Every Shilling Counts: Citizens' Perspectives on the National Budget Frame work Paper FY2014/15

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Citizens perspectives on the National Budget Framework Paper FY 2014/15

Civil Society Budget Advocacy Group

EVERY SHILLING COUNTS

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Every Shilling Counts: Citizens perspectives on the National Budget Framework Paper FY 2014/15, was produced by the Civil Society Budget Advocacy Group (CSBAG) and presented at the Civil Society Pre- Budget Dialogue FY 2014/15. The contents of this publication are the responsibil-ity of CSBAG and not of our development partners.

© APRIL 2014

Civil Society Budget Advocacy Group (CSBAG)P.O. Box 660, NtindaPlot 15 Vubya Close, Ntinda Nakawa Rd Fixed Line: +256-41-286063, Mob: +256-755-202-154E-mail: [email protected] Web www.csbag.org

@CSBAGUGANDA CSBAG/Facebook.com

All rights reserved. No part of this publication may be reproduced, or reprinted in any form by any means without the prior permission of the copyright holder. CSBAG encourages its use and will be happy if excerpts are copied and used. When doing so, however please acknowledge CSBAG.

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It is with pleasure that I share with you the Citizens’ Perceptives on the National

Budget Framework Paper FY 2014/15. It has been a great milestone for the Civil

Society Budget Advocacy Group (CSBAG) to have successfully consulted all our

53 member organizations, and our districts of operations to make contributions

towards this publication. My special thanks to the women and men from all the

regions of Uganda who attended the Pre-Budget Dialogue at Uganda Manufacture’s

Association (UMA) Conference Hall on 15th April 2014. The debate at this meeting

was enriching as citizens got an opportunity to hear from their leaders, Members

of Parliament and Government Technocrats on how the proposed budget for FY

2014/15 will address their needs.

This publication serves three major purposes;

1. It provides citizens’ perspectives on the National Budget Framework Paper

FY 2014/15. We believe the concerned Government Ministries will integrate

these concerns in their Ministerial Policy Statements and Budget for FY

2014/15

2. It provides critical areas of concern that government can address to improve

service delivery and welfare of citizens, and thirdly

3. It takes stock of what positive changes the Government has made to improve

budget efficiency and effectiveness.

This publication is intended for policy makers especially Members of Parliament to

understand and get alternative Policy options on how government resources can

be mobilized, allocated and utilized in a gender sensitive , pro poor and sustainable

manner.

I encourage the different Ministries to also read this document as it provides an

opportunity for them to make their planning and budget more consultative and

participatory. The publication has sectoral issues which when addressed by

different ministries can enhance the welfare of citizens.

Once again, I thank all those who contributed immensely to the development

of this publication as we promote a Uganda with a people centered budget that

dignifies humanity

FOR

EW

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Julius MukundaCoordinator

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List of Figures 5List of Tables 5List of Acronyms 5EXECUTIVE SUMMARY 6

1.0 INTRODUCTION 81.1 Background 81.2 Macroeconomic Outlook for the FY 2013/14 81.3 The NDP and the FY 2014/15 National Budget 9

2.0 MACRO-ECONOMIC MANAGEMENT 112.1 Inflation 112.2 Interest Rates 122.3 Unemployment and Job Creation 132.4 Consumption vs. Development Expenditure 132.5 Supplementary Budgeting 142.6 Public Debt 152.7 URA Revenue Performance 16

3.0 SECTOR ANALYSIS 173.1 EDUCATION Sector 183.2 AGRICULTURE Sector 183.3 HEALTH Sector 253.4 WATER & ENVIROMNMENT Sector 283.5 WORKS & TRANSPORT Sector 303.6 SOCIAL DEVELOPMENT Sector 323.7 TRADE, TOURISM AND INDUSTRY Sector 33

4.0 OTHER BUDGETARY ISSUES 354.1 Fiscal Decentralization: 354.2 Public Administration: 354.3 Salary Enhancement for Public Servants: 364.4. Court Awards: 364.5 Decisive action on theft of public funds: 364.6 Gender and Equity Issues 364.7 Climate Change and Disasters 37

5.0 CONCLUSION 37

TABLE OF CONTENTS

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List of FiguresFigure 1: Sector analysis of commercial banks’ credit to the private sector. 12Figure 2: Government Recurrent and Development Expenditure for the FY 14 2014/15 Table 3: Summary of Supplementary Expenditure for the 18 FY 2013/14 – Schedule 1 Figure 4: Education intra sector Allocations in the FY 2014/15 18Figure 5: School Inspection Grant Transfers to Local Governments 19 (Billion UGX) Figure 6: Intra-sectoral allocations for the Agriculture Sector 23 in the FY 2014/15 Table 7: Health sector budget Allocations for the FY 2014/15 23Figure 8: FY 2014/15 Health sector allocations 26Figure 9: Intra sector allocations for the FY 2014/15 28Figure 10: Intra-sector allocations for the FY 2014/15 30Figure 11: Intra sector allocations for the FY 2014/15 32

List of TablesTable 1: NDP sector projections vs FY 2014/15 allocations (bns) 10Table 2: Summary of Supplementary Expenditure for the 15 FY 2013/14 – Schedule 1Table 3: Summary of sector allocations for the FY 2014/15 (UGX billions) 17Table 4: Education Sector Budget Allocation for the FY 2014/15 18Table 5: Education Expenditure Outturns in Arrears (UGX Billion) 20Table 6: Special Needs, Guidance and Counselling Expenditure 20 (UGX Billion) Table 7: Staffing Gaps at Ministry of Education &Sports 21Table 8: Agriculture Sector Allocations for the FY 2014/15 22

Table 9: Health sector budget Allocations for the FY 2014/15 26Table 10: Water & Environment Sector Budget for the FY 2014/15 28Table 11: Works & Transport sector budget for FY 2014/15 30Table 12: The Rollover of Maintenance Funds (2009/10-2010/11) 31Table 13: Social Development Sector Budget Allocation FY 2014/15 32Table 14: Social Development Sector budget for the FY 2014/15 34

List of Acronyms and Abbreviations ACF Agriculture Credit FacilityBOU Bank of UgandaBOP Balance of PaymentsCBR Central Bank RateCDF Community Development FundCSBAG Civil Society Budget Advocacy GroupCSOs Civil Society OrganisationsDUCAR District Urban Community Access RoadsEAC East African CommunityFY Financial YearGDP Gross Domestic ProductGMOs Genetically Modified OrganismsGOU Government of UgandaICT Information, Communication & TechnologyJLOS Justice Law & Order SectorLGs Local GovernmentsM&E Monitoring and EvaluationMDAs Ministries, Departments & AuthoritiesMoFPED Ministry Finance Planning & Economic DevelopmentMTEF Medium Term Expenditure FrameworkNAADS National Agriculture Advisory ServicesNARO National Agriculture Research OrganisationNBFP National Budget Framework PaperNDP National Development PlanNEMA National Environment Management AuthorityPPDA Public Procurement and Disposal of Assets AuthorityPWDs Persons with DisabilitiesRWSS Rural Water Supply & SanitationSACCOs Savings And Credit Co-operativesSNE Special Needs EducationTOT Terms of TradeUACE Uganda Advanced Certificate of EducationUCE Uganda Certificate of EducationUDHS Uganda Demographic Household SurveyUNESCO United Nations Educational, Scientific and Cultural OrganizationUNRA Uganda National Roads AuthorityUPE Universal Primary EducationURF Uganda Road FundUSE Universal Secondary Education

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The Minister of Finance Planning and Economic Development (MFPED), Hon. Maria Kiwanuka submitted the National Budget Framework Paper (NBFP) for the FY 2014/15 to the Parliament of Uganda as per Section 4(1) of the Budget Act 2001 on the 27th March 2014. The NBFP lays out the fiscal policy framework and strategy for the financial year and details out how the Government of Uganda (GoU) intends to achieve its policy objectives over the medium term through the budget.

Since the budget is an important political tool used by government to transform citizens’ lives, Civil

Society Organizations (CSOs) under the Civil Society Budget Advocacy Group (CSBAG) , share

their proposals on how the FY 2014/15 can better address the needs of poor women and men,

children, the youth, Persons with Disabilities (PWDs), and the elderly among others. This is part of

the input by CSOs in the budget process, making it more participatory at the approval stage. This

publication can be used by government and other stakeholders including CSOs to make the budget

more effective and efficient.

On the Macro Economy, CSBAG proposes the following;

Inflation:• Government should address the supply side concerns within the agriculture sector that cause

the food price hikes on a seasonal basis. Specifically government should:

o Invest in irrigation and other appropriate technologies to reduce the over dependence on

the unstable climatic conditions;

o Invest in food storage and post-harvest technologies, so that during drought food supply

is not acutely affected, thus stabilizing food market prices;

o Strengthen extension services for the farmers so that they can learn sustainable

agricultural practices as well as connect farmers to potential markets; and

o Improve the meteorological department so that weather forecasts are more accurate,

which will give a sustainable solution to food production while checking food price shocks

and in the process achieving low and steady inflation in the economy. Interest rates

EX

EC

UTI

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SU

MM

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§ Government should provide adequate credit

facilities, such as the establishment of the

Cooperative and Agricultural Bank, targeted

towards small-scale farmers and entrepreneurs

who are more likely to be affected by the high

commercial bank lending rates.

Unemployment and Job Creation§We urge government to develop an employment

generation strategy that recognizes employment

as a crosscutting issue.

§ This strategy requires an ultimate objective

on employment in all sectors of the economy

particularly those with the highest potential to

generate employment opportunities particularly

the agriculture sector.

Consumption vs. Development Expenditure§We recommend that increased consumption

expenditure should be done through business

transactions with the private sector.

Supplementary Budgeting§We recommend that parliament continues to

scrutinize all supplementary expenditure and the

implore it to only authorize genuine unforeseen

expenditures.

Public Debt§ Government should desist from domestic

borrowing (either for consumption or Monetary

Policy) as this will crowd out the private sector.

§ Government should seek to effectively spend the

locally sourced revenue to reduce the need for

borrowing both internally and externally.

Uganda Revenue Authority (URA) Revenue Performance• Improving the procedures of registering informal

businesses as this will potentially improve the tax

base.

• Reviewalltaxincentivesandexemptionssoasto

eliminate the unproductive ones.

• Toimprovetaxefficiencyandaccountability,URA

and the MFPED should deliberately display all the

individuals and companies that have been granted

tax holidays and exemptions by government.

• Akeysteptosolvingthetaxdeficitproblemhinges

on growing the private business sector of Uganda.

This in turn, requires improving the investment

climate, especially with easing access to credit

by discouraging government domestic borrowing

which crowds out the domestic sector.

The sector specific recommendations are also

detailed in the paper and the sectors covered include

Agriculture, Health, Education, Water & Environment,

Social Development, Works & Transport, and Trade

Tourism & Industry. Other issues that have budgetary

implications are also alluded to in this paper. These

include fiscal decentralisation, public administration,

salary enhancements for the public servants, gender

and equity issues, climate change and disasters among

others.

... Government

will actively parner

with CSOs, in

the objectives

of monitoring

and evaluation

of its activities

especially as a

means of enforcing

effeciency and

value for money...

NBFP FY 2014/2015

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INTR

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1.1 Background 1. On behalf of Civil Society Organizations (CSOs) working under the Civil Society Budget

Advocacy Group (CSBAG)1, we would like to present CSO perspectives on the budget strategy and priorities for FY 2014/15. As CSOs, we value good governance, social justice, and national development and seek to contribute to a conducive environment that promotes dignity, opportunity and equality for all citizens.

