Shadow Finance Minister and Kira Municipality Member of Parliament Ibrahim Ssemujju Nganda. PHOTO/MICHAEL KAKUMIRIZI
Why is there a disparity between the opposition and the government budgets?
The government inflates the budget to create an impression that the economy has grown and that Uganda Revenue Authority (URA) will collect more taxes, while we shall also get willing lenders to fulfill the other part.
However, the previous years have shown that tax collection only grows by Shs1 trillion to Shs2 trillion yearly. Therefore, URA has never met its target, even when it has been increased to Shs37 trillion this year.
Moreover, in subsequent government documents, including the strategy for borrowing, money is unavailable even in the international market. The reports indicate that international leaders are now focusing on their own economies because, for instance, the international trade disorganisation brokered by the Trump Administration has left many fearing shocks in their own economies.
However, the public needs to take note of the Finance Ministry's language of warrants as we are running a single account. This is where ministries, departments, and agencies are authorised to incur costs, such as purchasing stationery from suppliers on debt. That has partly grown domestic debt to the tune of Shs11 trillion because the government does not have money.
Therefore, sometimes, the warranted budget is about Shs48 trillion, and the budget is Shs58 trillion. Summarily, this economy cannot generate Shs37 trillion in taxes.
What priorities do you think will spur this economy to grow?
In Uganda, 62 percent of the population is involved in agriculture, yet the budget allocation is a meagre Shs2 trillion of the Shs72 trillion budget. However, to spur economic growth, we must make substantial investments in key priority sectors of agro-processing, tourism, ICT and mineral extraction, we need to invest heavily into them.
That is what Dubai did when they outlined Trade, tourism, and transport as the main sectors, birthing Emirates, Fly Dubai, and Etihad.
But in Uganda, crucial sectors are starved of funding, and what is allocated is not followed by the right tools of work, hence paying wages for no work.
That is why Atiak Sugar factory stands with no cane to feed it, while the Soroti Fruit factory outsourced its mangoes from Kenya. Therefore, rather than prioritise countries such as Kenya, which can also produce milk, or South Sudan and the Democratic Republic of Congo (D.R.C), which have a poor Gross Domestic Product (GDP), we should look at becoming the Middle East food basket. That calls for deeply investing in the agricultural sector and reaping just like Pakistan, which earns Shs100 million from selling mangoes to Dubai alone. That is better than exporting house helps because, for instance, Saudi Arabia makes $1b from petroleum sales, and they have no sources of food.
What do you think is driving Uganda into debt? Lack of proper planning or unproductive expenditure?
Honestly, National Resistance Movement (NRM) technocrats and ministers borrow for fun because we are not embarking on projects for which we have borrowed, yet this unused debt is accruing high commitment fees. For example, one of the Auditor General’s reports showed that we have borrowed up to Shs14 trillion, yet it is sitting on accounts.
One of the debts was the $300m (Shs1 trillion) from the African Development Bank to construct the Jinja Expressway/ southern bypass from Munyonyo to around Nambole. However, the money has been sitting on an account for the last two years. That is the same with lots of money borrowed from China, our biggest lender.
Additionally, Finance Ministry reports show that we have borrowed money for road projects without doing visibility studies, design, or completing passage compensation. This is a repeated occurrence, and one wonders if these people do not need mental rehabilitation.
Human resource is another issue. I propose that we adopt what Kenya did, employing more of technical than support staff because we have Shs8.5 trillion of our budget catering to wages as one minister has almost 20 people working under them as support staff.
Another case is where we have 650 resident district/city commissioners, assistants and deputies, yet entities such as Mulago National Referral Hospital are working with a meagre 49 percent staffing. That is not forgetting that several technical staff lack the tools to do their duties, only waiting for a monthly salary. Sadly, the president speaks of investors bringing jobs, yet most of these give jua-kali jobs as the pay is meagre, hence, barely contributing to economic growth.
The other aspect is where 46 percent of our budget is debt servicing, yet the debts include those of Pinetti, Roko, Magola, Atiak and even Mubajje. That is not forgetting the D.R.C looting case (Shs1.1 trillion), yet those who plundered the country are not implicated at all.
Until we get the priorities in the Budget right, transforming this economy will remain a slogan.
What key sectors need more funds to fuel economic development?
A study showed that if we invest in coffee alone, Uganda can sell coffee worth more than $10 billion (Shs36 trillion), which will be more than Shs37 trillion annually. With this investment, we could grow like Vietnam did from 500,000 bags of coffee at independence to over one million bags today.
But in the budget, Salim Saleh has Shs21b under Operation Wealth Creation for supervision, even when he is doing politics in Northern Uganda. One wonders if he will lay the nursery beds or supervise people ploughing plantations.
