity and infrastructure to improve export per capita, net flows and overall current account for Uganda,” Mukunda said. He was backed by Ahmed Hadji, of African Youth Development Link who said this should be reflected in the financial year 2015/16 budget. Hadji highlighted CSO concerns over the proposed budget cuts on health, education and agriculture. He warned on the likely negative impact these cuts will have on the youth who are Uganda’s largest population group and who largely depend on these social services. Worst hit is health budget where government plans to reduce it by 317.4bn, the Education budget by 45.3 bn and the agriculture sector budget to be reduced by 56.7bn. Surprisingly, Government plans to increase the Public Administration budget by 155.3bn and to effect interest payments at a cost of 678.4bn which is way above the planned budget allocation to the agriculture sector of 417bn Mukunda on this measure observed that by reducing money of sectors that have a direct impact on Uganda’s population, not only will this affect the overall welfare of the population but will also increase the economic cost of government to take care of a sick, illiterate and hungry population. The media briefing was also addressed by Jeff Wadulo of Jenga Afrika and CSBAG’s Carol Namagembe who expressed concern over the poor absorption capacities of the sectors as evidenced by the Quarter 1 performance reflected in the National Budget Framework Paper FY 2015/16