Government yet to spend half of national Budget at mid-year

Finance minister arrives to read the 2014/15 financial budget in June last year. Government has so far spent Shs5.6 trillion, according to the Finance ministry half year performance. FILE PHOTO

What you need to know:

Unutilised. Wage performance absorption is lowest with unspent funds.

Kampala. About Shs5.6 trillion has been spent by government departments out of the approved Shs15 trillion Budget for this financial year (2014/2015).
According to a statement released by the Ministry of Finance on its half year expenditure performance, Shs6.3 trillion was released to government institutions, making up 41.9 per cent of the approved Budget.
“Out of the total funds released, 88.94 per cent was spent, amounting to Shs5.59 trillion,” the statement reads in part.
However, the Shs5.6 trillion so far spent out of Shs15 trillion show that government has not even used half of the budget funds meant for the financial year.
This brings a case of low absorption of funds meant to be spent.

Expenditures
In terms of total expenditure, Shs1.26 trillion was spent on wages, Shs2.53 trillion on non-wages and Shs1.8 trillion on development capital.
However, the statement shows wage performance absorption remains lowest at 84.8 per cent with unspent funds amounting to Shs224 billion compared to non-wage recurrent expenditure at a highest absorption rate of 93.6 per cent.
Commenting on the half year expenditure performance, the permanent secretary ministry of Finance and Secretary to the Treasury, Mr Keith Muhakanizi, said there has been an improvement in the implementation of government programmes as planned in the Budget.
Explaining why there are unspent funds, Mr Muhakanizi said: “Sometimes, procurements by various government institutions start late so we let them keep with the unspent funds up to the end of the financial year.”

Analysts on how the money has been spent

Dr Fred Muhumuza, an economic analyst, said having a low absorption of wage expenditure at 84.8 per cent implies that wages were not paid. “Low wage absorption implies that some government institutions set aside funds to recruit or hire services but the money was never paid for one reason or another,” he said.
In terms of revenue, the statement shows that domestic financing, stands at Shs12.51 trillion, external financing at Shs2.74 trillion and Appropriation in Aid at Shs568 billion.
Ms Jane Nalunga, the country director, Southern and Eastern African Trade, Information and Negotiations Institute said: “My interest is trade, but when you look at the amount given to the Trade ministry, it is very little.”
She added: “We continue to import more than what we export so the ministry of Trade should be key if we are to trade ourselves out of poverty.”
Balance of payments figures show a deficit of Shs5 trillion was recorded as the current account balance.

Numbers

Shs15 trillion
The approved national Budget for the financial year 2014/15.

Shs6.3
Trillion
The amount of money that was released to government institutions.

Shs5.6 trillion
The amount of money that the government has so far spent.

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