Govt expenditure for October falls short of target - report
Finance Minister Matia Kasaija (centre) arrives at Kololo Ceremonial Grounds for the 2023/2024 National Budget reading on June 15, 2023. PHOTO/DAVID LUBOWA
What you need to know:
- The total government expenditure amounted to Shs2.810 trillion, against a planned expenditure of Shs3.289 trillion.
Government expenditure for October 2024 fell short of its target, according to the economic performance report released by the Ministry of Finance, Planning and Economic Development. The total government expenditure amounted to Shs2.810 trillion, against a planned expenditure of Shs3.289 trillion.
"This lower-than-planned spending was largely attributed to lower absorption of funds by Central Government votes," the Ministry explained. Delays in the payment of wages and salaries of the judiciary, health sector, and prison services in October 2024 also contributed to the shortfall.
"Additionally, the purchase of goods and services, expenditure on social benefits, and other expenses were below their respective targets by Shs332.02 billion, Shs14.87 billion, and Shs349.71 billion respectively," the Ministry noted. However, grants to other General Government units exceeded their target by Shs348.77 billion.
The report also revealed that the government's fiscal operations resulted in a net borrowing of Shs1.024 trillion, which was lower than the planned borrowing of Shs1.994 trillion. This variance was primarily due to lower-than-expected disbursements of externally financed projects.
"The lower-than-expected disbursements of externally financed projects were mainly due to delays in the implementation of some projects, as well as lower-than-expected loan disbursements from some development partners," the Ministry explained.
In terms of revenue collection, the Ministry reported that total revenue collections in October 2024 amounted to Shs2.316 trillion, against a planned target of Shs2.614 trillion. This shortfall was largely driven by lower-than-anticipated performance of grants and tax revenue collections.
"Specifically, a slowdown in imports resulted in a shortfall in taxes on international trade amounting to Shs22.30 billion. Additionally, taxes on goods and services registered a shortfall of Shs11.85 billion mainly due to slowdown in production and sales of beverages," the Ministry explained.
The Ministry also reported that the net acquisition of non-financial assets during the month of October 2024 amounted to Shs530.43 billion, which was lower than the planned expenditure of Shs1.320 trillion. This underperformance was largely due to limited capacity to absorb foreign disbursements by Ministries, Departments, and Agencies.
"The limited capacity to absorb foreign disbursements was mainly due to delays in the implementation of some projects, as well as lower-than-expected loan disbursements from some development partners," the Ministry explained.
The Ministry of Finance, Planning and Economic Development noted that the government is taking steps to address the challenges that led to the underperformance in October 2024.
"We are working to improve the absorption capacity of Ministries, Departments, and Agencies, as well as to expedite the implementation of externally financed projects," the Ministry said.
The government is also taking steps to improve revenue collection, including strengthening tax administration and improving compliance.
"We are committed to improving revenue collection and ensuring that the government has the resources it needs to deliver public services and implement development projects," the Ministry said.
