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Why I no longer lose sleep over budget

Ramathan Ggoobi

Why I no longer lose sleep over budget

Uganda’s budget has become a meaningless document containing promises that will never be fulfilled!

At university where I teach Ugandan Economy, among other subjects in economics, we are at the moment marking students’ scripts for end of the 2012/13 academic year.

One of the questions I asked my third year students pursuing Bachelor of Commerce (BCOM) and those pursuing Bachelor of Entrepreneurship & Small Business Management (BESBM) was to precisely explain why during last fiscal year, 2011/12, Uganda’s GDP growth rate made the greatest stumble since the launch of the Economic Recovery Program (ERP) in 1987.

One candidate wrote, why should it grow yet whatever was supposed to be produced reduced?”

Although this was not the conventional answer to the question, and indeed I had not included it in my marking guide, I fought hard to resist the temptation of awarding some marks to this student for providing such a “signpost” solution.

When I shared this with a friend, she asked me more questions than helping me out of the quagmire. “Ram, can you identify for me just one aspect in this government that still works?” She asked. When I told her government provided her a job, she angrily replied, “And it can no longer pay me on time!” I thought quickly for another one: it still heeds constitutional practices such as preparation and presentation of the national budget for parliamentary approval. She promptly averred, “That is no longer our budget, it’s theirs! I would care less if Kayihura chose to swap a budget siege in the place of a media one!”

Budgets never implemented  

Mr President, on this day last year, I wrote in these very pages a piece warning that the national budget will lose meaning the moment Ugandans realised that it had become a meaningless document containing promises that will never be fulfilled.    

I told you last year that in the past the budget was one of the most sought after speeches of the year. People anxiously, and with great euphoria, waited for the budget speech because it literally meant everything for them. In those days, on the budget reading day, the country would stop. For about three hours people would remain still and clipped to their radios and television sets listening and watching one person — the minister of Finance — as he presented facts, figures and anecdotes that were going to guide their lives in the ensuing 12 months.    

This budget enthusiasm among people has died. It has waned mainly because people no longer see the promises that government put in the budget getting implemented. Last year I delineated 10 questions that people were asking about the budget, and I warned that if government failed to answer them in the financial year ending this month, it risked losing the confidence of the people and as such the budget process would lose meaning.  

First I asked: will government match budget allocation efficiency with implementation? People had started to get concerned that although budget allocation had improved significantly, these good budgets tended to remain on paper. I also asked: Who is going to implement the budget? I put it clearly that although our resource envelop had grown significantly from Shs. 5 billion in early 1990s to Shs. 6000 billion last year, leading to increased allocations of bugger budgets to key sectors such as roads and energy, education, and health, the bad news for Ugandans was that Madam Maria Kiwanuka was going to hand this money to the very people who for years had failed to account for the billions of shillings handed to them to deliver the goods and services budgeted for. Someone may think I am a seer because hardly months into the financial year, billions of shillings were indeed stolen in numerous scandals that rocked the country.

The third question I asked was: What has NAADs really done to improve agriculture productivity to warrant its fat budget? In the budget, NAADs received Shs. 133 billion to provide improved seeds and other planting materials to farmers across the country and also to set up agro-processing plants. When I asked how much has agriculture production increased courtesy of NAADs to justify those billions I was baptised a saboteur. I recently heard two uncoordinated statements from you, Mr President, one promising for the disbandment of NAADs and a recent one pledging to restructure it to concentrate on provision of farming materials! Reason? There is purely nothing to show for the Shs. 133 billion allocated to NAADs!

I also asked: When will NRM government put money in sectors on which our lives depend? I reported to you, Mr President, that the people of Uganda were asking why your government enjoys rhetoric and academic intervention instead of focusing on delivering the basic services to them. I wondered then, and still wondering: What does it take for government to purchase a Grader for each constituency in Uganda to pave the small roads in villages and enable people to transport their agricultural produce and other marketable products to the main roads and to markets? Why does government enjoy making service provision a very complicated job?

I further asked: Why does government recycle roads in budgets? I gave the example of the road to my village in Butambala which has been in every single budget for the last 7 years and it is still unpaved! Other “legendary” roads were Matugga – Semuto – Kapeka; and Kabale – Kisoro – Bunagana/Kyanika.

Spending on consumption, not investment

Well, those are some of the questions I asked last year. Whoever doubted them then may look at them again and perhaps understand why my student could be right to throw away conventional answers to my exam questions and in their place write what he feels is the correct version of Ugandan economy under NRM government.              

I also went around in the search for the reason why my colleague feels the national budget is no longer “our” budget but “theirs”. That reason I found it in the Semi-Annual Budget Performance report published by Ministry of Finance in March this year. The report provides an analysis of the budget execution half way the financial year. It is indicated in the report that although nearly a half of the approved budget had been released by ministry of finance by December 2012, and about 46% of the money spent registering an absorption capacity of over 90%, most of the money had been spent on consumption and other unproductive activities of government. Less than a half of the money had been spent on investment.

In the report, for example, it is indicated that out of the approved budget of Shs. 379 billion for agriculture, only about Shs. 171 billion (45%) had been released and just about Shs. 127 billion had been spent. So despite the low releases, utilisation of funds in agriculture sector was also very low. Yet farmers are out there crying of inadequate seed, fertilizer, machinery and other inputs.

Secondly, as the country continues to grapple with low electricity supply, the energy sector that was allocated Shs. 1 trillion to generate more electricity, had only spent Shs. 83 billion (8%) of the total budget. The same happened in the roads subsector where only 467 billion (36%) had been spent out of the total allocation of Shs. 1.2 trillion. No wonder we continue to suffer with potholes.

Where is the money being spent religiously? Security (97%); public sector management (i.e. Office of Prime Minister, Public Service, Local Governments etc.) where 88% of the released funds had been spent; public administration (i.e. State House, Office of the President, Electoral Commission, and Ministry of Foreign Affairs) where 85% of the released money was spent. These are also the departments of government that took a lion-share of the infamous supplementary budget. Security, for example, took 280% in supplementary funds over and above its approved budget, while public administration (State House) took 65% over its budget.

So will that in my small head, why should I continue to lose sleep over the budget? Of what essence is this speech or statement in my life? If money is being spent in offices where individuals pick billions and build hotels for homes, charter planes to go for holiday or just a weekend out of the country, why should I be the one to applaud? I will return to TV to watch the budget speech when I get the accountability report for last preceding year’s expenditures!

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Ramathan Ggoobi

Ramathan Ggoobi is Policy Analyst, and Researcher. He lecturers economics at Makerere University Business School (MUBS) and has co-authored several studies on Uganda's economy. For the past ten years, he has published a weekly column 'Are You Listening Mr. President' in The Sunrise Newspaper, Uganda's Leading Weekly

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