2. We commend government for the continued consultation and involvement of various stakeholders including civil society in the budget process. We are however concerned that the proposed/new budget process is compressed within too short a period of time. This might undermine the meaningful stakeholder consultations in future. As CSOs we strongly believe that Uganda’s service delivery challenges do not emanate from the lack of funds as such, but rather poor prioritisation of public expenditure coupled with budgetary indiscipline.

3. The Minister of Finance Planning and Economic Development, Hon. Maria Kiwanuka submitted the National Budget Framework Paper (NBFP) for the FY 2014/15 to the Parliament of Uganda as per Section 4(1) of the Budget Act 2001 on the 27th March 2014. The NBFP lays out the fiscal policy framework and strategy for the financial year and setting out how the Government intends to achieve its policy objectives over the medium term through the budget.

4. Since the budget is an important political tool used by government to transform citizens’ lives civil society organizations under the Civil Society Budget Advocacy Group (CSBAG), wish to share their proposals on how the FY 2014/15 can address the needs of poor women and men, children, the youth, Persons with Disabilities (PWDs), and the elderly among others. This is part of the input by CSOs in the budget process, making it more participatory. The information generated can be used by government and others to make the budget more effective and efficient in addressing poverty in Uganda.

1.2 Macro Economy outlook for the FY 2013/145. The Gross Domestic Product (GDP) has in Quarter 1 and Quarter 2 for the FY 2013/14

grown from 1percent to 2.3percent at market prices. This is growth from 6.2 to 6.3 trillion. This development has been achieved along a steady exchange rate for the most part of the third quarter for the FY 2013/14. The shilling has however depreciated to average at about UGX 2,550 in March 2014. This has helped the exports to improve as the Balance

1 The Civil Society Budget Advocacy Group (CSBAG) is a coalition formed in 2004 to bring together CSOs at national and district levels to Influence Government decisions on resource mobilization and utilization

for equitable and sustainable development.

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of Payments (BOP) position and the Terms of Trade (TOT). The inflation however increased from 6.8percent in February 2014 to 7.1percent in March 2014 partly due to the weakened shilling. Year-on-Year, the annual inflation for March 2014 has increased by 42.3percent.

6. According to the Bank of Uganda (BoU) statistics, the interest rates have averaged at 22percent for the past five months. This is in particular the weighted average of commercial banks’ lending rate. The CBR has still been held at 11.5percent for the fourth month in a row since December 2013.

7. According to the Uganda Bureau of Statistics (UBOS) statistical abstract 2013, the overall unemployment rate was 3.6percent while the urban unemployment rate was 8.7percent. The situation was worse for women whose unemployment rate was 4.5percent compared to 2.6percent for men. Unemployment according to the Uganda Demographic Household Survey (UDHS) 2009/10 was low among the youth population (5percent of those in the labour force). However, the youth unemployment rate in Kampala was thrice (15percent) the national youth unemployment rate, which underscores the difference in the structure of the urban and rural labour markets.

8. According to the NBFP for the FY 2014/15, revenue collection by URA is projected to increase from UGX 8,534.5bn in the FY 2013/14 to UGX 9,834.7bn in the FY 2014/15. The Collections from Non Tax Revenue (NTR) sources are projected to increase from UGX 270.6bn in the FY 2013/14 to UGX 292.6bn in the FY 2014/15; this will be a 20percent increment between FY 2013/14 (projected outturn) and FY 2014/15 projection. Domestic resources will account for about 82percent of the total budget. Of this, URA revenue collections next financial year account for about 69percent (equivalent to about a 0.5percent

increase as percentage of Gross Domestic Product (GDP) over this year’s level). There is however the need to improve the reporting and accountability on Non-Tax Revenue collections and utilization by Ministries Departments and Authorities (MDAs).

1.3 The NDP and the FY 2014/15 National Budget

9. The National Development Plan (NDP) envisions a transformed Ugandan society from a peasant to a modern and prosperous country within 30 years and that Uganda should be in the middle income segment by 2017. The development indicators associated with transformation, according to the NDP, include: Increasing per capita income levels; Improving labour force distribution in line with sector GDP share; raising the country’s human development indicators; and, improving the country’s competitiveness to levels associated with middle income countries.

10. The indicators above in the budget for the FY 2014/15 (the last year for the NDP) are not in tandem with the NDP. The sector allocation to education has been reduced by UGX 92bn; agriculture which occupies the majority of Ugandans receives only 3.1% of the national budget and the government plans on borrowing UGX 1.6 trillion from the domestic market (keeping lending rates high contrary to middle income countries). Also to note is the investment priorities in the NDP and the National Budget for the FY 2014/15, which are - improving agriculture production and productivity, tourism, trade and Information Communication Technology (ICT). These sectors however are budgeted to receive 3.1%, 0.5% and 0.1% respectively of the National Budget. This does not resonate with the NDP and the reference to these sectors as priorities in the budget.

According to the

NBFP for the FY

2014/15, revenue

collection by URA

is projected to

increase from

UGX 8,534.5bn in

the FY 2013/14 to

UGX 9,834.7bn in

the FY 2014/15.

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Table 1: NDP sector projections vs FY 2014/15 allocations (bns)

Sector 2014/15 NDP projections

2014/15 budget projections

Change (+/-)2014/15 NDP %

shar2014/15 % share

Works & Transport 2,266.70 2,575.50 308.80 16.4 18.1

Energy & Mineral Dev’t 1,736.20 1,711.70 -24.50 12.6 12

Education 2,633.24 1,699.40 -933.84 19.1 11.9

Health 1,598.40 1,197.80 -400.60 11.6 8.4

Public sector Mgt 806.09 1,070.40 264.31 5.8 7.5

Security 826.76 1,005.50 178.74 6 7.1

JLOS 549.43 778.5 229.07 4 5.5

Accountability 807.47 707.1 -100.37 5.9 5

Public Admin 219.09 504.2 285.11 1.6 3.5

Agriculture 737.19 440.7 -296.49 5.3 3.1

Water & Environment 516.72 430.8 -85.92 3.7 3

Legislature 182.34 237.6 55.26 1.3 1.7

Lands, Housing & Urban Dev’t 30.8 99.1 68.30 0.2 0.7

Tourism, Trade & Industry 110.09 68.4 -41.69 0.8 0.5

Social Dev’t 55.72 52.9 -2.82 0.4 0.4

ICT 14.39 15.4 1.01 0.1 0.1

Interest Pay’ts due 647.8 1,104.80 457.00 4.7 7.8

Unallocated 41.33 542.89 501.56 0.3 3.8

Grand Total 13,986.17 14,242.70 256.53 100 100

Source: NDP 2010/11-2014/15 and the NBFP FY 2014/15

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2.1 Inflation11. We like to commend government upon achieving and maintaining

a single-digit inflation rate since August 2012. The inflation rate has however since June 2013 been above the 5% policy target by BoU. In the Month of March 2014, inflation was reported to be 7.1%; an increment from the 6.8% inflation in February 2014. To have sustained single digit inflation and also to achieve the inflation projection for the FY 2014/15 of 6.9%, the structural bottle necks affecting agriculture production and productivity have to be addressed.

12. This is not to say it’s the only cause of inflation but solving this will, together with other factors, have a more sustainable solution. The other factors that cause inflation in Uganda and need attention include among others: - the exchange rate since Uganda is predominantly an importing country, currency in circulation, aggregate demand and international oil prices.

Recommendation

• Government should also address the supply side concernswithin the agriculture sector that cause the food price hikes on a seasonal basis. Specifically:

o Invest in irrigation and other appropriate technologies to reduce the over dependence on the weather;

o Invest in food storage and post-harvest techniques, so that during drought food supply is not acutely affected, thus stabilizing food market prices;

o Strengthen extension services for the farmers so that they can learn sustainable agricultural practices and connecting farmers to potential markets; and,

o Improve the meteorological department so that weather forecasts are more accurate, which will give a sustainable solution to food production while checking food price shocks and in the process achieving low and steady inflation in the economy.

MACRO-ECONOMIC MANAGEMENT

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2.2 Interest Rates13. We commend Government for its interventions in the management

of the monetary policy and its attempt to reduce lending rates. The lending rates have been managed from 27.5 in March 2012 to the current level of about 20%. However this weighted average does not reflect the current market lending rates that are averaging at 25%. The use of Central Bank rate (CBR) as a policy variable to reduce the lending rates has only worked on the weighted average but not on the commercial market rates. This is due to the structural rigidities in the financial markets that include: low financial penetration, high loan administration costs and the high rates of default on loan repayments among other reasons.

14. The use of the CBR as a Monetary Policy Tool has had diverse effects on the economy. According to the State of the Economy Report by Bank of Uganda published in June 2013, the final consumption expenditure contribution to real GDP growth gradually reduced from 8.2% growth in the FY 2010/11 to 3.4% in 2011/12 and was at 1.3% in the FY 2012/13. Furthermore, household final consumption expenditure also reduced to -1.4% in the FY 2012/13 from 8.4% in the FY 2010/11.

15. As a negative impact on the private sector by the CBR, the growth in access to credit by the private sector has continued to be strained. This is because the cost of borrowing is high and so becomes a barrier in access to credit. The increase in credit extension to households

reported to be at 38% in December 2013 has no long-term good economic implication for the economy. This is because this credit acquired is purely for consumption and not investment. Whether or not CBR is high the demands for consumption still exists and that’s why high lending rates are not seen to deter household demand for credit from the commercial banks.

16. The demand for credit by households is possibly driven by consumption expenditure such as tuition for school children. These kinds of loans extended to the households only look good in the loan portfolios of the commercial banks, but, for a short time. Before long the commercial banks will suffocate from the high rate of bad loans registered. This not only negatively impacts the profitability of the banks but also reduces on the corporate tax levied by URA since it depends on the profits registered by the institution. For as long as the cost of doing business is increased by the high costs of loans administration as well as high rates of non-payment among other reasons, the lending rates will not go down further irrespective of how low the CBR is reduced.

Recommendation

Government should provide adequate credit facilities, such as the establishment of the Cooperative and Agricultural Bank, targeted towards small-scale farmers and entrepreneurs who are more likely to be affected by the high commercial bank lending rates.

Figure 1: Sector analysis of commercial banks’ credit to the private sector.

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Source: Bank of Uganda

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2.3 Unemployment and Job Creation

17. In Uganda, the working age is considered to be from 14 to 64 years. According to the UBOS statistical abstract 2013, the overall unemployment rate is 3.6% while the urban unemployment rate is 8.7%. The situation is worse for women whose unemployment rate is 4.5% compared to 2.6% for men. The unemployed among the youth are a hybrid of youth living in slums, city streets, high risk and impoverished communities, with disability, living with HIV and AIDS as well as those who have completed secondary school or tertiary institutions but without employment.

18. Whereas the overall unemployment rate was 3.6% in FY 2009/10, the majority (79.5%) of those employed were in self-employment. Knowing the high rate at which start-up businesses die in this economy, it is possible to posit that actually more than 50% of the working population is unemployed save for the issues with the country’s description of a working age.

