Donor aid cuts are set to shrink allocations to various sectors, especially security and education, the 20142015 national budget framework paper shows.
The paper was tabled before Parliament on Tuesday by junior Finance Minister Fred Omach. It projects the total resource inflows at Shs 14.3 trillion.
“These are comprised of Shs 10.1 trillion from domestic revenues, Shs 221bn of budget support, Shs 2.6 trillion from project support, and Shs 1.6 trillion domestic financing on a net basis from the banking system,” the paper says.
In the paper, Finance Minister Maria Kiwanuka says there is not much projected increase in external funding next financial year.
Before the last financial year, donors cut budget support because of government corruption, while this year tensions have arisen after President Museveni assented to the Anti-Homosexuality Act, a law hugely popular in Uganda but condemned by human rights activists and Western countries.
Kiwanuka says domestic resources will cover 82 per cent of the budget.
“Total external financing of the budget is projected to remain broadly at the level of FY 201314. Budget support is waning down as an instrument of external support,” Kiwanuka wrote.
The aid cuts would mostly affect the UPDF, with a projected cut of external funding for its African Union activities. Further aid cuts are expected in the Office of the Prime Minister, ministry of Education and Sports, and that of Public Service, which has been receiving foreign funding under the Uganda Public Service performance enhancement programme.
Kiwanuka proposes to cut the security budget by Shs 43bn. Education will take a cut of Shs 62.2bn, while public sector management will lose Shs 23.4bn compare to last year’s budget.
Some budget sectors, however, will see a rise in their allocations. For instance, Shs 450bn was allocated to the enhancement of public servants’ salaries the public administration budget will rise from Shs 398.3bn to Shs 504bn, and that of the ministry of Works and Transport from Shs 2.5trn to Shs 2.58trn.
The health sector will get Shs 1.197trn, up from Shs 1.127trn while the energy sector will get Shs 1.711trn, compared to Shs 1.675trn last year.
Kiwanuka explained that the increments in these ministries’ budgets was “largely on account of salary enhancement and preparations for general elections.”
MPs heard that domestic revenue collections would grow by about 20 per cent. Uganda Revenue Authority’s collections are expected to rise from Shs 8.534trn to Shs 9.834trn, and non-tax revenues from Shs 270.6bn to Shs 292.6bn.
Kiwanuka is also proposing to introduce taxes on all goods and services being procured by government.
Source : The Observer