Government through the Ministry of Finance has released Shs 4.3 trillion for the expenditure for Ministries, Departments and Agancies in the first quarter of the 2018/19 financial year.
This was announced on Thursday by the Permanent Secretary of the Finance Ministry, also Secretary to the Treasury, Keith Muhakanizi at a news conference in Kampala.
The released funds make up 26.8% of the recently approved Shs 32 trillion annual budget, excluding external financing, appropriation in aid, debt and the ongoing projects of Karuma and Isimba.
Muhakanizi said that out of the Shs 4.3 trillion, a sum of Shs 557.8 billion will go towards payment of wages and salaries while Shs 80.5 billion will cater for pensions and gratuity payments.
In order to reduce on the domestic arrears, the Ministry of Finance has released Shs 145 billion. According to Muhakanizi, priority is to be given to rent and utility payments since government intends to clear pension and gratuity arrears in October this year.
“All outstanding arrears must be cleared before new suppliers are paid against the relevant item, and monthly reports must be provided to the Ministry of Finance with a copy to the Office of the Prime Minister on the status of clearing domestic arrears,” Muhakanizi said.
A total of Shs 196 billion has been released to the Ministry of Works to cater for the deposit on the national carrier and expenses of the Kalangala Infrastructure Services. Approximately 25% (Shs 401 billion) of the approved budget has bee given to UNRA for road development.
The Education sector got Shs 97 billion for capitation requirements for Term 3 while NAADs was provided with Shs 89 billion to purchase planting materials on time for the coming season. Uganda Coffee Development Authority got Shs 45.6 billion.
National Medical Stores received 25% of their approved budget to meet obligations for purchase of drugs.
Local governments have been given a total of Shs 839 billion for this Quarter, the biggest chunk (Shs 503 billion) of which is to pay for wages, Shs 149 billion for development, Shs 138 billion for non wage, Shs 27.4 billion for pension and Shs 21 billion for gratuity. The total release to local governments represents 33% of the approved budget.
While speaking to the press, Muhakanizi cautioned Accounting Officers to ensure that arrears especially those for service providers are settled. He revealed that beginning with this financial year, Accounting Officers will be obliged to seek approval from himself or the Accountant General before cancellation of Local Purchase Orders (LPOs) with clear justification.
“It has been noted that Accounting Officers are accumulating arrears through cancellation of LPOs and issuing new ones for other activities,” said Muhakanizi.
He said that this leads to non-payment of service providers and crowding them out of business.
“With effect from this financial year, the Accountant General will grant the authority to approve and cancel LPOs. Any Accounting Officer who wishes to have any LPO cancelled will first seek approval from the Accountant General or myself with justifiable reason,” he added.
Meanwhile, Muhakanizi has said that funds for Uganda’s embassies abroad will be released twice in a financial year. This he said will guard against loss of poundage and to enable these embassies to meet obligations that require one-off payment such as rent.
Commenting on behalf of the civil society, Julius Mukunda, the Executive Director of Civil Society Budget Advocacy Group (CSBAG) welcomed the reforms such as that regarding Uganda’s foreign Missions as well as universities. He said this would ensure timely financing.
He however called for a national dialogue on budget financing especially given the currently contentious debate on taxes placed on Mobile Money and social media. Mukunda blames the challenges in Uganda’s budget financing model to politicians who have taken up technical process and the failure to include citizens in this process.
