Winners, losers in public spending cuts

President Museveni is set to acquire a new vehicle fleet among other benefits even as key ministries, departments and agencies or MDAs face deep cuts in next financial year’s budget. 
In their report on the Budget Framework Paper (BFP) of 2023/2024 for the Office of the President, the parliamentary Committee on Presidential Affairs has greenlit the expenditure that the Finance ministry had initially shelved.   

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Several MDAs will have to contend with the 40 percent budgetary cuts, with Mr Ramathan Ggoobi—the Secretary to the Treasury—saying this week that the cuts are “actually budget repurposing [meant to] move money from certain areas that may be important but not critical to those areas that can’t be postponed.” 
Statistics from the Finance ministry show that the State House budget will reduce by 2.8 percent from Shs434.4 billion to Shs421.8 billion in the next financial year. This is largely down to a “substantial reduction of 40 percent in proposed allocation to the domestic development expenditure category.”

The State House’s wage Bill will, however, increase from Shs22.6 billion to Shs25.2 billion. Elsewhere, Shs57.1 billion has been ring-fenced for refurbishing Entebbe State House; repair and maintain Nakasero State Lodge and the 23 upcountry state lodges; procuring support vehicles; carrying out the annual maintenance of the presidential jet and helicopter; and procuring specialised security and ICT equipment. 
Whereas only Shs21.7 billion had been provided by the Finance ministry, the House committee has recommended that an additional Shs35.4 billion be made available. 

Saturday Monitor understands that from that Shs21.9 billion from that Shs35.4 billion will be used to procure security equipment.
“The committee noted with concern that the current fleet for the principal is aging and failure to provide the required Shs21.9 billion to facilitate procurement of vehicles constrains the role of mobilising masses and leaders for socio-economic transformation and prosperity in all the regions of the country,” the report by the House Committee on Presidential Affairs notes.

Donations, security upgrades
State House requires Shs83 billion to facilitate payment of pending donations by President Museveni. 
A total of Shs53 billion had been provided before the parliamentary committee recommended that the Shs30 billion budgetary cut be removed. The demand for presidential donations, the committee notes, is ever increasing and calls for enhanced allocation.

The Shs8 billion provided to President Museveni as logistical and administrative support for international and regional travels was frozen in the current financial year as an austerity measure. The committee has, however, recommended that the money be released in the coming financial year to “effectively facilitate the President’s efforts of promoting international relations and regional integration.”

The presidency, where State House falls, comprises the Office of the President, the Kampala ministry, Kampala Capital City Authority (KCCA), Uganda Aids Commission, Ethics and Integrity ministry, and the Internal Security Organisation, among other entities.
The committee further noted that the ever-changing security environment with new threats calls for the procurement of upgraded security equipment. The legislators note that transport and security equipment are a critical consideration since they have “a direct impact on the security of the Fountain of Honour.”

Office of the President
The budget of the Office of the President has increased by 14 percent from Shs219.1 billion to Shs250.7 billion. The Office of the President implements activities that fall under the Governance and Security Programme; Development Plan Implementation Programme; and Community Mobilisation and Mindset Change Programme.
Some of the activities under the Office of the President that are lined up to consume the budget, include monitoring the implementation of the NRM manifesto as well as commitments by MDAs through production and dissemination of progress reports. The Office of the President plans to construct 10 offices for the RDCs and renovate three others.

Cost of RDCs
According to the report, the government has deployed Resident District Commissioners (RDCs) in 146 administrative units. Of these 107 are accommodated in rented premises, 24 are housed by district local governments while 15 are accommodated in offices constructed by Office of the President.

The Office of the President has constructed RDC offices in the districts of Lamwo, Abim, Amuru, Kiryandongo, Kamuli, Buhweju, Bundibugyo, Lwengo, Rubirizi, Butaleja, Adjumani, Butambala, Otuke, Luuka and Nakapiripirit at the unit cost of Shs700m with one construction per year.  The House Committee does not query why the cost does not vary per district.
Currently, taxpayers spend Shs1.4 billion per year in rental fees for RDC offices—a figure that experts expect to continue increasing.

Legislators on the House committee want the accommodation of the RDCs to be considered a critical activity and have 10 offices constructed in the coming financial year. They also want this allocation to be maintained in the coming financial years. The committee has recommended that Shs7.2 billion be added to the annual office construction budget for RDC offices. This means Shs8 billion will be provided annually for the activity.
An additional Shs4.5 billion has been allocated for the facilitation of the RDCs. Inadequate facilitation for RDCs to strengthen effective monitoring of government programmes, the committee notes, leads to poor implementation and poor service delivery.

Medals, presidential advisors
In the process of scrutinising the budget, the House committee found that the cash strapped government has run out of medals, including the “Most Excellent Order of the Pearl of Africa” and “Distinguished Order of the Pearl of Africa.” 
Consequently, the Committee has recommended that Shs4.23 billion be given to the Presidency to purchase the medals.

The Committee also recommended that the Presidency be given an additional Shs9.1 billion to “organise investiture ceremonies and also carry out patriotism activities.” This was after it heard that the Office of the President requires Shs8.3 billion to facilitate the presidential advisors in form of office rent and allowances yet only Shs3.2 billion has been budgeted. 
If the committee recommendation is approved, the Presidency will be allocated an extra Shs5.1 billion to “to facilitate the newly-appointed presidential advisors in the form of procurement of vehicles and other operations.”

Last June, President Museveni inaugurated the APEX platform. A mechanism for ensuring that government policies are implemented as directed in all parts of the country, Shs34.1 billion had been budgeted to support its activities. It is, however, understood that Shs4.7b has been provided for in the coming budget. The House committee, however, wants an extra Shs10 billion to be channelled towards support of the APEX platform’s activities.

