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Will budget answer Uganda’s Vision 2040? 

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Mr Ramathan Ggoobi, the permanent secretary at the Ministry of Finance, says planned expenditure will support  growth of the economy ten -times, hence Vision 2040 is still achievable. PHOTO/ FILE

In just a  few days, the government will present the bloated Shs72 trillion national budget, detailing its expenditure priorities for the financial year 2024/25.
Proponents of the National Budget say that this year’s budget still aims at transforming Uganda from a predominantly peasant and low-income country to a competitive upper middle-income country with key areas including services, manufacturing, agriculture and ICT. 

Technocrats also say the budget is in line with the country’s National Development Plan (NDP) III and Vision 2040, whose objectives are human capital development and putting money into citizen’s pockets.

Mr Willis Bashasha, director Manifesto Implementation Unit, says Uganda Vision 2040 offers the overarching leadership and policy direction for employment creation and priority setting in line with National Resistance Movement’s (NRM) promises over the years. 
He further explains that Vision 2040, aligned with the NRM Manifesto, emphasizes leveraging the demographic dividend of the youth and advancing agricultural development.

“The NRM Manifesto promised creating wealth and jobs; delivering education and health; ensuring justice and equity; protecting life and property and achieving economic and political integration,” Mr Bashasha explains. 

Adding: “While Vision 2040 entails Ugandans having improved infrastructure and services, modern technology to improve production; we also aspire to have access to clean, affordable and reliable energy sources to facilitate industrialisation.”

Budget into Vision 2040
Mr Ramathan Ggoobi, the permanent secretary at the Ministry of Finance, says planned expenditure will support the growth of the economy ten -times, hence Vision 2040 is still achievable.
He explained this recently during the launch of Budget month for the FY 2024/25 saying the budget prioritises key growth drivers such as agro-industrialisation, tourism and mineral-based industrial development.

Others include oil and gas, and science, technology, and innovation, supporting economic growth tenfold, according to the Permanent Secretary.

“The government is developing the NDP IV for FY 2025/26 to FY 2029/30, focusing on economic recovery, wealth creation, and import substitution,” he says.
Further elaborating; “There will be measures including fiscal consolidation, increased domestic revenue mobilisation, and allocative efficiency as outlined in the NDP III and Vision 2040.” 
He added: “The ten-fold economic growth agenda aims to grow the economy from $49.5 billion in FY 2023–2024 to $500 billion in 15 years with an overall improvement of livelihoods.”

How targets will be achieved
The record Shs72 trillion budget that Parliament enacted last month stunned everyone, not only because of its enormous amount but also its increment by around Shs20 trillion over the budget for FY 2023/24. The primary concern was where the money would come from.

Mr Ggoobi was quick to explain that key priority areas in the Budget for FY 2024/25 include: investing in the people through human capital development and wealth creation initiatives were extensively catered for.
Key among them are the Parish Development Model (PDM), Emyooga, Agriculture Credit Facility, Microfinance Support Centre, and State House youth support projects commonly known as presidential initiatives.

Finance Minister Matia Kasaija says in FY 2021/22, about 7,855 PDM Saccos in 151 local governments were capitalised with Shs72.192 billion. 

Finance Minister Matia Kasaija. PHOTO/FILE

He further explains that in FY 2022/23, more than 10,585 PDM saccos were fully capitalised with Shs .0585 trillion and in FY 2023/24, another 10,583 PDM Saccos have been capitalised as of April 2024 with Shs 50 million each.
“Balance of Shs 50 million to be transferred in May 2024 Arrears from previous financial years shall be provided to the PDM Saccos in later years, subject to availability of funds,” he explained.