19. Although economic growth has been steady over the last 5 years, the growth process has not translated into a creation of more and better jobs. It is estimated that about 480,000 students leave the education system per annum. However over 2 million literate youth are jobless and a further 2 million are underemployed. The budgetary allocations have always been short on enhancing economic growth and household incomes through increased production and productivity in the agricultural sector. The majority of the proposed job-creation strategies such as the Graduate and Youth Venture Capital Funds, as well as the Youth Livelihoods Programme, among others, are yet to deliver the required outcomes.

20. The median amount of monthly payment in 2009/10 was UGX 37,735 in real terms and since the price level of goods and services is known to increase over time, yet remunerations do not, this means that the majority of the working age Ugandans, fortunate enough to get a job, cannot afford to live, considering the huge number of dependents they take care for.

Recommendations

• We urge government to develop anemployment generation strategy that recognizes employment as a crosscutting issue.

• This strategy requiresanultimateobjectiveon employment in all sectors of the economy particularly those with the highest potential to generate employment opportunities. This strongly suggests that more efforts should be geared towards the agriculture sector.

2.4 Consumption vs. Development Expenditure

21. In the FY 2014/15, government expenditure is set to reduce in terms of capital and consumption outputs. In the FY 2013/14, the estimated consumption expenditure was at 44.9% (UGX4.7tn) and this is estimated to increase to 50.7% (UGX 5tn) in the FY 2014/15. Capital expenditure which was estimated at 47% (UGX4.9tn) in the FY 2013/14 will reduced to 39.6% (UGX3.9tn) in the FY 2014/15. The argument brought forward by government that an increase in consumption expenditure will ensure that assets acquired by

According to the

NBFP for the FY

2014/15, revenue

collection by URA

is projected to

increase from

UGX 8,534.5bn in

the FY 2013/14 to

UGX 9,834.7bn in

the FY 2014/15.

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Figure 2: Government Recurrent and Development Expenditure for the FY 2014/15

government are operational is deceptive. We strongly believe that this increase in public consumption expenditure is a result of the random creation of districts and other public institutions that we cannot support sustainably.

22. Whereas the increased consumption expenditure is expected to be a stimulus in the economy, the most desirable effects are achieved when the expenditure is on sales and purchases with the private sector. The common practice to spend heavily on workshops, allowances and trips abroad will be a self-defeating purpose for the increased consumption expenditure.

Recommendation

• We there for recommend that the increased consumptionexpenditure be done through business transactions with the private sector.

2.5 Supplementary Budgeting23. In the FY 2013/14, so far, the GoU has forwarded to Parliament a

supplementary expenditure schedule totalling to UGX 81.126bn as recurrent expenditure for ten institutions and ministries and UGX 139.442bn as development for three institutions and ministries. The total supplementary expenditure on schedule 1 is UGX 220.568bn Table 3 highlights these expenditures:

23.1 We commend government for strictly enforcing budget discipline in the FY 2013/14 thus far. The Ministry of Justice and Constitutional Affairs requested for a supplementary expenditure of UGX 8,109,601,000 of which 3.267bn was for facilitation for the Heritage Oil and Gas Ltd and Tullow Uganda Operations PTY arbitration case in London and UGX 4.843bn for partial court awards. The Reason for not appropriating these funds was that they could not fit in the MTEF ceiling. However, in the FY 2013/14, UGX 4.347bn was appropriated for court awards. This supplementary expenditure of over UGX8bn is 69% of the approved votes function contrary to Section 12 (2) of the Budget Act.

24. To put this in perspective, since government operates a cash budget, and all the money has been allocated, to get supplementary expenditures, some government institution has to suffer a budget cut to avail money for the court cases, whose verdict can’t even be certain. This then has a spill-over effect of poor service delivery since work plans are not implemented as planned in the MDAs whose budgets are cut. We once again commend the Parliament for strongly condemning this expenditure.

Recommendation

• We recommend that parliament continues to scrutinize allsupplementary expenditure forwarded to them and it should only authorize genuine unforeseen expenditure.

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Source: National Budget Framework Paper FY2014/15

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2.6 Public Debt25. According to the NBFP for the FY 2014/15, Uganda’s total external

debt exposure has increased over the years from USD 2.45bn in June 2007 to USD 6.4bn in December 2013. USD 4.1bn of total debt is disbursed and USD 2.3bn is loan commitments, which have not yet been disbursed. The increase in external debt arises out of the need to bridge the huge infrastructure gap to finance priority investments identified by the NDP, particularly in sectors such as Energy and Mineral Development, Works and Transport, Education and Health.

26. The domestic debt in the FY2014/15 is projected to be UGX1, 647.2bn and this will make the crowding out effect of the private sector worse. In effect, the lending rates in the commercial banks will too not come down soon since the banks will prefer to deal with the government than the private sector (lower risk profile is attached to government).

27. The total expenditure on interest payment is projected to be UGX 1,104.8bn on both the domestic and external debt in the FY 2014/15. The domestic interest payment is UGX 996.5bn while the external interest payment is projected to be UGX 108.3bn. The important thing to note about the interest on the domestic debt is that most of it has accumulated due to the operations of the monetary policy through issuing of bills and bonds. Also to note is that this money is being paid to offshore investors thus the tax payer is paying opportunistic foreigners under the pretext of managing the monetary policy.

Recommendations

• Government should desist from domestic borrowing (eitherfor consumption or Monetary Policy) as this will crowd out the private sector.

• Governmentshouldseektoeffectivelyspendthelocallysourcedrevenue to reduce the need for borrowing both internally and externally.

Table 2: Summary of Supplementary Expenditure for the FY 2013/14 – Schedule 1

Ministry/Institution Recurrent(‘000) Development (‘000) Total (‘000)

Ministry of Foreign Affairs 997,126 - 997,126

Ministry of Justice and Constitutional Affairs 8,109,601 - 8,109,601

Ministry of Education and Sports 1,300,000 - 1,300,000

Ministry of EAC Affairs 909,480 - 909,480

Busitema University 1,321,693 - 1,321,693

NAGRC&DB 2,000,000 - 2,000,000

Uganda Police Force 60,000,000 - 60,000,000

NFA 5,000,000 - 5,000,000

Uganda Mission in Brussels 867,128 - 867,128

Judiciary 620,851 - 620,851

Ministry of LG - 858,935 858,935

National Citizenship and immigration Control - 138,583,014 138,583,014

NARO - 16,700,000 16,700,000

Total 81,125,879 156,141,949 237,267,828

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Source: Supplementary Schedule 1 for the FY 2013/14

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2.7 URA Revenue Performance28. According to the NBFP for the FY 2014/15, the net domestic revenue collections by URA had a short

fall of UGX 289.72bn by end of January 2014. The projected shortfall erodes the revenue base for the FY 2014/15, which implies need for tax policy and administration measures to complement financing of the budget for the FY 2014/15. The projected tax to GDP ratio for the FY 2014/15 is expected to increase to 13.5% compared to the provisional 12.96% for the FY 2013/14. It will be extremely challenging for the government to meet the minimum requirement for joining the EAC monetary union since it among other things the Tax-to–GDP ratio is supposed to be at 25% for at least three consecutive years.

29. It is important to note that revenue performance of any given country allows for an insight into potential signs of deeper problems in an economy if the root cause of the short fall appears to be internal (corporation taxes) rather than deficit international taxes.

Recommendations

• Integratetheinformalsectorintotheformalsectorthroughimprovingtheproceduresofregisteringbusinesses. This will potentially improve the tax base.

• Reviewalltaxincentivesandexemptionssoastoeliminatetheunproductiveones.

• Toimprovetaxefficiencyandaccountability,URAandtheMoFPEDshoulddeliberatelydisplayallthe individuals and companies that have been granted tax holidays and exemptions by the GoU.

• Akeystep tosolving the taxdeficitproblemhingesongrowingtheprivatebusinesssectorofUganda. This in turn, requires improving the investment climate, especially with easing access to credit by discouraging government domestic borrowing which crowds out the domestic sector.

Whereas the increased

consumption

expenditure is expected

to be a stimulus in the

economy, the most

desirable effects are

achieved when the

expenditure is on sales

and purchases with the

private sector.

16

17

30. The National Budget in the FY 2014/15 is projected to increase to about UGX 14.3 trillion were the Winners and Losers are highlighted in the table below:

Table 3: Summary of sector allocations for the FY 2014/15 (UGX billions)

Sector FY 2013/14 approved budget

FY 2014/15 budget projections

Change (+/-)

FY 2013/14 % share

FY 2014/15 % share

Works & Transport

2,510.70 2,575.50 64.8 19.2 18.1

Energy & Mineral Dev’t

1,675.70 1,711.70 36 12.8 12

Education 1,761.60 1,699.40 -62.2 13.5 11.9

Health 1,127.50 1,197.80 70.3 8.6 8.4

Public sector Mgt

1,093.80 1,070.40 -23.4 8.4 7.5

Security 1,048.50 1,005.50 -43 8 7.1

JLOS 625.7 778.5 152.8 4.8 5.5

Accountability 698.8 707.1 8.3 5.3 5

Public Admin 398.3 504.2 105.9 3 3.5

Agriculture 382.7 440.7 58 2.9 3.1

Water & Environment

383.9 430.8 46.9 2.9 3

Legislature 237.6 237.6 - 1.8 1.7

Lands, Housing & Urban Dev’t

30 99.1 69.1 0.2 0.7

Tourism, Trade & Industry

54.8 68.4 13.6 0.4 0.5

Social Dev’t 44.4 52.9 8.5 0.3 0.4

ICT 15.4 15.4 - 0.1 0.1

Interest Payments due

975.3 1,104.80 129.5 7.5 7.8

Unallocated - 542.89 n/a 3.8

Grand Total 13,064.79 14,242.70 1,177.91 100 100

SE

CTO

R A

NA

LYS

IS

3

17Source: National Budget Framework Paper FY 2014/15

18

3.1 Education sector31. The education sector has dominated public expenditure in Uganda

over the years averaging 18% of expenditure outturns over the past decade. However, in the current economic context, Uganda, like other countries in sub-Saharan Africa, must make difficult decisions about mobilizing and allocating resources to this sector, especially in light of rising demands from other public service sectors, such as infrastructure or healthcare (UNESCO, 2011).

3.1.1 Budget Performance FY 2013/14

32. In the financial year 2013/14, the approved budget for the education sector amounted to UGX 2.01 trillion (14.6% of the national budget). The main objectives of this expenditure were, to improve quality and relevance of education at all levels; improve equitable access to education and improve effectiveness and efficiency in the delivery of the education services.

Table 4: Education Sector Budget Allocation for the FY 2014/15

Approved budget

FY 2013/14

Projections

FY 2014/15

Recurrent

Wage 962.633 963.953

Non-Wage 364.07 370.15

Development

GoU 147.688 149.688

Ext. Fin. 288.194 216.603

GoU Total 1474.391 1,483.791

Total GoU +Ext Financing(MTEF) 1762.585 1,700.39

Non Tax Revenue 243.739 251.628

Grand Total 2,006.33 1,952.021

The education sector for the FY 2014/15 is proposed to have an allocation (with external financing) decrease to 11.9% (UGX1, 699.4bn) compared to the 13.5% (UGX 1,761.6bn) of the national budget in the FY 2013/14. This will translate into a UGX 62.2bn reduction. The reduction in the education sector budget is as a result of a drop in projected external financing which reduced from UGX 288.194bn in the FY 2013/14 to UGX 216.602bn in the FY 2014/15 (a UGX 71.592bn reduction).

