in the next financial year, to ensure that resources allocated in the budget are properly utilized.

Regarding domestic arrears, he affirmed that government is working on clearing up the backlog of arrears which have accrued overtime. He however mentioned that as Ministry of Finance they are challenged with the issue of inflated bills by some indiscipline officers within government. He sighting an example of the Mulago Hospital where it presented a bill of over Ushs 6bn, for water and yet investigations by Ministry of Finance revealed that the actual bill was close to Ushs 4bn.

He stated that the installation of pre-paid water meters is aimed at helping government to conserve and monitor their consumption of water so as to help government departments and ministries plan their bill payments.

He reiterated the Permanent Secretary’s call and urged CSO to enhance citizen’s participation to ensure better budget performance, transparency and accountability

CSBAG BUDGET NEWS BRIEF

52ND EDITION |11TH -17th May 2014

...advocating for people centered budgets that dignifies humanity

Permanent Secretary/Secretary to the Treasury receives CSBAG position on the 2014/15 Budget

He further noted that government needs to

implement tax reforms to tackle its recent revenue

shortfall. Stating that the URA short falls recorded

in this financial year erode the revenue base for

the 2014/15 financial year. With these shortfalls,

Mr. Mukunda stated with the current rate, it will be

extremely challenging for Uganda to meet the

minimum requirement for joining the EAC

Monetary Union which among other things require

a country’s Tax-to–GDP ratio to be at 25% for at

least three consecutive years.

Julius Kapwepwe, the Director of Programmes at

Uganda Debt Network, in his submission warned

government on the escalating domestic debt

which is projected at UGX1, 647.2bn in FY 2014/15.

If not controlled, Mr. Kapwepwe warned that this

could make the crowding out effect of the private

sector worse.

In his remarks, the Director Budgets, commended CSBAG for its quick analysis of the budget framework paper and for having involved ministry of finance in its pre- budget dialogue which was held in April 2014. In his response to the CSBAG concerns a call was made for CSBAG to enhance its support to government in monitoring government budgets in order to ensure value for money for all government programmes. He assured CSBAG that Ministry of Finance Planning and Economic Development is tightening measures on ensuring Budget discipline

Produced by the Civil Society Budget Advocacy Group (CSBAG). Vubya close, Ntinda Nawaka Stretcher Road| P.O BOX 660, Ntinda Fixed line +256 755202154 |website: www.csbag.org, Email: csag@csbag.org

The Permanent Secretary /Secretary to the Treasury in the ministry of finance, Keith

Muhakanizi, urged civil to support government

adequately monitor budget

implementation... Muhakanizi was addressing members of The Civil Society Budget Advocacy Group during a meeting on the National Budget Framework Paper of the 2014/15 financial year which was held at the Ministry Of Finance headquarters in Kampala on Friday 16th May 2014.

The Secretary to the Treasury urged Civil Society Organisations (CSOs) to be more vigilant on monitoring the national budget. Accordingly, he also underlined that Ministry of Finance is working out a mechanism to ensure that the budget is clean and its time framework maintained – that is, by the end of June every year.

The meeting which was part of the CSBAG strategies of engaging government on the Budget for the upcoming financial year 2014/15 was chaired by the Ministry of Finance Director Budgets Mr. Kenneth Mugambe and also present was the Ag. Commissioner Budget’s Mr. Laban Mbulamuko.

The issues presented ranged from addressing Macroeconomic issues such as; Inflation, Revenue performance, Supplementary budget, unemployment and job creation, high lending rates, curbing corruption, dwindling finance to Local Government, and to the increasing public debt. Other sectoral issues such limited funding for Agriculture, Salary enhancement to civil servant, establishment of salary review commission, decentralization of payroll system and many others. A detailed paper can be found on our website: CITIZENS’ PERSPECTIVES ON THE NBFP 2014/15.

Speaking about agriculture, Julius Mukunda, the Coordinator of the Civil Society Budget Advocacy, mentioned that although the private sector led growth approach is feasible in the mining, industry, services and construction sectors, it does not seem to work well in the agriculture sector due to the unique attributes and connections the sector has with the social-economic foundation of more than 70% of Ugandans. He warned that leaving the agriculture sector to the private sector is putting the majority of the Ugandans at the mercy of unscrupulous business men are majorly profit oriented.