Mr Kasaija also explained that the NRM government implemented a presidential initiative on wealth and job creation with focus on Emyooga where 18 specialised enterprises through savings. 
“An apex Emyooga Sacco for each specialised enterprise is formed at the constituency level but with operations at the parish level, each is eligible to receive Shs30 million as seed capital,” Ms Kasaija says. 
Adding; “As of FY 2022/23, the government has since sent funds to MSC totaling to Shs480 billion for the benefit of Emyooga  SACCOs and at least Shs76.3 billion savings have so far been mobilised.” 
Going forward, Mr Ggoobi says that the government will allocate Shs1.059 trillion for PDM, also there will be an increase in focusing investment in innovation.

“We are also revamping the road network; the standard gauge railway (SGR) concentrating in Kampala, Mukono and Gulu- Tororo to ease the movement of merchandise,” Mr Ggoobi explains.

Both the Vision 2040 and NRM Manifesto give infrastructure priority. PHOTO/FILE

Are the targets achievable? 
This budget comes at a challenging time, as the nation faces difficulties in raising funds amidst a decline in external grants and soft loans.
Mr Bashasha admits that although the budget is crucial for realising the NDP and the Manifesto, the availability of resources can, at times, impede the Manifesto’s implementation.
“The Manifesto sometimes can be fulfilled, because some of the commitments are high cost which is beyond our resource envelope hence we end up borrowing,” he says.

Further explaining that initially, the government assumed it could finance its commitments, but challenges have since arisen. 
“From the assessment of 2023, NRM’s manifesto implementation had reached 35 percent in the meantime around 45 percent is work in progress and if all concluded and commissioned Manifesto implementation would be at 80 percent,” Mr Bashasha says.

Experts’ take 
Mr Richard Ssempala, a lecturer at School of Economics, Makarere University, says the budget should be the driver of what the country intended to achieve and every year, it should be in line with Vision 2040.

He explains that both the Vision 2040 and NRM Manifesto give infrastructure a priority but who finances the projects?
Mr Ssempala explains that where debt is involved, Uganda needs to be cautious.
“If we haven’t mobilised our revenues well, then we are likely to face challenges in future. If there is corruption that would lead to substandard infrastructure that damages before expiry time, this would be frustration in achieving the Vision 2040,” he says.
Adding: “Shs72.130 trillion was approved for FY2024/25, but where is that money coming from? We might fail to meet Vision 2040 because of the low domestic collection and dwindling donor funds.”

Mr Ssempala says Uganda should be realistic, plan for the available resources, and use them efficiently. Corruption and huge administrative costs should be addressed.
“The Manifesto is good but the main document should be the Vision 2040; any government that comes with their Manifesto should be able to fit in the big document of Vision 2040,” he explains.

Dr Brian Sserunjogi, research fellow at Economic Policy Research Centre (EPRC), says Vision 2040 aims to transform the economy from subsistence to a middle-income earning per capita of $9,500  (Shs36 million) per person.
 “The way the budget is appropriated would lead us to Vision 2040. But there is a need for financing, as a country we need to be more frugal to reach the Vision 2040; the key programmes need more money,” he says.

Dr Sserunjogi says the challenge is that the financing landscape is becoming harder; commercial loans are becoming expensive, access to concessional loans is becoming hard and our domestic tax mobilisation efforts are low.
“My major concern is not the budgeting or the Manifesto, but we need fiscal discipline; the additional Shs14 trillion of what had been budgeted shows budget indiscipline; we are also weak in public projects management,” he says.

Dr Sserungogi further explains that weaknesses include starting projects that are not planned well, borrowing and paying interests when projects have not started.
“Parliament should be able to check the executive to avoid additions-supplementary budgets, there is also a need to mobilise taxes, improve tax administration and Vision 2040 can be achieved,” he says.

Mr David Walakira, the executive director, Centre for Budget and Tax Policy (CBTP), says the only item that will be delivered as per the NRM manifesto is security. 
“Governance is still elusive as corruption has so far achieved being a top chat but with no tangible actions to stamp it out of wherever we know it to be,” Mr Walakira explains.

“The programme that took a sizable bite was Integrated Transport Infrastructure and Services of which some of the portion is borrowed, if the external funds do not come through or get delayed, like they often do,” he says.