It is also crucial to make credit available, affordable and well-scheduled for those involved in agriculture, more so large-scale farmers. It is also imperative to move water around because many Ugandan farmers depend on rain instead of investing in irrigation. This will help prevent a repeat of situations like those during the COVID-19 lockdown, when we had to import maize from Malawi and Zambia due to local shortages.
I also disagree with the handout formula in the name of spurring agriculture in the villages. That is why, in the past, Uganda Commercial Bank was forced to have a branch all over Uganda – to ease credit access while teaching them to respect it.
However, according to the Uganda National Bureau of Statistics, the Parish Development Model (PDM) was rolled out with 70 percent information collection at the President’s command, hence unaware of the real people to give the money. But we have spent Shs3 trillion on PDM yet beneficiaries are only 800,000 instead of the intended 3 million, and accountability is tough.
To improve this, have the appropriate human resources and don't create an impression that there is free money by having an access criterion and follow-up. That is how you motivate the population to work.
We have a mismatch between the stated policy and resource allocation. We should put people in projects that work, supervise them, put extension workers to inspect farms before planting, after planting, and throughout.
How different would your government have been in handling the Budget?
While we have the right policy, there is a problem with implementation. For instance, while ICT is not a bad policy, why put someone like Dr Chris Baryomunsi or Owekitibwa Ssebugwawo in these sectors, yet they could better work elsewhere?
You cannot pick someone without the knowledge, experience, or interest in a sector and think they will deliver.
That is also seen in loan negotiation, where while the Chinese bring 28-year-old graduates who are computer literate to the negotiation table, we have Matia Kasaija, who is sleeping off. The next thing you hear is that we need to renegotiate the loan. What were you doing to get it right from the first instance?
Where do you think saving can be done?
In the previous Budget, I proposed to Parliament giving areas that amounted to about Shs5 trillion. For instance, we have about 960 billion for inland travel, plus Shs300b for workshops and seminars, and meetings. Yet most of the accompaniments given during meetings piled up as waste. Therefore, I advised that we scrape this off because we are capable of providing our breakfast.
The other aspect is buying cars, for say, commissioners who get a Shs25m salary, as if they cannot afford them. This can be used in the critical sectors, hence creating employment opportunities. That is why I proposed a zero fleet because while the Minister for Public Service, Muluri Mukasa, provides money for car servicing, he does not know how many cars they have.
So, the budget priorities are wrong despite having the right policies. That is because the proposals are not taken up, as they need financing. Yet one wonders if buying fighter jets surpasses constructing roads. The maintenance budget would reduce if cars drove on well-maintained roads, not forgetting improving people's productivity as traffic jam would reduce.
How would you tackle corruption in the budget-making process?
The most fatal corruption is official corruption, where we, Parliamentarians, allocate money to ourselves, never accounting for it, even per diem for workshops where nothing is done. The other is the clothing allowance of about Shs200b.
In this budget, the President has allocated Shs1 trillion to his office, with Shs500 billion classified although the State House is already covered under the Presidential, Vice President, and Prime Minister’s Emoluments Act. Additionally, the size of the presidential convoy remains excessive, especially when compared to others who use only four vehicles.
According to the Inspector General of Government report, much of the Shs9 trillion lost to corruption stems from official corruption. Before addressing theft in procurement, we must first confront corruption at the highest levels of government .So, before tackling theft in the procurement process, let's deal with official corruption.
How will you increase the tax base?
The issue with our tax base is not just about registration because URA shows four million registered people, but only about a million are active. Yet that number is so misleading because while people have a Tax Identification Number (TIN), it was only because they wanted to transfer a car or buy property, and nothing more.
Looking at Pay As You Earn (PAYE) numbers, the direct taxpayers are few because the National Social Security Fund (NSSF) shows that while two million are registered contributors, only 800,000 are active. So, the base is already narrow.
Uganda’s tax-to-GDP ratio has hovered between 11 and 14 percent. Yet government has always aimed for at least 17 percent. But that’s just not possible when most of our people are poor. So, before we talk about expanding taxation, we must grow incomes - people must earn before they are taxed.
While agriculture has been exempted because the poor are involved, we must differentiate subsistence from commercial farming. If someone is running a farm that sells produce internationally, they should pay taxes. So, we need to encourage commercial agriculture, grow our industries, and formalise informal businesses. Only then will we see a true increase in the tax base.
We are overtaxing the few, and annually, we propose new taxes on beer, airtime, and petroleum, because these are easy targets. But it is not sustainable. You can’t keep raising taxes on a few. Eventually, they break, as we saw Shoprite which closed shop.
So, to grow the tax base, we need to grow the economy. With more jobs, more industries, we shall have more people earning real money.
We need to stop formalised theft in revenue collection. Otherwise, even the little we collect leaks away.
