City Authority grapples with first ever budget cuts

The level of public works that took place in Kampala City since Ms Jennifer Musisi was appointed executive director of Kampala Capital City Authority in 2010 is probably greater or equal to what had been in the city for the 25 years President Museveni had been in power before Ms Musisi’s appointment. This was made possible by a significant increase in funding for the city administration, which people at City Hall now fear is ebbing.
For the financial year 2016/2017, the KCCA approved budget was Shs. 563.8b. It was composed of Shs. 150.34b from government of Uganda funds, Shs.280.8b from World Bank, Shs 20b from Uganda Road fund and Shs 112.7b from Non Tax Revenue (NTR).

However, as it were still demanding for a higher funding from central government to meet its obligations, the situation is now worse as its budget allocation for 2017/2018 has been slashed from Shs 563b to Shs 314b. The Shs 314b was again slashed by Shs 317m.
The Executive has communicated that it will slash budgetary allocations to all sectors by 30 percent. The government says the saved monies are to finance infrastructural projects. But the pronouncement has left many sectors rattled.
Inspector General of Police Kale Kayihura took the opportunity of a visit to the police headquarters by Speaker of Parliament Rebecca Kadaga recently to implore her to lobby for the police budget not to be cut.
At KCCA, there has been a rare unified reaction to the budget cut from both the political leadership and the technical team.
On January 2, Executive Director Musisi wrote to Kampala Affairs Minister Beti Kamya indicating that for the first and second quarter of this financial year, the government initially released to KCCA a total of Shs. 77b against a funding requirement of Shs.127.21b as per the approved work plan and cash flow forecast for the two quarters.

The shortfall in releases from government funding for two quarters totaled to Shs. 50b. KCCA had also projected to collect Non Tax Revenue (NTR) of Shs.52.33b for the period of July to December 2016 in the FY 2016/2017.
However, only Shs 43.12b by 31 December last year was collected, giving a shortfall of Shs. 9.2b. Ms Musisi notes that the total shortfall in funding from both government funds and NTR collections by 31 December last year stood at Shs. 53.12b.
With this shortfall, she notes that a number of recurrent operational as well as contractual commitments have not been funded and that more planned activities haven’t been implemented.
Government would later reveal that the slashed budget was due to the poor performance of the economy.

The shortfall in funding has left both technocrats and politicians at city hall up in arms, saying their targets of service delivery will not be met and the city could revert to a dilapidated status.
As a result, the budget for foreign travels for all staff has been reduced so as to minimize funds. Many more projects are not spared either.
Although Ms Musisi wrote to the Finance Ministry asking for a supplementary budget of Shs. 48b to secure right of way for priority roads, junctions and drainage systems, she hasn’t been answered yet.
KCCA councillors, who are directly elected, have instead accused the Kampala Minister, Ms Beti Kamya, of what they call failing to defend the interests of Kampala people before cabinet.
Lord Mayor Erias Lukwago has since tasked Ms Kamya to explain why KCCA’s budget was slashed yet Kampala alone contributes 70 percent to the national revenue.

He says KCCA should at least be allocated Shs 1 trillion, which is about 4 percent of the national budget.
Ms Musisi asked Ms Kamya to engage the Executive so that money could be released to critical areas.
“…the purpose of this letter is to bring the above situation to your attention and seek your intervention in engaging with government to consider releasing of funds to the critical areas that affect service delivery in the city,” says Ms Musisi’s letter, also copied to the Lord Mayor, all division mayors and all directors at KCCA.
Ms Musisi notes that due to the strategic importance of Kampala as the capital city which generates 70 percent of taxes and 60 percent of the Gross Domestic Product (GDP), it should be accorded a special status in terms of planning and financing.

She says KCCA, on top of providing services, has a number of debts to pay off. She says up to Shs 9 billion is pending repayment on road works, Shs 537 for garbage collection, Shs 739 for street lighting, Shs 220 for law enforcement officers, Shs 9b meant for the payroll costs and Shs 500m for the operationalization of the passenger railway services.
Other KCCA loans,a ccorind to Ms Musisi, are 182 billion for compensating people affected by the railway project, Shs 15 billion balance on Usafi Market purchase, Shs 5b for the purchase of Kalinabiri Primary School land, Shs 500m salary arrears to former deputy lord mayor, Mr Sulaiman Kidandala, Shs 877m owed to Buganda Land Board for the leases of Namungooma and Kitebi primary schools and Shs 1.5 billion for the purchase of land in Rubaga.

