Avoid poll spending pressures - WB

Ms Brenda Nabukenya campaigns during the Luweero by-election last year. The World Bank has warned against spending money meant for investments on elections. FILE PHOTO

What you need to know:

Drop. 2011 elections saw the shilling depreciate among other volatilities

Kampala.

The government has been told to resist election spending pressures as the 2016 general elections approach.

The Growth Challenge: Can Ugandan Cities Get To Work report released by World Bank Uganda country office in Kampala yesterday indicates that there may be pressure to divert money meant for investment into wages and salaries in the run up to the 2016 general elections.

“Outside the government’s investment programme, it is vital that the authorities resist pressure to engage in additional expenditures, especially in view of the low levels of revenue collection and in the context of political pressures resulting from the forthcoming 2016 general elections,” the report read in part.

2011 volatilities
The report highlights that the more than 30 per cent increment in prices, depreciation of the Uganda Shilling and surge in interest rates that were experienced in 2011 had been as a result of expenditure due to electoral pressures.

Already, Bank of Uganda (BOU) has been on the defensive pointing out that the mistakes made in 2011 shall not be repeated.

The World Bank in the report, however, indicated that the pressure to spend non-productive areas is likely to intensify.

“In the context of the upcoming 2016 general elections, there may be intensified pressure on the Government to increase expenditure. If the government succumbs to this pressure, this increased expenditure may intensify inflationary pressures and result in lower than expected levels of economic activity,” the report warned.

The Bank warned that if government succumbs to the pressures, there could be increased anxiety and uncertainty associated with elections, which “could undermine business and economic activity.”

It further points out that there may be pressures to divert money raised from the sale of oil exploration rights and savings for Karuma and Isimba dam projects to recurrent expenditure.

Budgeted spending
Mr Matia Kasaija, the new Minister of Finance, while speaking on the sidelines of the report launch, downplayed any expenditure beyond what will be budgeted for.

“I don’t see a situation where government will be under pressure to find money to finance election activities,” he told Daily Monitor. He emphasised that government will only provide funds to the Electoral Commission.