Manifesto, car tracking
More funds have also been allocated to the Manifesto Implementation Unit and Shs4.37 billion had been allocated to the unit against a budget of Shs5.87 billion. 
Documents seen by Saturday Monitor show that the committee has recommended that Shs1.5 billion be allocated to the entity to “enable [it] effectively monitor the mainstreaming of party manifesto in all MDAs and LGs.”

Per the committee’s recommendation, Shs1.5 billion will be provided to a project monitoring team of the Intelligent Transport Monitoring System. In July 2021, the government signed an agreement with a Russian firm Joint Stock Global Security to implement the Intelligent Transport Monitoring System that is aimed at tracking vehicles and motorcycles with an aim of reducing crime and improving security. A project team was put in place to monitor the implementation of the project for 10 years.

Capacity building
The Presidency has also been allocated Shs1.3 billion for “continuous capacity building for Cabinet members and permanent secretaries.” 
The justification is that the capacity of the ministers and permanent secretaries should not at any one time be “questioned or left wanting, especially in this ever-changing global tide.”
“The Committee identified the need for continuous and regular capacity building for the two categories [ministers and permanent secretaries] preferably on a bi-annual basis so that they are adequately empowered to execute their mandate effectively and efficiently,” the report notes.

The government spent Shs7.9 billion to construct accommodation facilities at the National Leadership Institute at Kyankwanzi. However, authorities at the facility wanted Shs5 billion, more than half of the construction cost, to “maintain facilities and extend their life time.”  The House committee has rejected their request and instead recommended that Shs2 billion be provided for the activities.
Parliament also wants Shs15 billion allocated to the activities of the Afro Arab Youth Council (AAYC) to support the acquisition of land and the construction of the headquarters of the entity.

HIV/Aids fight
Meanwhile, the budget of Uganda Aids Commission (UAC) will reduce by 7.4 percent in the coming financial year from Shs17.9 billion to Shs16.5 billion. The commission is tasked with coordinating Uganda’s HIV/Aids response with emphasis on HIV prevention.
The budget cuts to UAC come at a time when the country is experiencing a surge in new infections. Washington has also informed Kampala that the $400m (Shs1.4 trillion) it gets from the United States in budgetary support to HIV/Aids care and treatment hangs in the balance over the Anti-Homosexuality Bill.

According to the report, legislators were informed that while new HIV infections reduced from 94,000 in 2010 to 38,000 in 2020, they soared to 54,000 in 2022. The lawmakers note that the reversal in the trend speaks to the fact that the HIV epidemic remains a clear and present danger. The committee has recommended an additional Shs8.2 billion be provided to the entity.

Research
Elsewhere, the budget of Uganda Industrial Research Institute (UIRI) has been cut by more than half (53 percent) from Shs25.5 billion to Shs11.9 billion. While the entity’s wage bill has meantime been maintained, its non-wage bill has been cut by 83 percent from Shs12.3 billion to Shs1.6 billion. The entity will not receive the Shs2.8 billion development funds it received from the government last financial year. 

UIRI is tasked with undertaking applied research as well as developing and/or acquiring appropriate technologies in order to create a strong and effective and competitive industrial sector in Uganda.
The House committee has recommended that Shs9.7 billion be provided to the entity to ensure that staff wages and utilities are adequately provided.  
An additional Shs2.1 billion has been recommended by Parliament for the organisation to “undertake product development for textile, cosmetics, ceramic, bamboo, electronic, hygiene, food and beverage products, among others.”

Pornography monitoring 
Meanwhile, the Directorate of Ethics and Integrity (DEI) requires Shs4.2 billion to undertake Anti-Pornography Education, apprehend offenders and rehabilitate people affected by pornography and immoral behaviour. While the Finance ministry had not made an allocation for the funds, the House committee has recommended that the funds be provided.
“The Committee observes that failure to empower the DEI in the fight against pornography and homosexuality in Uganda defeats achievement of the intended cure to the vice of pornography and homosexuality in the country,” the report notes.

Struggling ISO
Although the budget of the Internal Security Organisation (ISO) has been increased by 17 percent from Shs156 billion to Shs182.7 billion, the House committee raises serious concerns at the spy agency tasked with collecting and processing intelligence information on internal threats.
The House committee learnt that ISO has not been able to adequately provide transport (vehicles) for its operations both at headquarters and field stations. The Committee established that ISO has a fleet of 28 vehicles of varying ages and conditions. Most of these are reportedly too old and frequently break down with the related costs of repair and maintenance exceeding Shs2.2 billion annually.

The committee further established that ISO requires 145 motor vehicles to cover all stations in the country. The organisation also has only 1,204 motorcycles of the required 2,252 to cover all GISOs and special operations.
The internal spy agency requires Shs30.4 billion to acquire new vehicles in the coming financial year yet only Shs7.2 billion was budgeted by the Finance ministry. ISO intends to use the Shs7.2 billion to buy 46 motor vehicles at Shs156m apiece.
More cash for Kiira motors
Speaking of cars, Kiira Motors Corporation (KMC) requires Shs80 billion to operationalise the Kiira Vehicle Plant in Jinja, develop an Enterprise Resource Planning (ERP) system and e-Bus Monitoring System. It also intends to use the resource envelope to undertake local manufacturing of key auto parts and systems. 
We also understand that KMC requires working capital for the production of 46 buses to enhance consumer confidence and consolidate production skills and competencies. 

Although only Shs20 billion has been allocated to the entity, Parliament has proposed that an additional Shs20 billion be made available to the organisation to “undertake interventions transiting to commercialisation.”
Recently, Parliament’s Budget Committee rejected a Shs20 billion supplementary request for Kiira Motors Corporation Ltd and directed that the Auditor General undertakes a value-for-money audit into cash advanced to the company over the last three financial years.