33. The percentage too, has reduced much more than the nominal value because the total budget for the FY 2014/15 has increased to UGX 14,242.7bn compared to the UGX 13,064.79 that was approve in the FY 2013/14. To note also is that the GoU expenditure (excluding external financing) is projected to increase from UGX 1,474.391bn to UGX 1,483.791bn. As at January 2014, the GoU had spent (including donor funding), UGX 1,039.9bn of the education sector budget as a whole. This represents a budget performance of 59%.

Figure 4: Education intra sector Allocations in the FY 2014/15

34. Out of the total development expenditure of UGX 366.291bn, UGX 216.603bn (59%) is projected to be sourced from donor funding. The sector expenditure is strongly skewed to recurrent expenditure taking 90% of the total budget for FY 2014/15 (excl donor funding). More so, the wages take up 65% of the total recurrent expenditure. The sector has the following concerns to be rectified for every shilling to count in the FY 2014/15: -Source: National Budget Framework Paper FY 2014/15

19

3.1.2 Inadequate capitation grants

35. The current expenditure per pupil per year in Universal Primary Education (UPE) is UGX 6,860 only. This amount is inadequate to facilitate effective teaching and learning in primary schools. The ministry’s proposal to increase the capitation grant to UGX 10,000 per child per year should be supported by government. However, with the projected enrolment numbers of UPE pupils increasing to 7.2million for the FY 2014/15, the ministry has got a short fall of UGX 22.7bn especially if the capitation grant per pupil per year is going to be increased to UGX 10,000.

Recommendation

• The need for increasing the capitation grant remains andeducation sector should also consider introducing an inflationary parameter in the formula for calculating the capitation grants.

3.1.3 The Monitoring & Evaluation (M&C) budget is grossly insufficient.

36. The meagre nature of the monitoring and evaluation budget of the sector has over the years defeated its purpose. At local government level where the bulk of the services are delivered, the school inspection grant averaged UGX 2.4 billion. If apportioned evenly across the 134 local governments (including municipalities) it amounts to UGX 17.9 Million for the entire financial year.

Figure 5: School Inspection Grant Transfers to Local Governments (Billion UGX)

37. Despite the increment in the M&E budget by UGX 1.6bn, the amounts are still grossly insufficient and point to an obvious need to bolster the budget. The significance of M&E to the effective delivery of education services needs no emphasis and the insufficient funding could explain many of the challenges such as teacher absenteeism, ghost teacher prevalence and low completion rate to P.7 which currently stands at 32% among others.

Recommendation

• Government should increase the school inspection grant byat least UGX 2bn, to improve the monitoring and evaluation function in the LGs

3.1.4 Arrears

38. Expenditure arrears are forms of fiscal/budget indiscipline and indicate challenges in budget execution. Contrary to popular opinion, arrears do not imply outstanding commitments, obligations and encumbrances (a reservation of spending authority by operating units, prior to actually incurring any expense) but rather imply liabilities of the government. Arrears are great risks to accountability because their tracking gets harder with time.

39. In the FY 2011/12, while the sector registered no arrears in the budget performance report, the Auditor General’s report for the same period indicates that the sector had unverified domestic arrears arising from water and electricity consumption amounting to UGX 1.61bn. From the FY 2007/08, the sector recorded remarkable improvement in dealing with arrears as it registered a decreasing trend. However, in the FY 2012/13, the sector expenditure outturns indicate arrears of UGX 5.7bn (see Table 4 below). It is notable that the approved budget for arrears was only UGX 136 million indicating more budget indiscipline.

Source: Budget Performance Reports and Approved Estimates

20

Table 5: Education Expenditure Outturns in Arrears (UGX Billion)

FY 2007/08 FY 2008/09 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13

Arrears 3.09 2.92 0.23 0.0 0.0 5.665

Recommendation

• Forasectorthatisstillstrugglingwithfundinggaps/insufficiencies,thetrendbeforeFY2012/13isthedesirableone.Effortsshouldbemadetogreatly minimize arrears in expenditure.

3.1.5 Special Needs Education (SNE)

40. In 2011, about 10% of Ugandan children of school going age with learning needs required SNE. In the same year, the primary subsector alone had about 197,200 pupils (2.4% of the enrolled number) that required special needs education. It is also worth noting, that SNE forms a very important component of the equitable delivery of education services. However, the financing of SNE over the years is extremely inadequate (see Table 5)2. Further, considering that the available funding remains at the centre Ministry of Education & Sports (MoES), there is no SNE funding at local government level where the service is actually delivered.

Table 6: Special Needs, Guidance and Counselling Expenditure (UGX Billion)

Expenditure LineFY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14

(approved budget)

FY 2014/15 (projection)

SNE, Guidance & Counselling 0.91 1.55 1.89 1.68 2.16 2.06

Currently, Uganda has only nine (9) SNE schools. While the emphasis has recently been placed on inclusive schools, the infrastructural and human resource challenges cannot allow for the effective delivery of SNE. According to the National Disability Act, Government is required to invest 10% of the education budget to Special Needs Education (SNE). It is saddened that the proposed funding for SNE in the Ministry of Education for FY 2014/15 stands at 0.12% an equivalent of UGX 2.06bn. Worse still, this budget has been reduced from UGX 2.16bn in FY 2013/14 which is a 4.6% reduction. Equitable access to education is a right of every individual and children with disabilities have a right to access social services including education. The current support for SNE is still wanting in providing a conducive learning environment which accounts for a high rate of school drop outs among children with special learning needs.

Recommendations

• OperationalisetheSpecialNeedsandInclusiveEducationInitiative,specificallytorecruitSNEofficers,supportspecializedtraininginspecialneedseducation and sensitize stakeholders on their role to support the education of children with special learning needs.

• IncreasefundingofSNEtoatleast1%oftheEducationsectorbudgetintheFY2014/15

Source: Budget Performance Reports

Source: Budget Performance Reports, Approved budget for the FY 2013/14 & NBFP 2014/15

2 CSBAG study on financing special needs education, 2012

21

3.1.6 School Feeding Policy

41. Over the course of implementing universal primary and secondary education, the issue of feeding pupils/students has been a source of constant debate. It has also been subject to several political pronunciations prohibiting school authorities from levying any charge for feeding. This has left many of the pupils/students attending class while hungry. Government doesn’t have adequate resources to effectively feed the pupils/students and yet prohibits the charge of a fee, however small, for their feeding.

42. However, Section 15(5) of the Education Act (2008) and Sections 6 & 8(3) (13) of the UPE guidelines clearly stipulate that any school may levy a charge for mid-day meals as determined by the School Management Committee in consultation with the district council. In Subsection (6) the Act further stipulates the payment for such meals shall be voluntary and no pupil who has opted not to pay for or take mid-day meals at school shall be excluded from school for non-payment for such meals.

43. It is worth noting that lunch/midday meals help attract and keep pupils in school (Paul & Mondal, 2012). As Kibenge (2005) points out, a partnership between World Food Programme and the government of Uganda has seen school feeding programmes implemented in Karamoja since the 1980s. With more support from other development partners, the programme has increased enrolment as well as helped retain children in school within the Karamoja sub-region.

Recommendation

• Governmentshouldn’tconstrainschools tryingto feedchildrenthrough small charges (fees and in-kind contributions) but rather strengthen its regulatory function to ensure that the legal and policy provisions are not abused.

3.1.7 Human Resource Constraints

44. While the Pupil Teacher Ratio has improved overtime, human resource constrains remain in the teaching profession. Coupled with infrastructural challenges, it implies that in some districts at a given point, a teacher has over 100 pupils to deal with. For instance, in 2011, the pupil to classroom ratio in government schools was estimated to be 67:1. However, like any other average statistic, this masks wide discrepancies with some districts such as Arua and Maracha having a Pupil Classroom Ratio of over 100 (MoES, 2011).

45. At the centre, a review of the ministry‘s staff establishment revealed staffing gaps (see Table 6). Out of 420 approved positions, 185 positions had been filled and the rest of the positions including 234 in three semi-autonomous boards operating at the Ministry remained vacant (Office of the Auditor General, 2012). Human resource gaps constrain performance of the sector and in many cases render the performance ineffective.

Table 7: Staffing Gaps at Ministry of Education &Sports

Entity Approved positions Positions Filled Positions Vacant

1 Ministry Headquarters 279 115 164

2 Uganda Business and Technical Examinations Board (UBTEB) 52 20 31

3 Uganda Allied Health Examinations Board (UAHEB) 24 12 12

4 Uganda Nurses and Midwives Examinations Board UNIMEB 23 9 14

5 Directorate of Industrial Training. (DIT) 42 29 13

TOTAL 420 185 234

21

Source: Auditor General’s Report, 2012

22

Recommendation

• Thegapsshouldthereforebefilled,especiallytherecruitmentofteachers.

3.1.8 Budget shortfall for assessment of PLE and secondary examinations

46. The Number of pupils to be examined in the FY 2014/15 is projected to be 502,708. At a unit cost of UGX 14,000 per pupil to be examined, the ministry should be receiving UGX 7.038bn. However, the current budget provides only UGX 5.966bn which provides a shortfall of UGX1.073bn. For UCE & UACE, the ministry will have a shortfall of UGX 2.157bn on both programmes. Inability to cater for examination bodies to function properly will discredit our examination system and the quality of our education.

Recommendation

• Government should provide adequate resources forPLE,UCEand UACE assessment

3.2 Agriculture Sector47. Agriculture still plays an important role in Uganda, accounting for

24.4% of GDP (UBOS 2012). The sector employs over 75% of the country’s labour force whose nominal per capita income stands at $506 (National Development Plan 2010/11-14/15). The smallholder farmers, based in the rural areas, account for 85% of the country’s 33 million population (World Bank 2010). Despite the importance of the sector, reviews of public expenditure and programs clearly show that the agriculture sector has been declining; agricultural output is the lowest in all the sectors of the economy and is far below the National Development Plan (NDP) target of 4.9%.

48. Besides the decline in agriculture, Uganda has up to now not prioritized agriculture in her public spending to the extent that the sector is set to receive only 3.1% of the national budget (NBFP 2014/15). Further still, the performance of the agricultural sector has declined steadily from 7.9 percent in 2000/01 to 1.9 percent in 2012/13. This has been accelerated by poor absorption capacity of budget resources with regard to expenditure, As such, service delivery related activities have been negatively affected and thus performance compromised.

Table 8: Agriculture Sector Allocations for the FY 2014/15

2013/14 Approved

Budget

Projections

2014/15

Recurrent

Wage 62.094 62.094

Non-Wage 62.861 62.861

Development

GoU 190.174 223.174

Ext. Fin. 67.664 92.644

GoU Total 315.129 348.129

Total GoU +Ext Financing(MTEF) 382.793 440.773


Grand Total 405.38 463.010

We would like to commend government for increasing the agricultural sector budget from UGX 382.7bn (2.9% of national budget) in the FY 2013/14 to UGX 440.7bn (3.1% of national budget). Whereas the GoU expenditure is projected to increase by UGX 33bn, from UGX 315.129bn in the FY 2013/14 to UGX 348.129bn in the FY 2014/15, the donor funding for the sector too is projected to increase by UGX 24.98bn, from UGX 67.664bn in the FY 2013/14 to UGX 92.664bn.This donor funding will make 29.3% of the sector development budget. To note is that the NTR is projected to reduce from UGX 22.586bn in the FY 2013/14 to UGX 22.237bn in the FY 2014/15.

