Govt freezes travel, cars in budget cuts

The government plans to freeze new loans, hires and pay rise alongside halving spending on workshops and applying brakes on foreign travel for its officials in the new financial year as part of austerity measures to plug funding deficits and reverse rising debt servicing burden. 

This means Ugandans angling for jobs or pay rise in civil/public service will have to wait longer, at the shortest a year, a heart-breaking news that Finance ministry Permanent Secretary Ramathan Ggoobi broke in a week when Makerere University graduated 13,000-plus students. 

In a revised budget call circular issued last Friday, Mr Ggoobi decreed that overseas trips will be bankrolled for only the heads and deputies of the three branches of government - Executive, Parliament and Judiciary - and other officials travelling for critical security, resource mobilisation and case arbitration assignments. 

A budget call circular is an official government document that specifies the framework and technical procedure for preparation, submission of revenue and expenditure estimates for the next financial year.   

According to the circular, government is expected to save up to Shs108.5 billion from the ban on travel abroad, workshops and other non-essential expenditures. 

“I think the budget call circular is one of the kind we have not seen in for quite some time. First of all, it’s really responding to the current crisis we are in and also it is drawing from the lessons of the past, but at the same time it’s addressing the cries of the civil society,” Mr Julius Mukunda, the executive director of Civil Society Budget Advocacy Group (CSBAG) said. 

He added: “We are in crisis because our debt is increasing while our revenues are not increasing at par. So, they came up and said ‘we need to stop borrowing new loans .... I think this is what any sane person should be doing because you are heading to debt trap and you don’t want to arrive there quickly.” 

Uganda’s public debt stands at Shs86.6 trillion as of June 2022, according to the auditor general report for the financial year 2021/2022, and rising. 

“There will be no new borrowing next financial year and this shall continue over the short-to-medium term so as to minimise the share of Uganda Revenue Authority (URA) revenues being used to service debt in the medium term so as to make more resources available to finance critical development priorities of government,” Mr Ggoobi wrote. 

Mr Mathias Mpuuga, the Leader of Opposition in Parliament, during a debate on the budget two weeks ago said: “I implore the executive to revise this budget downwards and make it achievable because you cannot come up with an ambitious budget which you cannot finance.” 

In the revised budget, the government has suspended new non-concessional projects, except those already provided for in the debt framework, and only projects with no direct or indirect claim on the Consolidated Fund will be considered.

“Vehicle purchase is frozen in FY2023/2024 with the exception of the purchase of hospital ambulances, vehicles for medical supplies/distribution, agricultural extension services, security and revenue mobilisation; spending on workshops and seminars shall be reduced by 50 percent …,” the circular reads in part. 

Pay rise is on hold for at least a year, meaning Arts teachers and non-science civil servants promised higher pay the next financial year starting July 1, will not get it but science teachers whose pay was already enhanced will continue to bag it, despite the on-and-off start.

 Doctors under the Senior House Officers who are senior medical officials have since gone on the offensive and said effective today, they will lay down their tools, accusing the government of failing to pay their allowances and improving their working conditions. 

“However, despite providing critical manpower to the hospitals amidst challenges of inadequate medical supplies and sundries, the SHOs haven’t been paid their allowances … with some as far [back] as October 2022,” the graduate doctors noted in a statement, recalling their protracted fight for the pay.

Revised budget 

Despite the freeze on recruitment, pay rise and a range of planned austerity measures, the government has revised 2023/2024 budget upwards to Shs50.8 trillion, but decreased the discretionary resource by Shs3.4 trillion.  

According to PS Ggoobi, Uganda’s economy is projected to grow by six to seven percent next financial year, up from 5.3 percent. 

He warned all the accounting officers to ensure that the detailed budget estimates are in line with the approved budget strategy, the Budget Framework Paper of FY 2023/2024-2027/2028 and the priority areas as directed by the President.

Next financial year priorities

According to the Finance ministry Permanent Secretary, Mr Ramathan Ggoobi, priority investments sectors will include starting the construction of the Standard Gauge Railway and finalisation of the rehabilitation of the Meter Gauge Railway, enhancement of small-scale solar-powered irrigation investments and addressing climate change and food security. 

Building of power service stations and transmission lines and capitalisation of Uganda Development Bank and Uganda Development Corporation, he noted, will be key alongside supporting private sector development, recovery and economic transformation.  

The government will also prioritise spending on security, peace and governance, health, education and provision of water, road maintenance, social spending and investments in oil and gas, among others.

BUDGET CYCLE

August-September 

• Local government budget consultations held 

• Issuance of first budget call circular

• Presidential Advisory Committee discusses the budget

• Ministries, Departments and Agencies (MDAs) prepare and submit consolidated annual statements to Ministry of Finance, and Accountant General.

 October - November 

• Sector Working Group Budget consultations

• Inter-ministerial budget (technical and policy level) consultations 

• Submission of Sectoral Budget Framework Papers by November 15 

• Holding of national budget conference 

December

• Submission of the Budget Framework Paper (BFP) to Parliament 

• Meeting with the President on BFP

 February

• Parliament approves BFP

• Parliamentary committee consultation on BFP

• Issuance of second BFP circular

 March

• Presentation of ministerial policy statements to Parliament

 April

• Annual budget and tax bills presented to Parliament

• Holding of meeting of Finance ministers of East African Community (EAC) member states 

• Submission of proposed accounting officers to Parliament

 May 

• Approval of proposed annual budget

 June

• Presentation/reading of budget in Parliament 

• Issuance of budget execution circular