KCCA not alone
KCCA collects approximately Shs 100 billion annually from license and other fees. Last year KCCA had projected to collect local revenue of Shs 120b but it fell short by Shs 30 billion.
Mr Lukwago says informal sector businesses which are the source of KCCA’s local revenues is struggling, and that it would be unfair for KCCA to look at it as the heart of its funding. He says that government ought to consider Kampala as a special case and that if KCCA cannot continue to rely on locally collected revenue.
Mr Jim Mugunga, the ministry of Finance Spokesperson, says in the previous budget allocation, there were at least 10 percent across all sectors because the economy isn’t doing well, adding that KCCA is like any other sector whose budget was slashed.
He says that government budgets according to the priority areas available. He says that sectors ought to reprioritize in order to fall within the budget available.
Mr Mugunga admits that different sectors were poorly funded but he blames this on lack of funds.

According to the recent Census report, Kampala has a day-time population of 3.5m and a night-time population of 1.5m people. They all look up to the services that are provided by KCCA. However, some have never used any service.
When KCCA was rebranded from the defunct Kampala City Council (KCC) in 2011, its first budget allocation was Shs 145b excluding donor funds, on top of a road fund of Shs150b. Its funding in the subsequent years kept rising rapidly. The idea was to change Kampala from a local government model to a better city with a unique status.
Before that, the defunct KCC used to operate at a budget of between Shs 50b and 55b with a road fund of Shs 15b, local revenue of Shs. 30b and government would contribute Shs 25b excluding donor funds. By that time, the highest paid KCC employee was the town clerk with a salary of Shs 1.7m. The Mayor would earn a salary of Shs 2.5 and the councilors earned below Shs 1m. There was a revolution with the advent of KCCA as salaries rose considerably. Ms Musisis, the executive director, earned at least Shs 36m when she was appointed in 2010.

“KCCA greedy”
Lwengo District Chairman George Mutabazi, the head of the Uganda Local Government Association (ULGA), says KCCA people are greedy, arguing that as KCCA enjoyed huge allocations from the central government, districts and other local governments suffered in silence.
Currently the government allocates 16 percent of the national budget to all local governments apart from Kampala City, which is run directly under the President’s Office. The other districts are administered under the ministry of Local Government.
Mr Mutabazi says for the last five years, the allocation to districts and other local governments has been reduced and that it’s meant to farther reduce to12 percent, something he says affects service delivery.

He says that majority of the districts can’t even manage to raise local revenue but government has enhanced their funding.
He accuses KCCA of being inconsiderate to other sectors yet they have an opportunity of collecting revenue from the many businesses in the city.
The Kawempe Division Mayor, Mr Emmanuel Sserujongi, however, says that despite a few projects that KCCA has done in the city, a lot is still needed. He argues that although KCCA’s establishment was to revamp the city, it hasn’t done much due to limited funding. He gives an example of Kawempe, saying that all the construction of all roads therein has since been halted because of low funding. This challenge, Mr Sserunjogi says, is faced by other divisions in the city.
With this outcry, a select committee led by the Nakawa Member of Parliament, Mr Micheal Kabaziguruka, has been set up to engage Ms Kamya on how she could ask for a higher budget for Kampala. She is yet to brief them on her proceedings regarding the same.

It should be noted that since KCCA’s establishment, there has never been the Public Accounts committee (PAC) to examine the audit reports regarding the operation of the institution. There has been immense speculation about misuse of funds at KCCA.
On February 9 as the new PAC team was being sworn in at City Hall, the KCCA director of internal audit, Mr Moses Bwire, said the absence of this accounting body has had an effect. He noted that there is a backlog of audit reports, which he says must be examined by the new team.
According to Section 58 (9) of the KCCA Act, the Committee shall examine the reports of the Auditor General, Chief Internal Auditor and any reports of commissions of inquiry and may, in relation to the reports, require the attendance of any councillor or officer to explain matter arising from the reports.