Absorption of Budget funds increases to 50 per cent
UNRA executive director Allen Kagina looking at the map of the Entebbe-Express Highway following a tour of the site recently. She was impressed by the progess of the work. PHOTO BY STEPHEN OTAGE
Kampala- The level of Budget absorption of funds for development projects in ministries/ agencies have increased from an average of 23 per cent some years ago to 50 per cent now. This means implementation of government projects is improving.
Ministry of Finance Planning and Economic development officials say this development puts the country on the right track of Development since investment projects are being implemented unlike in the past when they were not getting implemented.
Speaking at a joint news conference between ministry of Finance and Bank of Uganda on Tuesday at ministry of Finance headquarters, the Deputy Secretary to Treasury, Mr Patrick Ocailap, said over the last one year, there has been improvement in the absorption capacity in ministries leading to implementation of projects.
“The level of absorption capacity in ministries, agencies and departments now stands at 50 per cent compared to an average of 23 per cent in the past years,” he said.
Implemented projects
Mr Ocailap told Daily Monitor that progress had been made in Uganda National Roads Authority, where certificates worth Shs2 billion have been cleared leading to implementation of projects.
Failure to implement programmes delays benefits of projects and leads to high costs in form of interest rates in servicing the borrowed funds meant for the projects which have not been implemented.
The report by the Ministry of Finance on public debt, guarantees, other financial liabilities and grants for financial year 2014/15 indicates that the low absorption capacity of resources has increased the cost of government debt.
“Over time, the commitment charges paid on committed but undisbursed loans have become increasingly high,” ministry of Finance said in the report.
The government is financing the 2015/16 Budget with domestic resources consisting of Shs13.535 trillion, which represents71 per cent of the total expenditure and Shs5.7 billion from external resources, which represents 29 per cent of the total budget.
Finance minister Matia Kasaija said implementation of government projects was still a challenge and blamed it on accounting officers.
Improvements
To improve the situation, Mr Kasaija said: “Those who have the responsibility of implementing government projects should do what is expected of them without fail. There is no more fooling around with public resources, we are operating a transparent Budget,” he said.
Mr Kasaija explained that although domestic revenue efforts are increasing, large investments in infrastructure projects such as Karuma and Isimba projects funded from external resources are also increasing, causing a decrease in the ratio of domestic funding of the Budget.