Source: National Budget Framework Paper FY 2014/15

23

Figure 6: Intra-sectoral allocations for the Agriculture Sector in the FY 2014/15

49. The Civil Society Budget Advocacy Group (CSBAG) would wish to call upon government to give high priority to the agriculture sector by allocating to it at least more than 6% in the next FY 2014/15. Among others the following should be the main focus: -

3.2.1 An Inclusive Agricultural Extension System:

50. According to the National Development Plan 2010- 2014, it clearly indicates that only 14% of farmers are visited by an extension worker in a period of 12 months. Today NAADS is regarded the national programme on extension. Despite the strides that have been made, farmers are not adequately benefiting from extension services being offered. Instead it has remained selective and discriminative leaving the majority of farmers outside their target. Further still research has shown that demand-driven extension is unlikely to be the solution to the challenge of effectiveness but rather an inclusive and well integrated system that is fully funded and able to reach a wider spectrum of rural farmers for improved production and productivity.

Recommendations

• IntheFY2014/15,thegovernmentshouldincreasefundingtotheextension system where deliberate effort to integrate modern approach with the traditional farmer approach.

• Thereisalsoneedtoconsultthelocalfarmers,ofwhattheyaredoing besides modern innovations.

3.2.2 Access to Credit Facilities:

51. Farmers cite the shortage of capital and credit as their single biggest constraint to improving farming. Government has not provided adequate funding towards improving access to credit by farmers. Government also spends very little to expand poor farmers’ access to credit. Save for the efforts being made by Government under the Agricultural Credit Facility (ACF), small holder famers have largely not benefited. Important to note is that lending to agricultural value addition was increased by 4% from 34% in 2008 to 38% in 2009 but there is still a lending gap especially to small scale producers (PMA, Financial Year Book, 2012). The proposal to create a Cooperative Bank is welcome but it should be fast-tracked to quickly respond to the overarching need of credit facilities in the sector.

Recommendation

• Allocate earmarked funds for lending to small scale farmers at affordable interest rates. In addition Government through the MoFPED should exploit the possibility of establishing an Agricultural Bank that will explicitly focus on farmers’ credit needs, hedge against risks like crop failures and volatilities in the prices of agro-products.

3.2.3 Revival of Farmer/Producer Cooperative:

52. Cooperatives have been identified as crucial strategies for enhancing incomes and employment opportunities for households as they enable collective action but also enabling their access to resources and market opportunities. Refurbishing the infrastructural system of cooperatives such as harmonizing operations of SACCOs, producer cooperatives,


24

the warehouse receipt system as well as input support from a farmer-centred point of view is more desirable in the development of farmer institution is also works as a strategy for increased market access. Additionally facts on the ground show that the SACCOs/Area Enterprise Cooperatives that people have begun on their own (farmer-led) flourish and yet those which are influenced or started by the government decline in a short period of time.

Recommendations

• The government should support andstrengthen the cooperative movement to promote collective marketing and stable prices for farmers as well as enabling the farmers to enjoy other benefits that accrue for such associations/cooperatives.

• Thegovernmentshouldalsoexpeditethereform process of the 1991 Co-operative Societies Act, to ensure considerable autonomy and facilitating a well-functioning of Agricultural Co-operative Movement in Uganda.

3.2.4 Enhancing Small Holder Farmers’ Adaptation to Climate Change:

53. Uganda’s agriculture is still rain-fed despite the abundance of water in the country as provided both by rains and water bodies. This has rendered the sector erratic, inefficient and unpredictable. The bulk of financing in regard to water for production has consistently been left to donors under such projects as Water for Production and the Livelihoods Support Programme among others. Micro Irrigation as a method of production has been neglected especially for small holder famers, despite the simplicity of its basic technology and its

enormous potential in Uganda’s agricultural sector.

54. It has been noted with concern that money for irrigation has always been shifted to the Ministry of Water and Environment but up to now farmers still face a challenge of crop failure due to prolonged droughts. We commend government for the installation of 4 small scale irrigation and water harvesting sites completed in Nebbi, Maracha, Bulisa, Rubirizi and the other 3 sites in Katakwi. This is however in contrast to the 30 planned irrigation schemes in the FY 2013/14.

55. In the FY 2014/15, government plans to construct 50 valley tanks with equipment from the Japanese Government. It also plans to construct 40 small scale irrigation sites. UGX 133,333,000 is the planned allocation for the small scale irrigation demonstration sites in the FY 2014/15, the same as in the FY 2013/14 yet the output has been increased to 40 from the 30 set at the beginning of this FY 2013/14. In real terms, the allocation for the FY 2014/15 is UGX 124,726,848 only taking the projection for inflation in the FY 2014/15 to be 6.9%. The reason stated is that the priority has been moved to use of fertilizers and that irrigation will be dealt with through isolated NAADS programmes.

Recommendation

• We propose that Government earmarksfunds directed to promoting appropriate micro-irrigation technologies that can be adopted by the majority of farmers to enhance their adoptive capacity to climate change. This investment will also serve a double purpose of mitigation to climate change.

We would like to

commend government

for increasing the

agricultural sector

budget from UGX

382.7bn (2.9% of

national budget) in

the FY 2013/14 to

UGX 440.7bn (3.1% of

national budget).

24

25

1.1.5 Good Quality Seed/Agro- Inputs for Small Holder Farmers:

56. Good quality seed is key to improving crop productivity. Currently the Government is in its final stages of passing a Biotechnology and Bio-safety Bill that intends to introduce and commercialize Genetically Modified Organisms (GMOs). Aware, that this is a food security issue, it should be noted that, the introduction of GMOs has threatened the continued existence of traditional seeds which have been feeding the Ugandan population since time immemorial. Once the GMOs have displaced traditional seeds, hunger will definitely surface.

Recommendations

• We propose that, FY2014/15 allocates funds to put in placemechanisms that improve the informal seed sector; by promoting good quality seeds through establishing model farms for seed multiplication and distribution to other grass roots farmers.

• There should also be exchange learning visits among thefarming communities to improve on their local innovations and adopt good farming practices, other than introducing GMOs which further enslave farmers to be dependent on seed supplies.

1.1.6 Creation of numerous Semi-autonomous Projects within the mother Ministry

57. We have noted that the ministry has been over split into semi-autonomous sectors like; NAADS, NARO, and other agencies for the promotion of coffee, cotton and oil among others. The creation of these secretariats has left the ministry with just a regulatory and coordination role. This has also been accelerated by the uncoordinated, conflict of interest and multiple approaches employed by the different stakeholders thus causing the declining performance of the sector. The ministry has not given effective direction in a coordinated manner to the technical and other players in the sector hence creating the mess which is currently killing the sector.

Recommendation

• We propose that the ministry comes up with a mechanismfor direct coordination of the work of different stakeholders in the sector, including civil society, that are receiving funds for agriculture.

3.3 HEALTH SECTOR58. Uganda has made significant progress in improving most of the key

health sector indicators between 2001 and 2010. These include: accelerated declines in infant mortality (from 81 to 54 per 1,000 births), under five mortality (from 156 to 90 per 1,000 live births), and maternal mortality (506 to 352 per 100,000 births). There has also been a significant improvement in contraceptive prevalence rates (15% to 30%), and an increase in the proportion of births attended to by skilled personnel (38% to 59%), over the same period. The total fertility rate also declined from 6.7 in 2006 to 6.2 in 2011. The use of modern family planning methods has also increased in the last 15 years from 18% to 26% among the married.

59. According to the NBFP for the FY 2014/2015, the health budget projection is 1,197.80bn which is 8.4% of the overall national budget. This indicates a decrease in health sector funding from 8.6% in the FY2013/2014.

25

26

Table 9: Health sector budget Allocations for the FY 2014/15

2013/14Approved Budget

Projections2014/15

Recurrent

Wage 305.666 305.666

Non-Wage 331.499 333.799

Development

GoU 75.38 81.380

Ext. Fin. 416.668 478.680

GoU Total 712.546 720.846

Total GoU +Ext Financing(MTEF) 1,129.214 1,199.526


Grand Total 1,146.51 1,217.892

This continued decrease in health sector budget funding is inconsistent with the commitment made by the government to allocate 15% of the national budget to health as per the Abuja declaration. This budget reduction is a retrogressive measure that will only cripple further health service delivery in the country. Below, we take a more critical look at the budgetary allocations to the sector for the year 2014/15: -

60. From figure 8 below, we note that the allocation for the National Medical Stores has reduced from UGX 219.375bn in the FY 2013/14 to UGX 218.37bn in the FY 2014/15. The regional referral hospitals total budget has also reduced from UGX 72.4bn to UGX 70.5bn in the FY 2013/14 and FY 2014/15 respectively. This is likely to lead to over-crowding at Mulago National Referral Hospital if patients are not served at the regional referral hospitals.

Figure 8: FY 2014/15 Health sector allocations


Source: NBFP FY 2014/15

27

3.3.1 Funding highlights for the health sector in the FY 2014/15

61. There is still a problem of concentration of resources at the centre yet most of the people use the public health care system at the local government level. Figure 8 indicates that the allocation for the Ministry of Health is 524.403bn while the one for local governments/Public Health Care (PHC) is 303.156bn which is 43% and 25% respectively.

62. On a positive note, we would like to commend the government for increasing the budget allocations for the Uganda Cancer Institute from 7.382bn to 10.472bn and Uganda Heart Institute from 7.961bn to 11.111bn. This is a step in the right direction towards recognition of the growing problem of non-communicable diseases, for which many Ugandans seek treatment abroad due to limited services in country. The Uganda Heart Institute will be able to carry out more open heart surgeries.

63. The budget allocation for the Uganda Blood Transfusion Service (UBTS) has also gone up from 4.074bn to 6.374bn. This is also commendable because there have been many cases of people dying, especially maternal deaths due to lack of blood at health facilities. It also indicates a response to the recent crisis that saw Nakasero Blood Bank running out of blood.

3.3.2 Critical activities underfunded in the FY 2014/15

64. The health sector has identified what they considered critical activities in the NBFP submitted for parliamentary scrutiny, yet they remained under or unfunded. These include:

a) No funds have been provided for wage enhancement for the other health workers except medical officers at Health Centre IIIs and IVs. UGX 129bn is required for salary enhancement for all staff in the sector annually.

b) Recruitment of health workers both in local governments and MOH headquarters to counter the low staffing challenge to match the population increase. UGX 2.5bn is needed to recruit an additional 3,000 workers, which is the shortfall for the 2012/2013 recruitment drive.

c) The non-wage recurrent budget needs to be revised to enhance health service delivery in the local governments. UGX 41.6bn is required to make the current structure to operate at a reasonable level. Currently some health facilities have a budget of UGX 120,000 per month to deliver all the required services excluding medicines.

d) Rehabilitation of general hospitals. Many of the general hospitals some of which were constructed in the 1930s and 1960s are in a bad shape. The total requirement is UGX 826.8bn excluding those being covered under the on-going projects. They propose a phased intervention starting with UGX 25bn in the first year.

e) UGX 40bn is required for the first year to support the introduction and implementation of the Uganda ambulance service for local governments and regions. This is to improve the management of emergencies and referrals in the country.

This underfunding is likely to cause inefficiencies in service delivery and points to poor government planning and prioritization for improved health service delivery.

Recommendations

• Re-prioritisation of health sector budget: Since the budget process is still on-going up to the time of presentation of policy statements, we recommend that the Ministry of Health re-aligns its budget towards more pressing needs at lower health units as opposed to large shares of resources left at the headquarters. More money should be allocated to regional hospitals, district health budgets, mental health, vaccination and recruitment of health workers. Universal access and equity in resource distribution should be ensured especially to cater for hard-to-reach areas such as the Island districts which include, Namiyango, Kalangala, Buvuma and parts of Wakiso and Mukono.

