Uganda’s 2020/21 Budget is short of stimulus package

World Health Organization (WHO) has warned that COVID-19 is likely to stay with us for long. Therefore, for any country that is geared towards surviving this shock, must have practical stimulus packages which are swift to revamp and compensate the lost development and growth. Uganda had predicted growth of double digits according to Finance minister Matia Kasaija in 3-4 years. With COVID-19, the 6.0% growth of 2019/20 has been reduced to 5.2%.

Whereas government is focusing on import substitution as one of the magic bullets for stimulus package, the budget alignment falls short of this. As we were lockdown, parliament was in a rush to discuss 2020/2021 budget and pass it without factoring and readjusting it to COVID-19 effects. For instance, Uganda being land lock locked country with poor railway infrastructure, and having faced challenges of transporting its goods from the coast –Mombasa in Kenya to its inland, would swiftly prioritize to expeditiously embark on constructing the standard Gauge Railway to solve issues of high costs, and also control what has become disease importation through truck drivers.

Ugandan government has made supplementary budget a vice, an annoying vice which always comes in between February to June only 04 months to the end financial year. During lockdown, there was a buffet of supplementary budgets, from what was predicted (Ministry of Health) to unknown ministries. When IMF and World Bank announced that there was money for borrowing to deal with COVID -19 effects, almost every developing country rushed there. However, one would wonder, how do you borrow money to come and give out to MPs, to classified expenditure to the tune of UGX 400Bn and then, promise to inject UGX 1tn in recapitalization of Uganda development Bank (UDB) which has been identified as on the stimulus package channel to stir development, then give UGX 100BN to UDC!

One of the stimulus packages, that government has committed to do, is to pay domestic debts to the tune of UGX 400BN, which is by way the equivalent of what was given as classified supplementary budget. When government delays to pay local suppliers who largely depend on loans, it means, you are killing their businesses as banks rush to attach their collateral security. In fact research done showed that government was the greatest killer of its own businesses through delayed payment and unrealistic taxation.

Another big animal that should have waited as we sorted the COVID-19 mess was the creation of new districts and cities, while speaking at National Budget month pre-Budget Dialogue FY2020/21 dialogue meeting, the PS/ST Muhakanizi, stressed how he always does not understand parliament and cabinet continued creation of political administration without money to run them, in fact, he said over 45 districts have no money in 2020/21 budget. ‘The treasury which everyone is looking at is also in emergency before you make your demands’ the PS/ST also warned.

Government will be acquiring concessional loans from World Bank which will be paid in 40 years with no interest, this is a good move and what now waits is allocation of these loans and how the monster of corruption can be kept at bay for these monies to actualize the intended objective.

Uganda is dealing with three major challenges of; Locusts, floods and now COVID-19. There must be a holistic approach to deal with these issues. The East African community should be working together to solve these problems, but this seems not to be the case.

Local person would like to see strategies designed to help in rent issues for business places, acquired loans and how for instance, education sector will be handled.  Whereas, government insists that it has warned landlords not to evict tenants, this is informal and not backed by law. There is going to be increased violence between landlords and tenants, both commercial and residential. This is likely to affect the vulnerable groups already strained by floods, locusts and COVID-19, and mostly women and children. In fact it’s rare to watch news every day and not see couples killing each other.

Lastly, president Museveni has been instrumental in containing the three disasters of locusts, Floods and COVID-19, however, whereas the lockdown was meant to contain the quick spread and allow ministry of health prepare for this pandemic, it’s still shameful when these frontline heath workers start complaining of delayed payments, lack PPE and also health centers that are still in sorry state. This is the perfect time to focus on the revamping especially Health and Industries. Now that, medical tourism has been proved not to work in these risky times, how best can we sustain ‘our’ health systems, how much can our industries go and how much are we investing in them.

The writer is,

Sam Mucunguzi

National Coordinator

Citizens’ Concern Africa (CIOCA)

Leave a comment