Government overshoots January spending by Shs71 billion

Monday March 11 2019



Finance minister Matiya Kasaija. FILE PHOTO

Finance minister Matiya Kasaija. FILE PHOTO 

By MARTIN LUTHER OKETCH

Government overshoot its budget spending by at least Shs71b in January, driven by increased pressure on recurrent expenditures such as debt refinancing, budget supplements and purchases of goods and services, among others.
According to the Ministry of Finance Economic Performance report for January, government spent Shs1.286 trillion instead of the planned Shs1.215 trillion.

“Expenditure exceeded programmed amounts by 6 per cent, despite wages, salaries and interest payments being lower than programmed. Development expenditure [on things such as roads, energy and other infrastructures] was 20 per cent lower than programmed,” the report released last week indicates.

During the month, according to the report, government spending on wages and salaries stood at Shs356b lower than Shs370b.
The report indicates that there was a huge underspend on external development, which stood at Shs326b compared to a huge overspend on domestic development of Shs148b.

Net repayments on loans and other credit facilities, according to the report, was also lower than planned standing at 26 per cent, much of which went to financing hydro power plants in the month under review.

The report also indicates that overall revenue mobilisation and grants were 10 per cent below expected, causing a deficit of Shs615b during the period.

However, local tax collections registered marked improvements with direct taxes such as PAYE, among others, collecting 104 per cent out of planned targets while indirect taxes such as VAT mobilised 96 per cent. Trade taxes recorded over and above targets, pooling 103 per cent.

Fees and licences mobilised 123 per cent over and above target levels due to improvements in Stamp Duty and embossing fees.
Non-tax revenue segments such as passport, migration, and Uganda Registration Services Bureau fees performed over and above targets.

However, grants were lower than planned. Only 4 per cent was realised.
Government also spent heavily on clearing external and domestic debt much of which were accumulated through Treasury Bills and T-Bonds.

Repaying debt
During January, according to the report, government borrowed Shs1.148 trillion from the domestic market, of which Shs594.14b was raised from Treasury Bills and Shs554.23b from T-bonds. Securities worth Shs412.64b were issued to refinance maturing debt.

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