• Diversion of funds: We do recognise the gross underfunding to the health sector and in light of the funding challenges, we are recommending that the Ministry of Health available resources be put to optimal use. The Auditior General’s report for the FY 2010/11 notes that UGX 620,320,431 meant for medical and agricultural supplies (expenditure item 224002) was utilised on payment of salaries for intern doctors and sensitization

28

workshops. Such diversion of funds hampers implementation of planned activities.

• No releases - related to the above, in FY 2013/2014 approved budget, money was allocated to expand and rehabilitate Kawolo Hospital out-patient department, theatre and maternity, construct four units of staff houses and mortuary but no release was made. This is a call to all stakeholders to engage in budget tracking to ensure that all the funds approved and disbursed are spent on the delivery of health outcomes.

• Enhance monitoring and supervision of health services - The budget for the sector monitoring by the ministry of health should be increased to reflect government intentions of improving sector monitoring. The monitoring and supervising vote function has not received any increment which currently stands at UGX 0.85bn in the FY 14/15 budget proposal.

3.4 Water & Enviromnment Sector

65. Uganda is not on track to meet the 2015 national sanitation coverage target of 72%. The country loses about UGX 386bn (USD 177 million) annually due to poor sanitation; equivalent to USD 5.5 per person in Uganda or 1.1% of the national Gross Domestic Product (GDP). An estimated 3.3 million Ugandans do not have access to toilets and practice open defecation, yet less than 650,000 toilets need to be built and used to eliminate this practice.

66. The Water and Environment sector was allocated 2.9% (UGX383.9bn) in the FY 2013/14 national budget, a 0.3% reduction from 3.2% in FY 2012/13. The allocation to the water sector has slightly increased to 3.0% (UGX 430.8bn) of the national budget in the FY 2014/15 budget projections. Whereas government expects to spend a total of UGX 430.8bn in the FY 2014/15, 39.2% (UGX 169bn) is expected to come from donor funding through project support. This is a 10.2% (UGX 17.3bn) increase in donor commitment towards expenditure in the sector.

Table 10: Water & Environment Sector Budget for the FY 2014/15

Approved Budget FY 2013/14

Projection 2014/15

Recurrent Wage 12.354 12.704

Non-Wage 16.498 17.148

Development GoU 203.314 231.954

Ext. Fin. 151.690 168.970

GoU Total 232.166 261.806



Grand Total 404.445 447.713

Specifically this donor funding makes up 42% of the development expenditure for the sector. We commend governments’ efforts for increasing its expenditure to the Water & Environment sector by 11.3% from UGX 232.2bn in the FY 2013/14 to UGX 261.8bn in the FY 2014/15 excluding donor support.

Figure 9: Intra sector allocations for the FY 2014/15



29

67. In the FY 2014/15, the Ministry of Water & Environment will have an increase in allocation of over UGX 45bn while the local government allocation will increase by only UGX 1bn. While the allocation for the National Forest Authority will reduce by UGX 3bn in the FY 2014/15, the allocations for National Environment Management Authority (NEMA) and Kampala City Council Authority (KCCA) will remain the same.

3.4.1 Challenges facing the Water & Environment Sector

There are serious critical issues and challenges which must be addressed with regard to improving the status of environment and natural resources if Uganda’s future is to be sustained. These among others include:

§ Inadequate funding for the Rural Water Supply & Sanitation (RUSS) at LG level - We would like to commend government for the increase of funds allocated to the sub-sector from UGX 30.6bn to UGX45.6bn in the FY 2013/14 and FY 2014/15 respectively at the national level. To this extent, the increase in resource allocation to the Urban Water Supply and Sanitation (UWSS) and Water for production vote functions in the Ministry of Water & Environment is plausible.

§ We however note with concern that these same vote functions at LG level are grossly underfunded. The RWSS budget at the LG level has not changed and is fixed at UGX 62.4bn. According to the NBFP FY 2014/15, lack of transport which hampers the work of district extension staff; and lack of appropriate technology for flood-prone areas as well as areas with collapsing soils especially in Eastern Uganda continues to haunt the RWSS at the LGs.

§ Access to safe water in the rural areas is stagnating and this is attributed to the de-commissioning of some point sources which have remained non-functional for over 5 years. Similarly costs for water supplies are increasing due to increasing environmental degradation, climate change and declining water quality and quantity. There is also the problem of inadequate capacity in Higher and Lower Local Governments (LLGs) to adequately support implementation of the water and sanitation activities and environment management.

Recommendation

• Thereisneedtosignificantlyincreasethefundsallocatedunderthe sector budget to the District Water and Sanitation Grant.

68. Inadequate preparation for potential environmental shocks - Uganda is expected to exploit its oil resources for a fixed period of time after which the deposits will be exhausted. The potential negative impacts of oil exploration may include reduction in tourism revenue and pollution-related diseases if stringent mitigation measures are not adequately implemented. Government plans to construct oil pipelines transporting the refined resource from Uganda to other East African countries are welcome but extra steps should be taken to ensure that there will be no destruction of natural ecosystems.

Recommendation

• There is need for government to invest in environmentalconservation and restoration programmes with respect to oil exploitation in Uganda. An Environmental tax levy on oil production schemes is recommended to generate revenue for financing such environmental programmes including tree planting, watershed protection and wetlands management.

70. High encroachment on wetlands - There is massive encroachment of wetlands especially urban areas for settlement and industrial growth due to unclear land use planning and corruption. The Environmental Protection Force which would otherwise have protected the environment and enforced the law has not been budgeted for in the FY2014/15 to adequately carry out its enforcement and protection role of particularly wetland resources across the country.

Recommendations

• There is need for an adequately well trained, well-fundedEnvironmental Protection Unit that is maximally deployed around the country to curb illegal encroachment in wetlands.

• Governmentshouldendeavour toharmonize itsenvironmentallaws particularly with regard to natural resource tenure in order to curb encroachment on wetlands.

30

3.5 Works & Transport Sector

71. The works sector has been steadily operating and not often affected by huge budget cuts. In the FY 2013/14 the sector was allocated UGX 2,510.7bn and UGX920bn had been released by December 2013. The NDP recommends that the sector should receive at least 21.3% of the national budget but this hasn’t been achieved so far as it currently stands at 19.2%. Although the projected sector budget has increased to UGX 2,575.5bn, the sector share has reduced to 18.1% of the national budget.

Table 11: Works & Transport sector budget for FY 2014/15

FY 2013/14 Approved budget

Projections 2014/15


Non-wage 392.13 467.38

Development GoU 1,409.65 1,409.65

Ext. Fin 680.852 670.478

GoU Total 1,829.81 1,905.06

Total GoU+Ext. Fin=MTEF 2,510.66 2,575.53

Non-Tax Revenue 2.603 2.603

Grand Total 2,513.26 2,578.14

In the FY 2014/15, the total development budget is projected to be UGX 2,079.67bn of which UGX 670.5bn (32%) is to be sourced from donor funding.

Figure 10: Intra-sector allocations for the FY 2014/15

3.5.1 Key Sector Concerns

72. Lack of Value for Money in sector expenditures - Despite the huge budget allocations to the sector compared to other priority sectors like health and education, there are still glaring gaps observed in the performance of the works and transport sector. For example the aAuditor General’s report 2012 indicates that Uganda National Roads Authority (UNRA) overpaid UGX 47 billion to various contractors on three road construction contracts arising from errors in the application of variation of price formula used in computing compensation amounts.

Recommendation

• We recommend that the ministry embraces open contractingthrough which transparency and accountability for public resources can be enhanced. More information on contracting should be availed to the public to enable effective monitoring of the construction work. The only way to promote appropriate contract management is by keeping the public and other relevant stakeholders in the know.

Source: National Budget framework Paper FY 2014/15

31

73. Operationalisation of the Uganda Road Fund (URF) Act 2008. Since the URF enactment in 2008, it has continued to operate as a department of the Ministry of Finance and not as it was envisaged in the URF Act. According to the URF Act, 2008 the road user charges were supposed to be collect and be directly transferred to the URF account but this is not yet done as the fund still draws its monies from the consolidated fund.

74. It has been argued that the URF being roped into the Medium Term Expenditure Framework (MTEF) budgetary process has made it difficult to predict with any degree of certainty that the designated agencies programs will be funded adequately, reliably and in a timely manner. It has thus become very crucial for the direct transfer of the RUCs to the URF account such that funding road maintenance can be stable and predicate.

75. The sources of finances for the URF as envisaged in section 21 of the URF Act, 2008 include fuel levies, transit fees, road license, axle load fines, tolls, traffic and road safety fines, appropriations by parliament and donations/grants. The road license which is one of the proposed sources of revenue for the Fund was abolished in the Budget of FY 2007/08. The other possible finance sources listed are not operational or provide very insignificant amount of resources. The major source of revenue clearly identified at the moment is the fuel levy.

Recommendation

• It is imperative that the Uganda Revenue Authority Act isamended to allow the direct remittance of the RUC’s directly to the URF account.

76. Limited absorption capacity - Limited absorption capacity by some agencies under the works sector has been identified as an impediment. A case in point are the maintenance funds allocated and released but are all not utilized as some agencies have had low absorption of the funds leading to delayed implementation of the planned works. This leads to significant roll over of funds to the proceeding financial years as shown in table 10 below. District Urban Community Access Roads (DUCAR) roads carried over un-utilized funds of UGX 3.922bn to FY 2010/11 followed by Uganda National Roads Authority (UNRA) that had unutilized funds amounting to UGX 1.159bn. KCCA carried over

UGX13bn that had not been utilised in the FY2011/12. This had been accumulated over three years, followed by districts that did not utilize over UGX 3bn and this was rolled over into the proceeding financial year. Much improvement is noticed with UNRA which had 50 million unutilised and rolled over into FY 2011/12.

Table 12: The Rollover of Maintenance Funds (2009/10-2010/11)

Network

Agency Carried Over to

FY 2010/11 (UGX bn.)

FY 2011/12 (UGX bn.)

FY 2012/13**

National UNRA 1.159 50.81

KCCA

3.922

13,272.56*

DUCAR Districts 3,881.16

Municipalities 809.96

Community Access Roads

Totals 5.081 18,014.49

We are also concerned about the value for money in road construction and delays in completion of road works. A case in point is the Mbale-Soroti road, whose construction has over delayed and the quality of the roads is questionable. In addition, the cost of road construction in KCCA has been noted as very expensive compared to the national average. Budget allocation to such agencies is done cognizant of their absorption capacity. There is need for a strict adherence to work plans for appropriate implementation. There is also great need to emphasize the early commencement of the procurement of road works. However there is also great need for Ministry of Works and Transport (MoWT), Ministry of Local Government (MoLG) and Public Procurement and Desposable Authority (PPDA) to play a key role in addressing the capacity constraints at the agencies levels.

Recommendation

• Weproposean increase in funding forDUCAR toenable localgovernments to undertake repairs of community roads.

32

77. Citizens’ participation in government procurement - On strengthening accountability in public service delivery, Hon Maria Kiwanuka in the Budget Speech 2013/14 said that “the main challenge of service delivery in Uganda is not lack of sufficient financial resources, but the achievement of maximum efficiency and effectiveness in the utilization of limited resources. Challenges to service delivery include delayed implementation of government projects, lack of adherence to financial management procedures, as well as corruption and misappropriation of public resources and that the government is committed to improving transparency and accountability in order to achieve enhanced service delivery”, for which several reforms have already been undertaken.

