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Budget Framework Paper gets red flag

The Shadow Finance minister Mr Ibrahim Ssemujju Nganda

What you need to know:

  • The 2025/2026 budget will serve as the first year of implementation of the newly processed NDPIV. The budget will run under the theme Full Monetisation of Uganda's Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access.

MPs considering the 2025/2026 National Budget Framework Paper (NBFP) faulted the government on Thursday for drafting a dodgy financial plan. 

The country’s budget wonks were called out for failing to rework the draft Shs57.4 trillion budget to cater to changes wrought by the suspension of United States foreign aid.

Mr Ibrahim Ssemujju Nganda, the Shadow Finance minister, used his minority report to draw attention to what he considered superfluous expenditure. The tabled draft budget estimates showed that only Shs200b is lined up to partially clear domestic arrears.

“Money government owes ordinary people, commonly known as domestic arrears, hit Shs14 trillion last financial year. It increased by 30 percent from Shs10.8 trillion of the year 2023/2024, and, guess what, they have allocated a paltry Shs200b in the budget to cater [to] domestic arrears,” Mr Ssemujju said. “These arrears include Shs250b in gratuity and pension. You have seen old people shed tears on television because of their unpaid pension and gratuity. Some people of Museveni’s age die before receiving their pension.”

The Shadow Finance minister also noted that while Parliament revised the budget for Financial Year (FY) 2023/2024 to under Shs62 trillion, the Auditor General indicated that only Shs50 trillion was released to the Finance ministry.

“[The Ministry of] Finance never released Shs11.498 trillion. And the release itself was hot air because only Shs48.580 trillion was available for spending,” Mr Ssemujju said, adding, “In 2022/23, the total budget approved was Shs52.548 trillion. Shs49.226 trillion was released, but the actual money available for spending was Shs43.404 trillion. The actual money mobilised for spending is still under Shs50 trillion.”

The Shadow Finance minister has since come to the conclusion that Uganda works with a budget of under Shs50 trillion or thereabouts. The revelation infuriated several MPs, with Ms Gorreth Namugga (Mawogola South) calling for reforms. “It is highly consumptive,” she said of the budget, adding, “We have 80 percent to be spent on wage and non-wage and only 20 percent on capital development. How do we sit here to plan for only 20 percent?”

The NBFP forms a sketch or draft document that paints a picture of what is expected of the probable final shape of the National Budget upon which the incoming financial expenses are premised. 

Mr Ssemujju’s minority report found the NBFP to be inconsistent with sections of the Public Finance Management Act (PFMA), 2015. It was deemed inconsistent with the Fourth National Development Plan (NDPIV) as well as the Charter Fiscal Responsibility (CFR).

“The BFP does not provide the nominal debt projections for FY2025/2026 restricting the committee’s assessment of the compliance of the BFP to the CFR in relation to total Public Debt as a percentage of GDP in the medium term,” Mr Remigio Achia, the vice chairperson of the House Budget Committee, revealed on the floor of Parliament.

The 2025/2026 budget will serve as the first year of implementation of the newly processed NDPIV. The budget will run under the theme Full Monetisation of Uganda's Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access.

“We have noticed the inability of government agencies to implement projects on time and with the budget which has been costly to the taxpayer,” Mr Julius Mukunda, executive director of Civil Society Budget Advocacy Group (CSBAG), said while referring to the 2022/23 Auditor General Report.

Mr Mukunda said government should create a strict framework system through which State-funded projects are monitored.

“The government should prioritise borrowing for high-return projects. Prioritising projects that can generate revenues and spur economic growth will help improve Uganda’s capacity to repay loans such as energy, agriculture and industrialisation,” he advised.