The Permanent Secretary /Secretary to the Treasury, Ministry of Finance Keith Muhakanizi (standing) addresses members of Civil

Society Budget Advocacy Group during a meeting at ministry of finance headquarters in Kampala on Friday.

Budget news that made headlines in the media

Civil Society Budget Advocacy Group (CSBAG) P.O. Box 660, Ntinda| Plot 15 Vubya Close, Ntinda Nakawa Rd | Fixed Line: +256-41-286063 | Mob: +256-755-202-154

| E-mail: csbag@csbag.org |Web www.csbag.org | @CSBAGUGANDA CSBAG/Facebook.com

Law makers drop proposal to tax phones, turn to vehicles and mobile money A proposal for every mobile phone user in the country to pay an annual Shs5,000 tax for each handset was dropped by MPs yesterday as the House Budget Committee proposed new taxes, including annual inspection fees for all motor vehicles and a levy on mobile money deposit transactions. Proposals to either introduce new levies or raise current ones were justified by a need to widen the country’s tax base, the committee noted. Read more>>>

BOU targets commercial banks over high interest rates COMMERCIAL banks in Uganda are not heeding to Bank of Uganda’s call to reduce interest rates and lend more to the private sector. High interest rates have put off many borrowers in Uganda. Bank of Uganda reports state that there has been only a modest increase in the stock of private sector credit. It said the level of private sector credit at the end of December 2013 was sh8.62 trillion, which is about 8% higher than the June 2013 levels. Read more>>>

IMF tells gov’t to invest in areas that will create jobs

The IMF has urged government to direct public expenditure on areas that support economic growth and job creation in the coming years to tackle the unemployment and poverty problem. Uganda faces the challenge of increasing unemployment especially among the youth. Through free Universal Primary and Secondary Education, the Government expects to eradicate abject poverty and backwardness in society. Read more>>>

IMF asks Uganda to avoid debt crisis.

The International Monetary (IMF) has asked the Uganda government to avoid accumulation of domestic arrears and increased domestic borrowing as these might lead to a domestic debt crisis. Uganda is currently faced with a large volume of arrears which stand at about Shs2.2 trillion, while at the same time it has heavily borrowed from the domestic financial market to the tune of Shs1.7 trillion using treasury bills and bonds. Read More>>>

Watch this video of Nelly Busingye of SEATINI-Uganda a CSBAG member in a discussion about alternative Revenue generation ahead of Budget day

.

CLICK HERE TO WATCH VIDEO

FY 2014/15 BUDGET FACTS

Social Development Sector Budget

Social Development Sector Allocation by Vote Function FY 2014/15 (Ushs Billion)

Vote/Vote Function Approved Budget-

FY 2013/14

FY 2014/15

Yr-Yr Change

(Amount Bn)

Change (%)

MGLSD 35.40 43.85 8.45 24%

o/w Community Mobilization and Empowerment

2.03 2.13 0.10 5%

o/w Mainstreaming Gender and Rights 1.70 1.95 0.25 15%

o/w Promotion of Labour Productivity and Employment

3.93 4.23 0.30 8%

o/w Social Protection 10.04 10.34 0.30 3%

o/w Policy, Planning and support 17.70 25.20 7.50 42%

- KCCA 1.55 1.55 - 0% Local Govts 7.14 7.14 - 0%

o/w Community and Economic Devt 7.14 7.14 - 0%

Equal Opportunities Commission 1.75 1.75 - 0% Total 45.84 54.29 8.45 18%

Source: NBFP 2014/15- 2018/19

Social Development Sector Budget

© The sector budget allocation is projected to increase from Ushs 45.84 billion in FY 2013/14 to

Ushs 54.29 billion in FY 2014/15 including Donor

contribution and NTR,

© © The increment to the sector is due to the implementation

of the Youth Livelihood Programme (YLP) which has

caused changes in allocation of resources (funds) to a

number of outputs.