78. Noting closely were the Rollout the Integrated Financial Management System (IFMS) in all Government Ministries, Departments and Agencies; as well as the review the Public Investment Plan (PIP) projects to include only those for which cost-benefit analysis and feasibility studies have been conducted and for which sources of financing have been secured.

Recommendation

• Basing on the observation embedded in the concern above,there is need for government to make such systems (IFMS) open to access by civil society (CSBAG) for purposes of constructive engagements and also as a means of improving the quality of citizen feedback. There is also need for government to consider Civil Society in the processes of reviewing public investment plans at all levels such that the views from the grassroots are adequately catered for.

3.6 Social Development Sector

79. The Social Development Sector works to strengthen communities’ rights and provide them with social protection. Its major focus is to empower communities to harness their potential through cultural growth, skills development and labour productivity. The sector is led by the Ministry of Gender, Labour and Social Development (MGLSD) and works closely with affiliated statutory institutions established by

Acts of Parliament which include, inter alia, the National Women’s Council, the National Youth Council, the National Council for Children, National Cultural Centre, the National Library and the Industrial Court.

Table 13: Social Development Sector Budget Allocation FY 2014/15


Projections 2014/15

Recurrent

Wage 2.962 2.907

Non-Wage 24.572 24.572

Development

GoU 18.313 24.730

Ext. Fin. 0.000 2.090

GoU Total 45.848 52.209



Grand Total 46.224 54.676

The Social Development Sector budget projection has increased from UGX 46.2bn to UGX 54.67bn in the FY 2013/14 and FY 2014/15 respectively. This is an 18% increment from the current FYs allocation. In terms of proportion to the national budget, the sectors allocation has increased from 0.3% in the FY 2013/14 to 0.4% in the FY 2014/15.

Figure 11: Intra sector allocations for the FY


33

2014/15

80. Whereas the rest of the vote allocation projections have remained constant, it’s only the Ministry of Gender, Labour and Social Development that is projected to receive an additional projected allocation UGX 8.5bn in the FY 2014/15. In the FY 2014/15 the MGLSD’s projected budget is UGX 43.857bn of which UGX 25.2bn (57.47%) is entirely on policy, planning and support services.


81. Inadequate funding to the sector: Accord ing to the NBFP FY 2014/15, the sector MTEF ceiling lies at UGX48.25bn. This is extremely low for the sector which covers the whole country under community development and empowerment to deliver on its mandate. The Ministry has huge expenditure such as rent (UGX 2.43bn), council subventions (UGX 3.88bn) and others which make the sector ceiling inadequate. Furthermore, the establishment of regional Equal Opportunities Commission (EOC) offices and enhancing the salaries of the EOC staff are some of the neglected yet crucial expenditures.

Recommendation

• Westronglyrecommendthatthecurrentsectorceiling be revised upwards.

82. Inadequate funding for Community Develop-ment function in the LGs: According to the NBFP the CDF at LG has been allocated UGX 400million for FY 2014/15 upto FY 2017/18. Our analysis has shown that each LG on average will receive UGX 50,000 per quarter for the CDF. This amount is further reduced by bank charges, transport to collect it and inflation. The Ministry requires UGX 7.2bn to fully develop the CDF at LG level.

Recommendation

• Westronglyurgegovernmenttoincreaseresource allocation to the CDF to operate

effectively and efficiently.

83. Non-operationalization of the Kiswahili Council: Under the Decision (EAC/CM/10/Directive 05) EDUC C10, made by the 9th Council of East African Community (EAC) Ministers, all member states should establish National Kiswahili Councils under the Ministry responsible for Culture to promote trade and labour movement within the region. We would like to bring to the attention of government that the Kiswahili Council is not in place due to lack of UGX 1.9bn to start it.

Recommendation

• For Uganda to competitively to participate inregional politics and trade, it’s imperative that the Kiswahili Council is put in place to guide and oversee the implementation of Swahili as the national language.

3.7 Trade, Tourism And Industry Sector

84. Trade can be a very powerful tool for poverty eradication, creation of employment and the promotion of sustainable development. Trade is central in the realization of Vision 2040: “To transform Uganda from a low income to a modern middle income country within 30 years”.

85. The contribution of the trade and industry sector to Uganda’s GDP has risen from 37.2% in FY 2004/2005 to 43.3% in FY 2011/2012 growing at an average of 7.7% per annum reflecting the relative importance of the sector. The Trade, Tourism and Industry sector contributed 30% to GDP in the FY 20112/13. In the FY 2013/14, it was allocated UGX 57.8bn (0.44%) of the national budget. This resource envelope however is still not sufficient to boost the trade sector in Uganda.

The Ministry has

huge expenditure

such as rent (UGX

2.43bn), council

subventions

(UGX 3.88bn)

and others

which make the

sector ceiling

inadequate.

33

34

Table 14: Social Development Sector budget for the FY 2014/15


Projections 2014/15


None wage 17.557 23.876

Development GoU 21.32 21.46

Ext. Fin 2.949 8.852

GoU Total 51.757 59.407

Total GoU + Ext Fin 54.706 68.259

NTR 5.759 6.115

Grand Total 60.465 74.374

In the FY 2014/15, the total sector budget projection is set increase to UGX 74.374bn from UGX 60.47bn in the FY 2013/14. We welcome government efforts in increasing the sector budget as trade and tourism are key sectors that contribute to national development. However the sector faces a number of challenges that need to be addressed.


86. Growing trade deficit: The trade deficit is growing at an increasing rate- it was reported to be USD 2,373.35million in 2010/11, USD 2,581.07million in 2011/12 and it was reported to have increased to USD 2,617million in May 2013 by Bank of Uganda. In January 2014, the trade deficit was reported to be USD 288.30 Million. This can be attributed to the continued export of raw materials & importing finished/value added products. Uganda has a systemic trade deficit as a result of the country’s dependence on fuel imports. Uganda is also a net exporter of agricultural products such as coffee and cotton.

Recommendations

• We urge government to encourage back ward and forwardlinkages with the agriculture sector in various value chains. This will encourage vale addition and improve the value of the agriculture export thus reduce the trade deficit.

87. Establishment of a Cooperative Bank - Cooperatives which enhance collective marketing have greatly disintegrated and closed up. While the Budget Framework Paper FY 2014/2015 recognizes that cooperatives play a vital role in job creation, food security and reduction of post-harvest losses, there has hitherto been an inadequate government effort to revive them. For example, limited government funding and political interference have hampered many of their operations, in the process, hindering some of the cooperatives from functioning efficiently.

88. We applaud government efforts on improving availability of affordable financing to agriculture and micro and medium enterprises development including restoring Uganda Cooperative Bank. The reestablishment of the Cooperative Bank is long overdue since in almost all developed countries support to small scale farmers and entrepreneurs has been a successful strategy for inclusive economic development.

Recommendation

• Weadvisegovernmentthatinsteadofspendingresourcesonthestudy to confirm the already known, let government use these resources to remodel the Agriculture Credit Facility, support the Current Bill on Agriculture Bank to establish a cooperative bank.


35

4.1 Fiscal Decentralization89. We commend government on the proposal to simplify the various

conditional grants by reducing the number of conditions. This will give more flexibility to local governments to address their peculiar needs in service delivery. We therefore, request government to go beyond reducing the number of conditions to also allocate more funds (beyond the current 20%) local government programmes since they are at the frontline in service delivery. The situation is not good even at the sectoral level where less money is spent at the local government level as illustrated in figure 12.

4.2 Public Administration90. We commend government on the proposal to freeze the creation

of new local governments. This will save the country resources that can be used to improve service delivery in the sectors such as health, education and agriculture. However, government has continued to experience difficulties in payment of allowances, ex-gratia, salary and gratuity of political leaders due to lack of adequate information. We believe that this challenge can be addressed through expediting

4

OTHER BUDGETARY ISSUES

Figure 12: Percentage share of Local Government to Selected Sector Budgets FY 2014/15

36

the process of electing lower level LCs (LCI, and LCIIs) and providing support for their effective functioning. The current LC system is weak, disoriented and demotivated and has outlived its usefulness. We request government to allocate funds in the next year’s budget for election of LCIs and LCIIs.

4.3 Salary Enhancement for Public Servants

91. We applaud government provision of an additional UGX 450bn for the enhancement of Teachers’ and other Public Servants’ salaries in the FY 2014/15. We are however concerned that this amount is not sufficient to address the salary demands especially among teachers. There is therefore the need to allocate additional resources. Secondly, government should expedite the establishment of a salary review commission to harmonise salaries and remuneration of public servants.

4.4. Court Awards:92. While we appreciate government’s decision regarding ministries being

responsible for court awards from their MTEF provisions, we further propose that in cases of violation of human rights by individuals, such individuals should be held liable to pay for the damages and compensations to the victims, rather than using tax payers’ money.

4.5 Decisive action on theft of public funds:

93. Corruption has continued to rob Ugandan citizens of the right to enjoy public services that they pay for through taxes. Corruption in Uganda has changed shape, thus requiring more innovative ways of tackling it. A Human Rights Watch Report released in 2013 documents Uganda’s failure to hold the highest members of its government accountable for large scale graft. A lack of political will has crippled Uganda’s anti-corruption institutions and thus undermining any efforts towards fighting corruption. To date it remains unclear how many actors have been brought to book or how much of the stolen funds has been recovered.

94. In addition there is limited effort towards addressing petty corruption especially at local levels, yet it is killing the moral fibre of the Ugandan economy. For instance, teacher and health workers absenteeism are clear cases of petty corruption. We urge the government to expedite the proposed anti-corruption amendment bill that seeks to ensure that corrupt officials first of all refund the lost/embezzled funds, suffer imprisonment and forthwith forfeit public office for life. This will serve to deter the practice and enforce zero tolerance to corruption.

4.6 Gender and Equity Issues95. The Budget Call Circular demanded that government agencies address

gender and equity issues through allocation of resources. However, most sectors continue to allocate resources without considering the gender and equity concerns. We request the Ministry of Finance Planning and Economic Development to put in place enforcement mechanisms that should penalise sectors which do not comply and reward those that do.

96. In addition, in order for Parliament to take its central role in promoting gender equality, we propose that before Parliament debates and approves the annual budget, a “” is produced to show the extent sector plans and budget address gender and equity concerns.

4.7 Climate Change and Disasters97. Climate change threatens to undo decades of development efforts in

a short time as has been witnessed in some regions of the country. Climate-related disasters, droughts, floods, landslides, wind and hail storms are estimated to destroy 800,000 hectares of crops annually leading to economic losses worth USD 75 million (USh173 billion). Additionally, economic losses resulting from destruction of civil works, transport accidents, epidemic outbreaks, and climate-related conflicts are estimated to cost well over USD 31 million (USh72 billion) annually.

98. However, the current budget architecture does not address climate change. According to a study by ACODE and ODI, the total spending on climate change-relevant activities is estimated at less than 1 percent of total government expenditure, and this has remained broadly constant over the four year period, 2008/90-2011/12. This

37

level of spending is about 0.2 percent of GDP, which is in stark contrast to that recommended in the draft Implementation Strategy of the Climate Change Policy of around 1.6 per cent of GDP.

