The government is financially stuck and spending is now being allocated to priority areas, the Finance Minister has confirmed.
A day after this newspaper reported that government operations were coming to a stall barely six months into the new financial year and days after passing a Shs602b supplementary budget, Ms Syda Bbumba yesterday admitted that all government agencies had been put on notice about the serious cash flow problem.
“The Secretary to the Treasury has issued a communication to all ministries and agencies informing them about the cash limitations,” Ms Bbumba said.
Ms Bbumba admitted that while the government’s financial handicap had left several agencies stuck, a process was underway to re-allocate funding for priority activities.
“It is true we have a cash limitation but it is not abnormal. It normally happens,” she said. “We normally do budget allocations and re-allocations and that is what we are doing.”
Gulu University is one such entity that is currently facing the brunt of the government’s financial troubles.
The vice chancellor, Dr Jack Nyeko Pen’ Mogi, on Saturday warned that the institution might not open for the new semester because of inadequate government funding.
Of the Shs1.1 billion budget handed to government this year, only Shs333 million has since been sent to the university to fund operations, a matter Dr Pen’ Mogi said is a recipe for disaster.
“We have written a letter to the Education Ministry and we will not open the university for second semester if government does not add more money,” he said at the university’s 6th graduation ceremony. “We fear students will end up stoning us as they also have to get their living-out allowances out of the same money among other things.”
Ms Bbumba said she did not find it odd that government had run out of cash barely six months into the financial year and admitted that preparations for next month’s general election had taken a toll on the budget process.
“This is an exceptional year because of the election,” she said. “We have had to put a lot of money in the Electoral Commission and other related election activities. This is not a normal budget activity.”
The government has so far released Shs119 billion to the Electoral Commission for February’s general election even though the electoral body insists it needs Shs55.7 billion more, a figure that dwarfs the total cost of the 2006 election. Government spent at least Shs69 billion organising the country’s first multiparty election in two decades. Ms Bbumba did not state how much had been allocated for the election-related activities this time round and offered no further comment on the matter.
However, her comments follow reports that most of the money in the budget was reportedly diverted to fund political campaign activities.
Additional reporting by James Eriku & Sam Lawino