Thursday May 15 2014

Countdown to Budget Day: Should the ritual be discarded?

By Karoli Ssemogerere

Finance Minister Maria Kiwanuka is days away from the annual ritual of reading the budget speech for the financial year 2014/2015. It will be the last budget before the 2016 election season moves into high gear.

Today, the speech is fairly predictable. Half of the budget speech will focus on roads and other infrastructure, followed by East African Community policy issues. Agriculture, tourism, wages and fiscal measures will complete the annual ritual.

For several years, the budget was read on the same day in the EAC - in the so-called community spirit. That was until the Kenyans rewrote their Constitution requiring the annual budget statement to be presented to Parliament three months prior to the end of the financial year.

Kenya in 2013 de-linked the Executive from the Legislature, ejecting ministers from Parliament. Early assessments show that this has made the Executive more focused and more powerful because it is not concerned with the day-to-day business of Parliament.

In Uganda, there is little earth shattering content expected from the budget speech. It is part-drama, part-flair and a glossy public relations exercise. PR is very important in running the nation. But there are serious underlying issues that require some input on Budget Day. It is not a secret that Uganda’s finances are under strain.

Tax collections are under-target and government’s settlement of recurrent obligations, including wages, has been a problem. In 2014, government payroll performance continued to deteriorate in the traditional civil service.

The ongoing criminal investigations at the ministry of Public Service have left many wondering how losses of such a magnitude could have happened without being discovered by the Auditor General.

Managing payroll requires something more dramatic on the lines of the Salaries and Compensation Commission to review wages in the public sector across the board. Constitutional commissions like the Electoral Commission, for example, are being paid less than statutory bodies like KCCA.

The Inspectorate of Government, a quasi-judicial organ, is collecting lower wages than their counterparts in the Judiciary. In the Judiciary itself, the backbone of the third arm of government, significant pay apartheid exists between Judges and lower judicial officers who shoulder the donkey work in the system.

In its most important function - regulation, there are a number of obvious gaps. Government supervises both the public and the private sector but is struggling to manage these two effectively. Both public and private bodies have fallen victim to systematic internal fraud.

The water agency, NWSC, just like its private sector cousin Umeme, are beset by systematic parallel billing enriching individuals at the expense of their employers. Uganda is operating without a substantive anti-trust and competition law to regulate monopolies. Banks in 2013 are unravelling in seas of bad loans and other non-performing assets on the basis of ill-timed interest rate hikes.

As for the PR function, it may be useful to regulate the expenditures of public agencies, including regulated companies. If one, for example, took the ministry of Health and all its “awareness” campaigns and scored value for money, they would expect Uganda’s life expectancy to have jumped by at least 25 years from 1986 to-date.

This story is the same in other key sectors. It is not the job of the Finance minister to offer a way forward on major political problems; so we don’t expect anything on term limits, giving sugar and salt to voters and the ongoing campaigns to popularise the President’s 2016 candidature. That’s where the stories of belt tightening end - at the doorsteps to power.

Mr Ssemogerere is an Attorney-at-Law and an Advocate.