99. We request government to prioritize the climate change implementation strategy and ensure that all priority national investments, the proposed timeline and funding requirements are met. In addition, the necessary capacity of all relevant institutions especially at local government level, should be built to allow implementation of priority actions.

5.0 CONCLUSION100. Budgets are an important political instrument used to address

people needs. The welfare of the citizens is totally dependent on the way resources are mobilized, allocated and utilized. We urge government to continue its budget reforms that are geared towards improving efficiency and effectiveness in delivery of public services. As CSOs our watchdog role will be enhanced to ensure that what is entitled to citizens is actually delivered in its right quality and quantity.

FOR GOD AND MY COUNTRY

37

We applaud

government

provision of an

additional UGX

450bn for the

enhancement of

Teachers’ and other

Public Servants’

salaries in the FY

2014/15.

3838

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Ministry of Education and Sports, Education Statistical Abstract 2011

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United Nations Educational, Scientific and Cultural Organisation (UNESCO),

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38. Lubogo K Parliament-MP 0776113377 [email protected]. Tebasoboke Paul MAFA 0776756920 [email protected]. Lubwama Kagoba TOP TV 0792515154 [email protected]. Moses Ssonko MoF 0772645293 [email protected]. Openji Ben KANYOA 0704635626 [email protected]. Helena Okiring UWONET 0773251861 [email protected]. Okurut Henry UBC-TV 0779727353 [email protected]. Lwanga Andrew WBS-TV 070201227946. Kenna Buoli WBS-TV 0701043154 [email protected]. Allan Kiyonsa FUF 0705433786 [email protected]. Mawere Sam AGN 0775824038 [email protected]. Mukisa Daniel Life TV 0703858064 [email protected]. Ekakoro Friedrick AYDL 077260171 [email protected]. Kamara Nelson Hunger Fighters Uganda 0774367284 [email protected]. Atuku Salome TAC Monitor 077165498353. Musenze David UBC-TV 0712399836 [email protected]. Evas Kanyesigye CSBAG 0705558802 [email protected]. Mdhaye Moses KFM/Dembe 0772882126 [email protected]. Nassaka Zam Community 0700950120 [email protected]. Echoru Charles VEDCO 0782709535 [email protected]. Wanyama Maureen Uganda Youth Coalition 0785136241 [email protected]. Ayen Angol CSBAG 077583024460. Mbabazi Faustia CSBAG 077292830261. Tukahirwa Andrew CSBAG 0774500353 [email protected]. Magumba Emmanuel PEFO 075349110863. Opus Herbert CIDI- 0782536203 [email protected]. Bunjo Vincent UNAD 077431960865. Mirembe Loyce IST 07853229567. Jimmy Siya The Independent Magazine 0704113122 [email protected]. Mukunda Julius CSBAG/Coordinator 077635845 [email protected]. Grace Alupo Water Aid- 0778673960 [email protected]. Nduhura Sam PLAN-Uganda 0702965648 [email protected]. Naula Harriet Kibuku District 077430358572. Annet Nantongo UNNGOF 0775881331 Anantongo2ngoforum.or.ug73. Isiiko Richard NGOF Kibuku 077564850374. Tonny Akera AWOTID/PM 0777355535 [email protected]. Okot Kenneth Agago District 07778606276. Lokeris Elly ARELIMOK 0774311401 [email protected]. Nabadda Cotilda UWONET 0775268658 [email protected]. Oheru Huel Parliament 0782021906 [email protected],ug79. Nakawuya Aisha Radio Simba 0752485784 [email protected]. Charles Olweny VEDCO 078241053781. Ketty Adoch FOF 0712200758 [email protected]

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82. Araali Peter Media 0782401237 [email protected]. Ashah Mwanga ARF 0772665515 [email protected]. Moses Akena NTV 0772886176 [email protected]. Paul Tajuba Daily Monitor 0715149285 [email protected]. Odong Micheal FOWODE 077759258987. Maggie Kigozi CSPPSI 0752717475 [email protected]. Felix Oketch Busoga Farmers Association 0752651749 [email protected]. Kanyange Mauricius Prophix studio 0703185575 [email protected]. E. Suruma UDN 077265727692. Odwori Eddy MUK 078595664 [email protected]. Opio Samson soruda 079453777 [email protected]. Turyahikayo Baker AZN 077496290395. Mugena Stella UDN 077317001 [email protected]. Nakyobe Teddy Parliament 0782043367 [email protected]. Jimmy Odyek RWEKO-Kasese 0772184582 [email protected]. Mood Katende UMAH- Kiboga 0774431350 [email protected]. Kaakilya laren PEFO 0705407416100. Amoding Jane Amuria District 0779682980101. Abach Simon Amuria district 0774972468102. Okiror Sandra Amuria district 0774972465103. Lilian Senteza ACCU 0703389840104. Ariko Negry J Marlin 0713274566105. Mande Aaron Bufa Caritas jenga 074089099106. Kabayanya Carol ACTV 0772314001107. Myoya Scola Kibuku 0753924600108. Pius Kiswa Capital Fm 0701143185109. Iligo Vicky CIDI-Soroti 0774219323110. Geofrey Tayasin ARF 0777495646 [email protected]. Alice Basoboke Rukiga Dev’t Network 0701319200 [email protected]. Moses Mulondo Vision Group 0712673386 [email protected]. Oketcho L. Micheal UMA 0755255809 [email protected]. PaulineApolot DGF 0772406494 [email protected]. Richard Mugisha PELUM 0772428663 [email protected]. Christine B UDN 0772934003 [email protected]. Busuulwa Frank Grassland Foundation 0782864883 [email protected]. Pamela Kamissime UDN 0706112410 [email protected],ug119. Lassura Allan Record TV 0702472733 [email protected]. Asiimwe George ESSAF 0752528559 [email protected]. Joseph Mugyendo IRI 0774140892 [email protected]. Kinobe Susan NAWOU 0781454566 [email protected]. Baba Diri MP 0772593943 mdbaba@parliament,go.ug124. Apai Susan Parliament 077282833

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125. Regina Marugo SEATINI 0773242821 [email protected]. Fred Ojambo BLOOMBERG 0752693208 [email protected]. Kabuye Wahihi Doboozi 0773832912 [email protected]. Nalubanja Florence Parliament 0753254879 [email protected]. Julius Busingye The Independent [email protected]. Kayondo Yusuf MamFM 0705450950131. James Anguret Monitor Publications 0704187713132. Kasozi Samson WECADI 0772879705 [email protected]. Kwizera Derrick HRMAU 0792119321 [email protected]. Abwisse Business 0752808923135. Nakato Joyce BukkFM 0785527729136. Lowila CD Parliament [email protected] 0772951066137. David Magule MAK 0781538807 [email protected]. Ssewayi Godfrey DTR 0772602088 Ssgefry2yahoo.com140. Angela Nabwowe ISER 0774261618 [email protected]. Nantale Mwane CSBAG 0782097683142. Ambrose Tolit Dan Church Aid 0392841225 [email protected]. Opio Paul BIRED 0773047304144. Jackie Nantale Record TV 0783450112145. Ekwe Ocen Benson PAC Uganda [email protected]. Ochola James RACI [email protected]. Silvia Nyambura CEO Magazine 0753308522 [email protected]. Kabanda Jude EATDN 0776360011149. Atukwase Rita IST 0772415236 [email protected]. Steen Mondo CRDF 0773019075151. Okot Sam B ICAC 0772670745 [email protected]. Muhumuza Julius Impact fm 0788070941 [email protected]. Muhumuza Edward Urban TV 0702690320 [email protected]. Frank Kibulya AUFC 0772354175 [email protected]. Solomon Lubwambula Power fm 0756509939 [email protected]. Manafa M ENEMBA 0772375962157. phillipKurera UJCC 0784134653 [email protected]. Kisaame E Keith ACODE 07126441820 [email protected]. Emmanuel Oluka CEWIT 0782020735 [email protected]. Sewanja Alex RAPEX 0774503416161. Jimmy Musiime Africa 2000 Network 0772557018 [email protected]. Babirye Rita Joyce fertility support center 0788131685163. Jeff Wadulo Jenga Africa 0772500726 [email protected]. Akika Ivan ACCU 0774882339 [email protected]. Juliet Nakyanzi EASSI 07139391196 [email protected]. Tendo Edut PELUM 0782987699 [email protected]

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167. Rev. Nelson Baluku New Eden of 0782309778168. Jane Kule New Eden Kasese 0789316363 jkule169. Mike Nabembe Synovate/PSOS 0704550567170. Kigenyi Eric ORUDE 0702930328 [email protected]. Mwesigwa c PBC CSBAG 0784463080172. Nahamwe Amos MK Logistics 0775204209173. Tenywa Godfrey UNAD 0774359585 [email protected]. Nabwire Teddy IST 0787823413175. Nabude Belinda PA Parliament 0703250706 [email protected]. Agripinner Nandhego UWOPA-Coordinator 0772695423 [email protected]. Oryema Fracncis o PAIMOL SACCO 0781069111178. Mugala Nasimu NAREDO 0778869863179. Kitata Aboun MP 0772459665180. Walakira David CSBAG 0705558804 [email protected]. Mbabazi Olive FOWODE 078243858 [email protected]. Safina Nalule MP 0774264494 [email protected]. Lydia Kobusingye CSBAG 0705558801 ikobusingye@csbag,org184. Adango C PACONET 0785173512185. Ninsima Jenina CSBAG 07055588013186. Mukundane Albert CARITAS 0772416201187. Katama B. James CSBAG 0752971281 [email protected]. Eunice Musiime NNGOF 0772429837 [email protected]. Carol Namagembe CSBAG 0772570427 [email protected]. Birra Kiwanuka MICOD 0773742254 [email protected]. Kagoya Lydia PELUM 0774728358 [email protected]. Mbazira A PMI Uganda 0776884198194. Kashaki John CSBAG-Sheema 0702171265 [email protected]. Adellah A UDN 0702171265 [email protected],ug196. Obonyo David CSBAG 0775898537197. Tim Lwanga Parliament 0772200167 [email protected]. Uwimana Doreeen CSBAG 0705558806 [email protected]. Biringi Norman ULGA 0772894170 [email protected] Elliot Orizaarwa WEGCDA 0702976023 [email protected]. Alanyo Goretti EADEN 0712255201202. Kilama Richard Pader Distric 0781606437203. Okello Denny CSBAG 0787639089204. Twongirey Godfrey CSBAG 0783899700205, Luliibe Charles Caritas Kampala 0777102202206. Mubiru Charles Caritas Kampala 0705515916 [email protected]. Ochan Quinto Abim 0781307486208. Tinner Areba CSBAG 07055588012 [email protected]

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A Ugandan with a people centered budget that dignifies humanity.

Working towards ensuring that budgets at local and national levels are financed, designed, implemented and monitored to promote prudent and transparent allocation of national resources for the benefit of marginalised groups.

CONTACTPlot 15 Vubya close, Ntinda-Nakawa RoadP. O. Box 660, Ntinda, UgandaFixed Line: +256 414 286063, Mob: +256755202154E-mail: [email protected] |Web: www.csbag.org

C S B A G

Budgeting for equity

@CSBAGUGANDA CSBAG/facebook.com

OUR VISION

OUR MISSION

Every Shilling Counts: Citizens' Perspectives on the National Budget Frame work Paper FY2014/15

Economy & Finance

Transcript of Every Shilling Counts: Citizens' Perspectives on the National Budget Frame work Paper FY2014/15