Finance orders new Budget cuts, no money for seminars

Ministry of Finance has put into effect the budget cuts proposed by Gen Salim Saleh, the head of Operation Wealth Creation (OWC).

The cuts take effect in the first quarter of 2020/2021 Financial Year (FY) according to the circular issued by Mr Keith Muhakanizi, the Permanent Secretary/Secretary to the Treasury.

Daily Monitor has obtained a copy of the July 9 circular and addressed to all accounting officers.

The budget cuts affect travel abroad, workshops and seminars as well as training.

Items such as rent, utilities, salaries, pension, and gratuity as well as verified arrears will take first priority, in what the government perceives as a measure to stimulate the economy following the devastating effects of the Covid-19 pandemic and the resultant lockdown.

All ministries, agencies and departments are directed to stick to the guidelines regarding expenditure limits for the quarter that runs from July to September, and only entities with approved accounting officers will receive money.

“The expenditure limits are based on the government annual cash plan adjusted to take into account projected revenue performance during 2020/2021 due to the effects of Covid-19 on the overall economic growth and revenue generation,” reads Mr Muhakanizi’s circular.

“The limits have also taken into account some of the supplementaries approved by Parliament last financial year but not released,” adds Mr Muhakanizi.

He directed accounting officers to ensure prompt payment, mainly of salaries, pension and gratuity by the 28th of every month.

In June, shortly after Parliament passed the Shs45.5 trillion Budget, President Museveni said Gen Caleb Akandwanaho, aka Salim Saleh, had cited areas for budget cuts that would save at least Shs5.3 trillion.

The directive was followed by a prompt meetings between technical officers of government and officials from OPM, which is headed by Gen Saleh to harmonise the Budget.

To this end, Mr Muhakanizi notes that the circular takes cognizance of discussions held with Gen Saleh’s team.

“As a consequence of discussions with the OWC, to refocus this year’s Budget priorities...consumptive expenditure items such as travel abroad, workshops and seminars, etc, have been suppressed,” Mr Muhakanizi states.

This implies that accounting officers are not expected to release any cash to activities in the category listed in the table for the first quarter.

Necessary review
To address these issue of Budget review, business people, economists, policy analysts and trade specialists, including civil society, last month said the national Budget should be reviewed because it falls short of diagnosing the proper dose for the economic crisis, resulting from the Covid-19 pandemic.

Civil Society Organisations including SEATINI, CSBAG and Uganda Debt Network noted that unlike the previous financial years, the final stages of FY 2020/2021 Budget formulation process were marred with an unprecedented economic shock relating to Covid-19, invasion of locusts and the flash floods that was witnessed in some parts of the country.

This has, therefore, put into perspective the need to review and protise the Budget.

Items to be reviewed

Rent, utilities, salaries, pension and gratuity and verified arrears to take first priority.
Travel abroad, seminars/workshops and training not to be funded.

Non-Wage recurrent expenditure for public universities is fully catered for.

One-half of annual budgetary provisions for missions abroad.

Only entities with approved accounting officers to receive money.

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