• KRC ANALYSIS OF THE 2020/2021 NATIONAL BUDGET

Unveiling the losers and the winners in the 2020/2021 national budget.

By Mugerwa Fred

Discussants and KRC staff during the zoom debate on the 2020/2021 National Budget

Discussants and KRC staff during the zoom debate on the 2020/2021 National Budget

 

Following the reading of the national budget 2020/2021 on 11th June 2020 by the Hon. Minister of Finance, planning and Economic Development in Kampala last week, under the theme Stimulating the economy to safeguard livelihoods, jobs, business and industrial recovery, Kabarole Research and Resource Centre (KRC) conducted a civic awareness public debate through the zoom technology to raise awareness and stimulate reflection. The overall objective of the debate was to simplify and interpret the national budget and its implications on the livelihoods of Ugandans. Specifically the debate was able to examine the extent to which the allocations in the 2020/2021 budget address the current and future socio-economic needs of common citizens in Uganda.

 

In this debate, ably discussed and shared their views regarding the budget. This made it possible to identify the level to which the budget services interests of leaders more than the priority interests of the electorates. The sector with huge allocations in the budget could hardly get in limed with people priorities. Yet leaders ought to consult the citizens regarding planning and budgeting priorities.

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In unleashing the winners and losers of the 45.5 trillion budget, the allocation to sectors show that majority citizens’ priority sectors of agriculture (3.1), health (6) and education which are more essential to the needs and challenges of majority Ugandans. These sectors however are not in the priority sectors allocated with significant public financing.

Imperative to note, there other under-scored sector is the social development sector which is allocated 0.6% yet the sector is meant to facilitate and enhance capacities of the youths and women into socio-economic developments and to support the elderly people to access livelihoods. The allocation undermines the importance and magnitude of the special interest groups in national development inspect the growing youth unemployment and vulnerability of the youth and women in the country that is likely to expose them to harmful risks. The 0.5 % of allocation to ICT & the science, technology and innovation sectors is a contraposition to the role the sectors play toward a real economy. The sectors are key in the youth employment and revenue collection in the country.

Whereas, the ‘lions’ share is allotted to the sectors of works and transport, security, justice, law and order, it is no doubt that there is realization of the political agenda. The allocation of more funds to security sector amidst no war is meant facilitate status quo interests of the regime. By the fact that even the allocation to the local government sector has only 23.3% for development expenditure, common citizens in rural and farming communities are likely to have their expectations not achieved in 2020/2021 budget.

The political wing and structure have all their expectations likely to be met within the budget. The state organs and infrastructure for the regime are the key advantaged players in the national budget and allocations. Whereas, the president has expressed interest in seeing a real economy in Uganda with verbal talks about growth in the ICT, science, innovations and technologies, modernization of agriculture and the middle income economy for all Ugandans, this does not come true by the nature of this budget as a tool for achieving political commitment. There is limited commitment to liberate majority rural communities, women and youth. The budget therefore imply that people have to continue struggling to liberate themselves with less dependence on the government. They must however, in their effort to change their own lives and determine their future, citizens must hold government accountable. Demanding essential services is not a favor but an obligation of the state. This point of dialogue takes root from right holders knowing their rights and therefore using available spaces to engage and hold duty bearers accountable. 

The Local government sector allocation in the financial year 2020/2021 budget show that there is little in the budget to execute development business across the different administrative units in the country.

Local government sector allocation 2020/2021
Break down Amount %age
Total allocations, (Bns of UGX) 4,172.55 100.00
Recurrent 2838.00 68.02
Pensions 361.96 8.67
Development expenditure 972.60 23.31

 

Local government sector allocation 2020/2021 equally demonstrate limited percentage proportion meant for development expenditure of 23.3 %. With 76.3 (3,200.billion shillings) of 4,172.55 billion shillings allocated to the sector. 

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The country’s effort to effecting service delivery and achieving sustainable development goals in a decentralized set up is challenged by the high number of administrative units in the country. The last two decades in Uganda have been characterized by rapid ‘socio-administrative divides’ and districtilization process since 1990.  Districts have been created in the last three decades adding up to a tune of 134 districts from 45 in 1990 (https://www.independent.co.ug/evolution-ugandas-districts/ accessed 18th/6/2020) the creation of more districts is of budgetary stress to the nation.

The numerous districts and administrative units are not only costly to the government but also ineffective in achieving national development aspirations and sustainable development goals. The limited 23.3% of the 4,172.55 billion shillings local government budget is not sufficient to improve the lives of majority Ugandans stagnated in poverty (SDG1, 8 &10). It’s noted that amidst this, many Ugandans missed a feel or attestation of the Millennium Development Goals (MDG) by 2015. Whereas, globally economies are allocating resources to achieve regional and international agenda for development such as and the Abuja declaration on 15% allocation on health sector SDG3; and 10 % Maputo declaration on agriculture SDG 1 and 2; the right to education and Education for all is challenged by the limited budget allocation from the budget, the current covid19 regime and the overall infrastructure deficit especially in rural Uganda. Where the shift from analog to digital has be disrupted by harsh economic conditions, lack of electricity connections and dilapidated education environment UBOS (2017) reported that only 5.2 % and 17.4 % Ugandan households own radios and TVs respectively. Yet 90 % and 82% of students out of the class have access to computers and internet respectively. With the current education sector infrastructure amidst covid19 the realization of SDG 4 is a challenge. Homes are schools, capacities of homes to foster learning is likely to take long if the potential in agriculture the engine of rural economic growth is not given priority deserved to improve rural communities. The budget as policy tool for national commitments and transformation does not intend to address the growing inequality gap especially on the challenges on of the rural poor.  The rural poor including children struggling to attain basic education amidst most challenges, women struggling to work hard in an informal sector and communities produce agricultural produce fetching low prices.   

There is a likelihood of majority poor Uganda especially those in rural areas falling ply of the political leaders’ interests and manipulation as during the election process. The implied indifference in the transfer of financial resources and national budget to facilitate the interests of the decision makers of the nation is likely to curtail the power of the citizens’ vote. The commercialization of politics and elections in Uganda is one thing to blame for the gap between citizens priorities and the priority sector allocations in the national budget 2020/2021.  Besides budget monitoring practice which needs to be taken up by interested citizens and CSOs, accountability seeking must be a new culture.  

The question remains; who is the custodian of public expenditure? Is it the citizens or the leaders? The role of leaders and representatives in budgeting process seemed unanswered. And therefore how can public expenditure be best aligned to meet the priorities of the citizens. Are the leaders effective in presenting citizens priorities into budgeting process and national development? The answer to these question explains why poverty and inequality have remained in spite the progressive increment in national budgets for the last couple of years in Uganda. If the budget fails to fairly promote the citizens interest, then there is unfair transaction between the citizens and the leadership. Citizens have to bargain for inclusiveness of their priorities in the national budget. The notion of debt burden and utilization of public debts on priorities that hardly help tax payer recover from poverty is an emerging fear to citizens. Followed by escalating corruption vice in the public sector, people wondered whether the read budget would actually translate into reality. Therefore government has a lot to do in fighting corruption and ensuring accountability and value for money. The fight has be beyond ‘ridiculous walks’ to fundamental and deliberate actions against the vice. Citizens are pessimistic on borrowing from foreign sources. The government needs to strengthen local capital accumulation and economic investment by the citizens to allow for ‘domestic borrowing as a path to economic independence’ in Uganda.

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Kabarole Research & Resource Centre

Plot 28 Mugurusi Rd., Fort-Portal.
P.O.Box 782
Kampala Uganda
Telephone: +256-039-374-438
Email: krcuganda@krcug.org